Across our industry there is often an underlying understanding with dealer principals that the salary they provide to attract sales talent is only bait used to catch the next sales rep. It’s an attraction and comes without clear expectations or authority to define any of the daily sales activity requirements for those you hire.
With each engagement, I see lower expectations and less structure around what is expected of the sales team. I rarely discover anyone being held accountable for anything and that includes the sales leadership. I am amazed at the number of sales reps who are allowed to wander through their month without accountability and if a new hire comes from the industry, there’s often an unspoken defiance just under the surface that says “if you push too hard, I’ll leave” and so, no one pushes. In this case the salary was the hook and the dealer is hoping that the rep brings their renewals and relationships. But remember, giving a salary should have rewards for your side as well. Hooking a sales rep from the industry who may bring their portfolio could have a disastrous effect on other quality sales reps, so be careful about how you use your salary and who it attracts.
Often this is the situation I’m asked to jump into. Dealers don’t always like my answer when I tell them to get rid of the bad apples, or at least the apples that are going bad so we can build a salary and comp plan that will attract quality and build momentum. So what do you expect for your salary? Make it clear!
There are a lot of reasons why this situation exists. It’s not uncommon to find that the dealer hasn’t put any definition into his or her job offer, its expectations or included a fair wage for it. A salary and compensation plan shouldn’t be just a document you copied from an industry workshop. It’s a unique set of benefits and requirements custom to your company. It defines your desires and demands as well as the rewards, WITH CLARITY! I’m working with several companies right now who have a mismatch of salaries and no sales rep is paid like another. How do you manage that? I’m told, “Well Bobby didn’t demand as much as Johnny so we just don’t rock the boat.” That’s great until Bobby finds out he’s been working for years way below other reps and quits! Right!
Most likely this type of job isn’t really one that is irreplaceable and so mediocrity attracts mediocrity. If your job and salary is superior to the competition, few would want to lose it and the cream of the crop out in the marketplace will fight to have it! Manage them well and you’ll have a team that will take direction and will want to perform because they have a lot to lose and MOST IMPORTANTLY they’ll want to stay forever. Isn’t that one of your goals?
It amazes me that many dealer principals expect high turnover! Continually FUNDING and WASTING dollars when creating a lower salary program is ALWAYS a more expensive way to go. I most recently evaluated a sales program where the dealer had spent $326,000 in a single year on “come and gone” sales reps and managers. And yet, he continually talked about the guy he would have loved to hire but couldn’t afford! Are you getting the picture? Could he have hired two or three extremely high quality sales professionals for that amount of money? The answer is yes!
I’m not saying run back to the office and hire three excellent sales reps at $100k each, nor am I saying to overpay your sales team. What I am saying is, if you want quality, loyalty and to create a career for someone vs. just a job, you’ll have to build it. The sales generated by those come and gone reps will always be less than the sales generated by true professionals. When I review their sales results, if there were any sales at all, they were either rolling leases from their previous employer or they were deals that you gave them to help prime their funnel; either way, it could be wasted time, money and effort.
Let’s do some simple math and look at a smaller sales team for my example. If you have six sales reps and two of the six are successful, that leaves four sales reps who are not. I know, I know, you want to nurture those failing reps to success. Most dealers who say that have absolutely no sales improvement plan, skillset or capabilities, so you might as well scream, “I like wasting money,” and then I will understand.
This 80/20 problem exists everywhere; it’s not just your company and in order to fix this situation, we have to define the problem clearly. So here it is: you have four reps who are failing, who each make $3,000.00 per month. These four sales reps are nowhere near quota, consistently. So 4 x $3,000.00 equals $12,000.00 per month, and for those salaries you get nothing in return. Let’s also mention that those territories are not covered well at all. Am I getting this right? So stop wasting money and fix it! The number one question I’m asked is, “How in the world do you find great sales talent?” And my number one answer is, “Show me your salary and compensation plan and how many failing sales reps do you have?”
Wouldn’t it be a smarter use of money to release the failing sales reps, create an excellent job description, salary and compensation plan and take the $12,000.00 per month ($144,000.00 per year) and hire two professionals and an appointment setter? With the salary as the attraction you can demand a higher skilled professional, which gets you out of the nurturing business and provides you on day one someone who can close a sale. Now train them on your value proposition, products and services and hold them accountable for higher levels of sales prospecting activity. The amazing thing is, your company isn’t spending any more money than it was before and you now have reps who can carry the responsibility successfully.
I have folks all the time tell me, “We did that and it still didn’t work,” and then I find out that their sales leader (often the dealer principal) did not deliver the necessary sales activity requirements or hold anyone accountable. The sales team has to be managed, daily.
I don’t have every answer, but I do know that if I am evaluating and attracting sales talent I want to be reviewing candidates from the top of the pool vs. the bottom-feeders. At times I help a dealer engage a sales recruiter and I’ll get a call from that recruiter telling me, “The talent the dealer is seeking doesn’t work for 35k per year!” So, you have to live on planet earth!
Let me chase a rabbit for a second and share this warning. In 2014 I’ve observed two different dealers in different marketplaces hire competitive sales reps who both negotiated an enormous salary by offering their market connections and lease portfolio. Both dealers were on Cloud 9 and proud as punch to secure these reps. You’re wishing you were them right now aren’t you? When I asked them, “Was it the right move?” they looked at me as if I were crazy. When we reviewed the bottom-line and reviewed all of the inbound and outbound dollars associated with these two reps, these companies were significantly in the hole. Too much salary and most of the leases were renewed way too early so they had a lot of buyout and very little profit. Of course the reps wanted commission too! The bad news is, as soon as the lease renewals ran out, so did the reps—they both left. What do you expect for your salary? Your salary is a tool and when it’s a well-defined part of your plan, it ensures that both sides benefit.
Have you ever had to clear a field and remove the trees? You can go get your shovel and pickaxe and dig for a week on a single tree without success or you can call a company with a bulldozer and in 15 seconds they push the tree over and drag it away.
Some will continue to dig for six months and tell me that they removed the trees and were successful. If you can only afford a shovel and pickaxe, so be it. But if you can afford a bulldozer and wasted the six months digging with four shovels and a pickaxe, then you blew it. You’ll never get that time back and the chance to build momentum within your company and marketplace is gone. Who knows, maybe you will even lose a customer or two while you’re digging. If you need a bulldozer, hire a bulldozer.
What you expect for your salary has to be crystal clear and presented UPFRONT at the time of hiring. A salary, regardless of the job to be done, has got to match earnings for effort. It has to be fair, but it’s not a gift—it comes with expectations!
