Sales Lift

I'm going to tell you a secret that every Sales Manager should know. It works best if your Salespeople are new to sales and/or if you have recently changed your bonus/commission plan, even better of you pay Salespeople their commissions quarterly, biannually, or annually, but it works to some degree with all Salespeople and it can lift your sales revenue by as much as 10% to 15% with almost no effort on your part.

If you are not already paying commissions monthly, start. There are 3 reasons for this, and they're all simple:
1. Salespeople work best when they have immediate, tangible rewards and/or punishments.
2. It encourages them to work harder the next month, rather than to mope for 3 months.
3. You want your Salespeople to get used to the idea that they have extra money at least once a month so that they use this money to buy things on credit. This usually happens within 60 - 90 days of the new plan.

This last reason is the charm. The moment a Salesperson buys something on credit, they now have to at least hit the goal that they did in the month that they incurred the debt just to make the payment on the item. And because they made enough money that month to buy what they consider a 'luxury' item (ie, a big TV, newer car, boat, etc.), that artificial lift in what they have to make is now a monthly must. And if they want to have any fun with their friends, they have to earn even more than that.

You did nothing, and your Salespeople lifted their quota all by themselves. If they are younger, the lift tends to be higher. If it is a new commission plan or you have just moved to monthly payouts, the lift tends to be higher. But even if you have always paid monthly and you have a veteran Sales team, a simple change in commission structure that elevates pay for 30 - 90 days... such as rolling out a new, progressive pay plan that coincides with your busiest season, you'll see some lift. Again, with almost no effort on your part.

Once your Salespeople get used to hitting the higher goals they've set for themselves and are comfortable with it (typically 6 - 12 months), they'll start to realize that they deserve a reward for and a break from working so hard. That takes us to step 2 of Lift: Planning the Big Vacation. This vacation is typically something that will take 'extra' money from several commission checks - 3 to 12, depending upon the destination and the number of luxury goods the Salesperson has purchased. The important thing is, to go on this vacation that they've promised themselves, they no longer have to just hit their new, higher goal... they have to start planning to hit an even higher goal over the long term.

Now your Salespeople start strategically planning how to even out their revenue stream by elevating every month, making the 'slow month(s)' less slow... sometimes even making them even better than what used to be your better months.

Of course, all of this is predicated on having hired Salespeople who are intelligent and not afraid of hard work. As long as you've done that, sales lift happens the moment you apply its driving factors. The best part: No one can get mad at you, because they did it to - and for - themselves. And if you've hired the right people, lift continues to happen when they decide to get married, have a child, have to pay for college for that child, put aside money for retirement, and on and on.

But you absolutely must do the following to make lift work:
  • Payouts must be perfect each and every month. The moment a mistake is made on someone's check, their confidence in that money being there collapses, and will never return. They may even begin to sandbag.
  • Your pay plan must be so simple that a 4-year-old understands it. Every moment that a Salesperson has to spend figuring out how much money they should be making is a moment that they're not selling. If they can't figure it out, why should they trust it?
  • Lift doesn't work if no one knows how much money they've got coming, updated at least weekly (and daily is better). Make it something every Salesperson can see at a glance, no matter where they are, so that they can watch those dollars accumulate toward making that boat payment or paying for that vacation. If they're worrying about where they're at, they're not selling.

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