This is the last in the series of four blogs on sales compensation; the hybrid or combination model. As a quick review we covered:

• Aligning your selected compensation plan with management's goals and the sales professional's day to day activities.
• Ensuring reinforcement comes as close to the desired sales behavior as possible.
• The strengths and weaknesses of the 100% base and 100% commission models.

Previously we covered frustration with sales compensation and the constant search for the perfect program.The last blog reviewed 100% base pay as an ineffective model to motivate sales professionals.

Now let's examine 100% commission, as the perceived end all for the "real" sales professional, basically this model is an urban myth!

One of my favorite talk shows is William Shatner's , Raw Nerve. The other day I was watching him interview Gene Simmons of KISS fame. I didn't realize the meager background Gene came from, much less some of his philosophical underpinnings.

Two things struck me about the interview.

Our first blog covered the all too frequent dissatisfaction employers, managers and sales people have with their compensation. This  generally results in a holy grail search for the perfect compensation plan to motivate sales professionals, yet not break the bank.

The three basic compensation plan are:

1. Base Pay
2. 100% Commission
3. Hybrid (combination of both)

After spending  25 years in corporate America there was one thing I found as predictable as death and taxes; dissatisfaction with sales compensation plans.

Inevitably, senior management was worried that some sales professionals or teams were getting a wind fall, or the system wasn't motivating the sales people to perform as desired.

There is a great commercial for Travelers Insurance with the cute dog worrying about the safety of his precious bone, ala investment, which is keeping him up at night with the background song of Trouble by Ray La Montagne.

 

 

Recently, I was returning on a flight from Denver to Phoenix  and I struck up a conversation with a retired Komatsu (heavy equipment company) engineer. He managed the production system for years prior to his retirement.

We talked about the methodical process Komatsu went through to ensure all components of their equipment worked the way they were designed.

He asked me what I did, and I responded that we teach sales professionals to understand and use established best practiced sales processes just like he did for Kamatsu's production process. 

He gave me a very quizzical look followed by a rye smile. He then said, "Dave just like there is 'no crying in baseball', there is no process in sales!" He followed with, "you can't equate the science in setting up a sophisticated manufacturing process with the cavalier nature of sales." 

I was on a radio talk show recently and the interviewer asked me, “What do you view as the number one sales skill employers are looking for in a professional sales person?”

This is a common question that comes up quite often in our sales training and conversations with business owners. The answer is not organizational skills, charisma, the ability to persuade, presentation skills, tenacity, aggressiveness, affability, analytical ability, etc.

 

The most sought after skill is the ability to listen effectively. Followed by the skill to ask great questions, and establishing and maintaining positive working relationships. 

 

People learn how to listen. It is not an inherent characteristic at birth. Although it is critical to advancing meaningful conversations in social much less business situations, there are very few training experiences that focus exclusively on this vital sales skill.

...

At a recent sales seminar I was asked by a sales manager,  "which sales people statistically should I spend the most time coaching and managing?"

I responded by asking, "where are you currently spending the majority of your time?" His response, "with his the problem performers."

Unfortunately this is frequently the case. Sales managers spend their precious coaching and management time with the poor performers in hopes they will somehow become "winning horses".

Let's take a step back, statistically 20% to 30% of a given sales team members generate 50% to 80% of the sales. They generally fall into three categories:

1. High Performers ~ The Horses

2.  The Hope Fulls ~ potentially moving up

3.  Problem Performers ~ resource drain

The following advice may seem stark and in some sense cruel. But bottom line a sales manager's job is to help the team sell  more.

...

I was consulting with a client helping them create their strategic sales plan.  The concept and notion of 'the customer is always right' was brought up as a stop gap between sales and operations.

The management team stated that repeatedly the sales team seemed to drop this "bomb" on the entire enterprise causing internal strife and sub-optimizing profits.

The client sighted the typical mantra from Sales:

if we don't do it now someone else will the customers pay the bills don't blame me if we lose the business ok you tell the boss we can't do it etc., etc.  A book could be written on the ever present tactic sales professionals use and customer's consciously or unconsciously reinforce to get what they want.

The problem is played out in two lethal insidious ways.

Internal tension and mistrust is created between sales and the rest of the organization...