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Motivation that kills your sales
1. MOTIVATION THAT KILLS YOUR SALES
A few days ago I had talked with HR of one of Ukrainian producer. The
company is exporting their products to EU.
Now they are looking for export managers and offer fixed salary plus 2%
from the personal sales.
During my career I've created a couple dozens of different motivation systems
for sales departments and up to my opinion if you give definite per cent from
sales - you are in the "beginning of the end".
Here I will try to explain my opinion.
Each person has its private "comfort zone". Let's image that manager in the
company catch a few "fat" clients and start receive steady and not small
amount of money as bonuses.
Looks great at first sight!!!
The company earns money from that "fat" clients, manager receives good
bonuses....But.... What will make the manager to look for and develope new
clients? Bigger ammount of bonuses?.... He feels comfortable now and to earn
more money he or she has to make additional efforts such as - looking for new
partners, negotiating, discussing, "fighting" and so on.
By my experience 2 of 10 managers will be ready to leave their "comfort zone"
to reach the new and better level.
2. But in this case the company will stop developing, they won't receive the
dynamic of sales and one day these "fat" clients can kill the company. What
will happen if , for example, one of that clients will stop bying because of any
reason (crisis, new and better supplier or whatever) ? You will loose big
amount of profit and won't be able to fullfill this hole in the budget
immediately.
You sholdn't also forget that the manager is not the business owner and even
is not the commercial or sales director, and he wouldn't think about the future
of company as you will, he is usually thinking about his (her) profits. If the
company hasve problems - the manager will probably leave and go to other
company.
In this case I would offer to create 2 branches of sales department - "active
sales" and "back office sales". The "active sales" department have to look for
new clients, start business with them , and after the client is loyal to company
- shouldbe removed to "back office" sales branch, whcih will have to support
relations with the customer, and continue cooperate with it.
After removing tto "back office" the bonuse from this client moves from active
manager to back office manager bit by bit and in the final shouldbe, as for
example, - 30% for active manager, 70% - to back office manager.
Of course there are a lot of variants of the structure of sales and motivating
systems.