To date, I’ve heard so many people in sales use the phrase, “I’m coin-operated!” And, they are implying they are merely driven by cash–the cash which is provided by selling more. This saying has been bandied about so much that I don’t think those who say it really understand what they’re saying. As if cash were king for why they do what they do.
But, if you really sit back and think about it, the saying actually is the antithesis of what it is purporting.
“Coin-operated” really means if you put money in, you get something out. It really would be better aligned with doing some sort of piece-work labor, like sewing clothes or making shoes. Coin in, shoe out. Or making one of those children’s toy horses at the store front run–put coin in, horse goes, “Nay!”
In tech sales, that piece-work model really doesn’t make any money. If it was coin-operated, then I would be making more and more as I put more effort in. Sell more widgets, make more money. But compensation plans are still being crafted like they were at the turn of the century, last century, that is circa 1900. If I set your quota at $1MM, then when you achieve that number you should make whatever was agreed to. But if I achieve $1MM, and then you raise it to $1.2MM, I’m not coin-operated, I’m effort operated. I’m the reverse of the phrase.
In the end, it has been shown that incentive based compensation has limitations. If you want your reps to work for you instead of against your plan, then you need to compensate them in a way which recognizes what goes into the sale.
Strive to achieve that end. Don’t work at building hurdles and obstacles into a plan to make your reps work harder. If you build in disincentives, then you aren’t working at getting more business, you are working at getting rid of your rep.
In the end, the goal should be to make the sales rep successful. Moving target quotas, territories or account lists doesn’t enable that.
Think carefully when crafting a compensation plan about what behaviors you are trying to reward. Is it new logos? or renewals? or account penetration?
Many years ago I listened to a conversation between Jay Abraham and Tony Robbins. I remember my brain lighting up listening to Jay speak because he confirmed everything I had already deduced to be true in the connection between sales and marketing.
The specific tie to this post though, was in regard to customer acquisition versus customer retention. Currently, when I receive notices from recruiters, all of them say “looking for a HUNTER” (caps optional, depending on the recruiter). Now, when it is a new company with a new product which is reaching out into a new territory, the idea of a hunter sounds like just the ticket. Get some guy to go and bust down doors and beat the crap out of a customer so they buy.
Let me throw out an idea. Hire an established farmer.
What? Blasphemy! (That’s you talking, not me.)
Why would I propose that? Because if you hire a farmer who has a sizeable network of customers he’s dealt with over the years, then he has a much better shot of getting a meeting with a potential buyer than someone coming into the territory unknown.
It’s just a thought, but it might prove better than hiring a rep knowing that he is going to put A LOT of effort into finding prospects, only to probably not meet his quota. He’s going to put in a lot of coins before he gets operated.
So look at how you are approaching your market and how your rep is going to make money.
Because, if your rep is making money, then the company is making money.
Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com