Comment from Peter Saxon

Recently, I test drove a Tesla – a revolutionary new all-electric car that is not only remarkable for the way it drives but for the way it is sold. Ostensibly, there are no dealerships and no sales people. You must order your Tesla online, add the accessories you want and pay the price that appears on your screen. You can’t negotiate. There’s no one to negotiate with.

The only human contact was Alex (not his real name) who was assigned to take me on a test drive and to explain the car’s features. Although Tesla had harvested all my details when I booked the test drive, Alex asked for my business card and posed a lot of questions that were designed to ensure I qualified as a genuine prospect.

Alex insisted he wasn’t a salesman and was not on commission. Well, if he wasn’t a salesman, he was doing a awfully good impersonation of one as he proudly explained the benefits of his product, both technical and aspirational. And while he may not have been on a commission for each car he “sold” you can bet Black Caviar odds that if Alex failed to convert a set number of test drives to sales each month, he’d be gone quicker than a dullard on Million Dollar Minute.

I will never hire another salesperson says Brian de Haaff, CEO of Aha

Today there’s an emergent school of thought that suggests that sales commissions are counterintuitive to the modern sales process. Brian de Haaff, CEO of Aha, says he Will Never Hire Another Salesperson. He, along with a growing number of voices, contend that commissions hinder a salespersons’ focus on the clients’ needs in preference to their own.

Interesting point.

Consider this: When tennis ace Novak Djokovic stood on the base line of centre court at Wimbledon last Sunday, about to serve to seven times champion Roger Federer, what do you think was going through his mind? I doubt he was thinking about the £1.88m prize money or trying to figure out how much it would come to converted to Euros. 

If that’s so, then what role does the gargantuan prize money play? 

A professional tennis player, or any elite sports person for that matter, only spends a fraction of their time actually playing for prize money. Most of their time is spent practicing and training for long and tedious hours, pushing themselves to the limits of their endurance. That’s when they’re most likely to ask themselves, “is this worth it?” And that’s when the powerful twin incentives of fame and fortune are likely to kick in with the desired effect of helping the athlete push through the pain barrier. It can be as effective as any performance enhancing drug but perfectly legal.

Like athletes, good salespeople are, by nature, competitive.

Also, each professional sporting body, whether tennis, football or cricket, competes for eyeballs and bums on seats. Their core product, “the game,” hinges on the quality of the spectacle which is only as good as the ability of the players. Prize money is the sports codes’ investment into the players’ development to encourage them to do the hard yards as well as provide the incentive to invest in the best coaching, medical and psychological support they can.

Enough of sport, let’s get back to the real world of radio sales. Like athletes, good salespeople are, by nature, competitive. They may be good “team players” but they will always strive to be the best player on their team. 

Ultimately, the best player is the one who can make the most sales each month. However, successful salespeople spend comparatively little time actually closing the deal. In fact, closing is the easy part – the result of a lot of hard work done before hand. Prospecting, setting meetings, discovering and understanding the prospect’s business and their needs while building trust and confidence all takes time and commitment. Truly successful salespeople wouldn’t even attempt to close and make the sale until all the groundwork has been done.

Unfortunately, some salespeople, often aided and abetted by their company’s culture, try to squeeze more sales into arbitrary deadlines like the end of the month or financial year to reach a given target that will yield a specific reward usually in the form of a sales commission. 

The best sales people know that if they concentrate on their clients’ targets, their own targets will take care of themselves.

Of course, this has been a common practice since Adam was selling bagels to the Israelites. But, again, it seems counterintuitive in the modern world of consultative selling because while it may solve a short term problem for the sales rep, it’s of little benefit to the client. Worse, it tempts the rep to cut corners by trying to close the sale before the all groundwork’s been done.

What’s the answer?

To me, the words “sales” and “incentive” go hand in hand. Unlike many other job functions where its difficult to measure effectiveness, genuine sales people revel in the fact that their performance is measured against clearly set goals. In the sales department there’s little ambiguity. Make budget, your job is safe. Overachieve and you become a “rock star” and be paid accordingly.

In the same way that selling techniques have evolved over the years, sales commissions need to evolve along with them. Commissions that are based simply on deals closed are very blunt instruments and can, indeed, be counterproductive because they may reinforce bad habits.

The best sales people know that if they concentrate on their clients’ targets, their own targets will take care of themselves. If that’s the kind of ethos your station wants to nurture in its sales team, then the commission structure should reflect that.

A sales commission will never turn a bad rep into a good one. It may motivate, to a degree, however, commission can help motivate a good rep to be great.

In the end, the best incentives revolve around mechanisms that reward the salesperson for creating client relationships that stand the test of time with a structure that works to closely align sales activity with business goals, visions and values.

Peter Saxon was was the innaugral Retail Sales Manager at 2WS (now WSFM) and is Chairman of IRD, Australia’s leading Media Sales Prospecting Service.