You've spent considerable time and energy to develop and launch your sales program. Your team is trained and ready to get out there and crush your sales goals. But unless you also implement an effective recognition plan, most of your team will likely lose interest and stop practicing the great sales habits you've worked so hard to implement. That's why it's so important to introduce a structured recognition plan at the same time that you launch your sales program. Committing to a meaningful recognition and reward plan for your sales team contributes directly to your program's long-term success.
In his Inc. magazine article, Christopher Cabrera outlines 6 Reasons Why Sales Commissions Do Work:
1. Motivating people differently drives results. While it's true that different people are motivated in different ways, most people appreciate the motivation that a solid commission program will bring to their paycheck. Cabrera shares this example:
For a moment, think of your organization as if it were a seafood restaurant, and your sales people the fisherman. No matter the ambiance, the service or the style--if there are no fish being brought into the restaurant, you're going to be out of business pretty fast. The same is true when it comes to most businesses and sales.
That's where commissions come in. According to Ventana Research, "Every organization needs a well-developed compensation strategy that utilizes incentives and rewards to motivate sales talent as fully as possible." Well-aligned compensation plans keep hungry salespeople focused on the prize at hand. There is a clear end goal and they will keep fishing day after day to get there.
Paying your sales team a fair commission for effectively selling your most premium products is not only smart but it is essential to the survival of your sales program. But for a commission program to be most effective, the payout must be timely. Programs that pay commissions on a quarterly or even monthly basis are far less effective than those that follow the standard payroll cycle.
2. Misaligned goals--not commissions--create silos. When developing your sales program, it is essential that your daily admission and membership teams are aligned in purpose. Simply giving your membership staff the goal of selling more memberships and your admissions staff the goals of selling more packages isn't enough. It is far more effective to cross-train your teams so that the admissions team can sell memberships and the membership team can sell packages. Establishing a common goal between both teams creates synergy and grows revenue.
3. Measuring and recognizing performance pays off. Know who your top sellers are and then shout it from the rooftops! For a sales program to be effective, you must be able to measure both team and individual performance. With the right productivity reports, you will know who your top sellers are so that you can celebrate them by calling them out during pre-shift meetings. Most people appreciate being praised for their actions. What I often do is to announce the accomplishment, introduce the top seller who made it happen, and then I ask them what their secret is. I make it fun and turn it into an opportunity where they are the expert that everyone else can learn from.
4. Incentives can yield long and short-term gains. Short-term incentives include product sales commissions, gift cards, and other immediate gratification elements. Longer term incentives might include something like a President's Club in which quarterly top sellers might be recognized at a special brunch with the Company President. This helps to further reinforce your sales team's weekly efforts as they set their sights on a longer term goal.
5. Competition inspires performance (it doesn't kill culture). Healthy competition doesn't just sustain performance, it stokes the fires of excellence. Cabrera explains it this way:
There is a definite benefit to healthy internal competition in sales; it's a vital necessity. Healthy competition creates healthy results. But it only works when the foundation of your company is built around achieving common goals, winning and losing, together. We've had various sales contests where winners get to attend a World Series game, receive a special bottle of wine from their manager's collection, or enjoy a ski trip with their team. I can guarantee that the contests don't cause ill will. Jealousy? Maybe. But that's life, and that's sales. Contests that create competition while maintaining the existing company culture you've worked hard to build are extremely effective. "Commissions reward the top dogs for being territorial" is an undue stereotype that should be put to bed once and for all.
6. Embrace the Conflict (and don't insult the integrity of your sales team). Because most admissions and membership teams work alongside one another, your sales team will learn from each other. The most effective sellers become a model for the more mediocre sellers to observe, mimic, and ultimately to develop their own effective ways of selling. Your sellers will talk amongst themselves-they'll share their commission payouts and guest interactions-and that's okay. Cabrera advises building a sales team where conflict only makes them stronger and more effective:
What you need to do is construct a sales team of reps you trust, and then empower them to perform their best, without assuming they are primed to destroy your culture and customer relations. To do this, you need to give them tools that encourage friendly competition, motivate behavior that is aligned with your overarching company goals, and inspire performance.
...Xactly advocates for treating all employees equally by giving everyone incentives for reaching their goals. And while we aren't saying this approach isn't working great for Skonnard's company--I would wager to say they are an exception to a well-established rule and strongly advocate thinking twice about whether this approach could really work for you.
Have a great week!
Cabrera, C. (2014, October 1). 6 Reasons Why Sales Commissions Do Work. Retrieved December 12, 2015, from http://www.inc.com/christopher-cabrera/six-reasons-why-sales-commissions-do-work.html
"Sales are contingent upon the attitude of the salesman - not the attitude of the prospect."
- W. Clement Stone