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The Sales Shrink – Doesn’t Quality of Business Matter to Anyone?

by Tina Cherpes, Featured Contributor

Behavior Therapy – #21

DURING THE COURSE of Jackie’s 30 minute diatribe, her rage centered mostly around her disappointment in the behavior of her sales reps. “All they care about is volume. I don’t get it, doesn’t profitability or margin or quality of business matter to anyone?”

sales shrinkWhen we examine behavior in the sales arena, there are at least two fundamental perspectives that will serve us well to acknowledge; the salesperson’s and the sales manager’s. As a salesperson and with little regard for what we’re asked to do or told to do, we will do what we are paid to do. And as a sales manager, if we don’t like what our salespeople are doing, we must change what the salespeople are paid to do.

Predictably, when asked what primary metric drove her team’s compensation plan, Jackie answered volume. In the sales industry (perhaps more so than any other) compensation drives behavior; if Jackie’s salespeople are rewarded (aka paid) to generate volume, that’s precisely what they’ll do. They’ll figure out the math needed to maximize the plan and model their behavior accordingly.

The sales compensation plan is the most effective way for us to direct the behavior of our sales force and no single element has a greater impact on behavior than compensation. A poorly designed compensation plan will allow salespeople to ignore management priorities without incurring any financial consequence. Conversely, a plan properly aligned with our strategic goals can be a powerful motivation for salespeople themselves to perform, improve, or opt-out of our organizations.

The key is to make sure we know what behaviors are desired so we can make sure our compensation plan supports those behaviors. If as an example we determine volume and retention are essential to our ability to reach our strategic goals, we’ll want to work to align our compensation plan to help drive behavior in that direction.

Remember, as salespeople we will do what we’re paid to do, not what we’re asked or told to do and as sales managers, if we’re unhappy with what our salespeople are doing, we need to change what the salespeople are paid to do.


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