SPIF Tip #1: Are Salespeople Coin Operated?
One client’s salespeople had worked hard to map their deal flow. Their new process improved a bottleneck in customer service.
Customers were happier. Salespeople could spend more time selling. They prioritized deal flow. Forecasts became more accurate. They could spend time on new accounts. Their pipeline started to increase.
They knew their teamwork improved their success.
Then, the Director of Human Resources flew in from corporate. HR wanted to “do their part” to improve revenues. Corporate had recently approved an “improved” sales compensation plan.
The new plan featured commissions that increased as each salesperson’s volume increased. It eliminated caps on compensation.
Of course, there was a price to pay for this increased earning potential in the future. It reduced base salaries today.
She explained part of her research for this plan. “As everybody knows, salespeople are coin operated,” she said. She made glowing statements about the money to be made when salespeople “knocked the ball out of the park.”
The new plan put some members of the team in jeopardy. They could make less money this year (even this month). They had to change priorities. They needed to find something – anything – they could close now.
Obviously, corporate wanted more revenue for itself. It wanted to disguise this fact by appearing to do something for salespeople. It was unconnected to any consideration of what would create value for customers. This doomed it to failure.
Now, it was every salesperson for themselves. “Team” meetings were no longer a priority, because they focused on the future. The urgency was today, not the future.
The result? “Taxi cab” mode. Any order was a good order. Improvement stopped. Forecasts started getting erratic again. Discounting started to increase again. Frustration increased (again). People stopped helping each other.
Just consider some of the bad assumptions rolled into this:
- Salespeople have control over how much revenue comes in.
- Productivity is inherently about salespeople as individuals.
- Salespeople aren’t working hard enough.
- Paying them more money will get them to work harder.
- Salespeople should not worry about helping each other.
This happened at a company famous for its lean culture in operations.
I could go on. It reminds me of a great quote:
“Your assumptions are your windows on the world. Scrub them off every once in awhile, or the light won’t come in.”
Sales and marketing is full of assumptions that prevent the light from coming in. They cost money, ruin careers, and frustrate customers.
Have you seen this sort of thing happen too?