Five Ways Keep Your Best Salespeople in Challenging Times
While the economy is projected to continue to grow, the sales environment has not gotten easier. Organizations are reducing the “feet-on-the-street” and shifting small and medium accounts to inside sales and customer procurement departments. They are pushing as many sales opportunities as possible toward RFPs to remove the relationship value and focus transactions solely on price.
In this environment, it is critical that sales compensation is reviewed to ensure that it is aligned to the goals and sales strategies of the business and so that the stability of the sales organization is not overlooked. A good approach is to look forward to the desired state of the company and how sales compensation should be used to achieve the future required results.
Planning for the future is critical, but contingency is also an essential requirement. What happens when the company encounters financial problems? What if that merger falls through? What if the next round of investment comes to nothing? What if your competitor launches a new product which is going to put you behind by a few months? What if a recession hits?! Uncertainty must also be accounted for in your planning.
Let's consider some of the big factors you can forecast so that you have the tools to retain and develop your best salespeople even in times of crisis. Here are five things to plan for to ensure you keep your best salespeople in both the good and tough times.
1. Retention
Maintaining a stable sales team which is motivated and focused on goals is critical to any business. So, do what you can to make retaining your top sales pros a priority.
Communicating clear expectations of expected results, therefore, should be the immediate imperative and the primary measure of effective sales management.
Your best salespeople are an asset and, ultimately, will be integral to growing revenues again. Be sure to let them know that, despite current difficulties, their future is secure and part of the plan. Like all other assets of importance, it is critical to identify them “before” any crisis hits so that you can offer them timely reassurance when required. This will lessen the chance that they will leave in tougher times. Make sure that you know what you can and cannot offer them so that everyone is clear on what will happen.
2. Salary
The income levels of sales pros, while perhaps lower than during good times, must still permit them to live reasonably and meet their obligations without needing to resort to inappropriate sales behaviors or pushing leads to purchase just to achieve financial rewards. Rather than increasing base salary in difficult times (which also impacts benefits etc.) look to find the short-term solution that will enable you to maintain their cash flow, but not paint you and the company into a corner. Consider such things as perhaps a non-recoverable draw, MBO’s/strategic initiatives that will pay out for delivery of the activity (and hopefully position the company for future sales) and finally
Your best salespeople will ultimately get you out of the jam so be sure to minimize their financial risks so they don’t become alienated and leave. They are hard resources to replace and their loss will make it more difficult to recover.
3. Variable Compensation
The premise behind sales compensation is that incentives provide the impetus to initiate and reinforce certain desired sales behaviors and drive improved sales results.
In our rush to cut costs and “right size” the organization, and achieve financial stability we are open to over-looking the importance of a strong sales compensation program. The plans need to be aligned to specific sales roles with payouts linked to performance and targets that are realistic and achievable.
The best sales compensation plans are dynamic and agile. Standing by targets that are unachievable will demotivate your sales teams and create churn.
Bad target setting can cause you to lose your good salespeople and to be left with the average performers. Targets should be set to maintain at least a reasonable opportunity for sales success.
4. Recognition
Good salespeople can always find a new job, even in a tough market. The best Managers maintain close communication with their salespeople and recognize effort - even when times get hard and pools of customer prospects dry up. Standing by those sales team members who put forth consistent effort and have previously shown, or have the potential to deliver success breeds loyalty, and longer-term stability.
Recognition for performing the “right” tactical activities, for example, can mean sales with better margins and longer-term perspectives on creating a sustained competitive advantage.
5. Customer Relationships
Often, suppliers that stand by their customers and go that extra kilometer to ensure that the customer gets what they need and have terms they can live with are the vendors who'll increase their share of market share when times improve.
Retaining customers, that you still have during a difficult financial period can make or break a business. Treating your existing customers well and making sure that they have the best pricing in both good and bad times, demonstrates why you're still the right partner.
This approach is more likely to have a recurring revenue safety net in tougher times. Keeping competitive pricing during tougher financial times can also pay large dividends, especially with loyal, long-term patrons. An example could include items such as finding cheaper routing for freight to save the customer money. Also, if you provide your design and materials expertise to a valuable manufacturing customer included in your costs you can reduce their product development overhead. Good relations also can alleviate the RFP requirement or make the RFP directed toward you as the favorite vendor, with the right conditions.
These are things that help to create a stable sales environment and make riding out the up and down waves of sales more successful.