How do I motivate salespeople if I’m on a small budget?
Monday, October 8, 2012/
What are the best ways to motivate salespeople? I don’t have a huge budget but would like to reward my small team.
Okay, this is a big question and it really depends on the type of sales you are referring to.
Incentives vary greatly depending on how much work the salesperson has to do to make a sale and fulfil the order.
For example, if you are looking to incentivize retail sales staff or cold calling staff, there are two different salespeople and skill sets involved here.
One has the clients walking in and the other has to generate their own leads.
Let’s look at a spectrum here.
Retail salespeople do not have to work hard to deliver leads (new clients) as they typically walk in. What they can affect are two areas of business.
Firstly, the conversion rate or, simply measured, the number of sales based on the pairs of feet that walked into the store that day.
Their individual sales skills, customer service skills and attentiveness to the sales process will have a dramatic affect on their ability to convert prospects to paying customers.
Secondly, they can have a massive impact on the average dollar sale value. What I mean here is the old “Would you like fries with that?” question.
Every business I have ever worked with has this question lying dormant in their sales process. If either of these two metrics is measured they can be rewarded.
Now, on the other end of the scale, we have a commission-only rep that eats what they kill. In other words, they do not get paid until they sell.
You find this in real estate and photocopy sales teams, for example: Low risk for the owner and, usually, high reward for the commission agent.
So somewhere in between is usually where the challenges lie from a business owner’s perspective. My favourite remuneration plan sees a base salary and a commission split.
There are 100 ways to reward salespeople and when I do so I use the following method. Firstly, I like to think that the sales rep should deliver three to four times their salary in revenues as a benchmark.
So if they are on a $60,000 package they should deliver from $180,000 to $240,000 in revenues. So let’s pick a target of $200,000. I will start any commissions at 80% of achievement of target and go from there.
All in all a complex subject for small business owners to tackle. Trial and error might cost you if you get it wrong in terms of high staff costs and it is really difficult to reverse this.
Asking other business owners what they do might be another way to start.
Whichever way you go, study (search Google), ask questions, speak with the team and armed with that you will be in a better place to work out what works for you and your team.
Remember, for some it’s not about the money, it may well be time off with family and friends as an incentive!
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