Written By: Richard F. Libin
With a positive attitude, you can accomplish almost anything. Positive breeds positive and negative breeds negative. How does management motivate every salesperson to view each connection as an opportunity to make a sale? Salespeople should view each prospect as someone worth building a relationship with.
by Richard F. Libin
Businesses spend millions in advertising to draw traffic into their stores. Yet few count this traffic and use the information to measure the true performance of their sales teams. When they do, most realize that their sales people close only at a rate of 15% or less. Why? Attitude. Without a positive attitude that emanates and is nurtured from the top, closing ratios will never improve.
Most businesses look solely at units sold to reward star performers, this is one of the fastest ways to de-motivate and create negative attitudes. This measure tells management that they don’t have good salespeople. It tells salespeople that business is bad or that the people have no money to spend and don’t really want to buy. It leaves everyone asking, “How can I make any money?” Looking only at units sold creates a negative attitude that can become a self-fulfilling prophecy. Soon words that kill deals before they start – no, don’t, won’t, or can’t – creep into the team’s vocabulary.
When a hot new product – like the latest iPhone – launches, stores realized an immediate increase in traffic. Yet, when facing prospects interested in the iPhone, most salespeople told them, “No, we don’t have it. We won’t have it for months. We can’t tell you when that will be.” As a result, everyone walked away empty-handed: no phone, no sale, no commission. The question is, “Was this an opportunity for the salesperson to sell the customer on what they had available?” With a positive attitude, the answer is yes. Some prospects may have purchased other models if they had been given the opportunity. How does management motivate every salesperson to view each individual who comes into the business as a prospect worth building a relationship with? Motivation and incentives.
Reward vs. Motivation
Typically, salespeople are judged on how many units they sell and given “incentives” based on volume. Consider a contest where the person who sells 20 units in a month wins a TV, and one who sells 40 in two months wins a mini-vacation. To win the contest a “top producer” who typically sells 18 units a month, only needs an 11% increase; the average sales person who sells 15 units needs a 33% increase, and “other producers” who average 10 units monthly need a 100% increase. These contests recognize top producers who already take home bigger commissions. Consequently, they de-motivate the majority of the sales team.
To motivate, sales contests must be based on the current performance level of every team member and reward improvement based on an accurate traffic count. Take two sales people, Joe and Bill. In one month, Joe talked to 150 prospects and sold 20 units; Bill worked with 40 prospects and sold 8 units. Joe outperformed Bill and sold more units. If you look at traffic, however, Joe missed 130 sales opportunities and closed only 13%, while Bill only missed 32 opportunities and closed 20%. Bill actually outperformed Joe!
Using units sold in the context of traffic count, managers can structure sales contests to reward an increase in performance or close ratio. This creates a fair playing field, motivates the entire team, and rewards improved performance. As an added benefit, most salespeople start prospecting again, realizing that to win the contest, they must bring in their own leads instead of relying solely on the business to provide prospects.
To create a positive attitude that encourages salespeople to see every person who comes to a dealership as a potential commission or sale, these tools must be applied consistently and fairly across the entire sales team. After all, what would even one more sale per salesperson per month do for your business?
Richard F. Libin
Richard F. Libin has written two acclaimed books that help people of all walks…
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