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Wall Street & Us

      
Ed Horn's picture
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The popular anger at Wall Street bonuses for those saved by the United States taxpayer is understandable. It is abusive that the public bailout of financial institutions seems disrespected by the banks that were saved by us. They appear not only insensitive and uncaring but isolated in a world of delusions and egomania.
 
In 2007 the new Chairman of Circuit City fired any commissioned sales rep earning above a specified curve thought appropriate by some bean counters. Their Board approved this narrow destructive approach failing to appreciate the benefits accruing to the Company from a motivated sales force.
 
Immediately sales at Circuit City stores dropped precipitously. Customers abandoned the stores in droves failing to find a sales rep that responded to their needs. What the customers found were the least able sales reps who had survived the cost saving measures that terminated the employment of the most qualified. Circuit City found its rewards for their misguided management decisions in Bankruptcy Court.
 
We may laugh at Circuit City’s tale of self annihilation failing to see what our nearsighted prejudices are costing us. Having occasion to discuss compensation with some of the majors in our profession I have often heard that compensation to acquire and retain the best is no longer being offered. There is constant conversation of how things used to be. It may be that there were mistakes in the past of paying salaries and commissions based upon performance levels not warranting the rewards received. Yet if mistakes in the past occurred it does not negate current errors. Both were failures of judgment and management.   
 
 
We all have heard of a sales rep that has lost territory when commissions grow. The logic appears to be that a commissioned sales rep can make too much. Any properly run company though includes the cost of sales in pricing. The conclusion must be a conscious effort to limit, if not punish successful sales reps.
 
It is, and will remain true that sales reps can earn more than their salaried superiors. It is a tough relationship when a boss who is salaried has a subordinate earning more. The inevitable conflicts are hard to avoid. This is the point wherein upper management must exercise control insuring the unified obligation of employees doing what is best for the by all overriding personal jealousies for the common good.
 
The reality is that few companies have the mentality or interest in avoiding these conflicts. It would seem that the level of engagement required to insure the continuing health of the company is unseemly for CEO’s or COO”s. Remarkably as sales is the driving force behind most businesses sales reps are overlooked, disdained given little credit for their efforts or respect for their achievements. 
 
Our profession has too many turnovers of sales reps and sales managers. No one should be employed if they cannot perform the job they were hired to do. Significant positions remain open with the majors and even smaller operators. Some are filled by temps or individuals whose qualifications are not our first choices if we had alternatives. The consideration that limiting an applicant’s income potential reduces quality is the Circuit City mantra. For those who follow it their future should be no different than the same outcome.   
 
Our profession has always been a people’s business that serves multiple responsibilities. As business owners and operators we must insure the financial health and vitality that permits our doors to remain open. We have selfish needs to earn enough to provide for our families. But we have an ultimate obligation to the families we serve. When we diminish the quality of the people we select to represent us we forfeit any right to claim we are serving any interest other than our own. 

Bravo!

However Ed, let us not hold the management of a buggy whip era company out to be the example of "compensation incompetence". If a sales person makes the sales look too easy then the rest of the world thinks it is easy. Like the proverbial duck paddling without moving its body above the water, some sales people make it look to easy.

Some organizations don't realize it but they pay too much because they fail to manage the sales process. One client we saw had the same commission for walk-in consumers as for out of house produced leads. Therefore the sales people stayed home and watched people walking in and fought to get to the door first. One smart sales person, didn't even work at his desk. He worked out of his parked car and when people came to the building he would actually meet them in the parking lot, beating his colleagues to the door. I learned this when he almost tackled me in the parking lot the first day I came on site.

Sales is a thankless job, unless you have no sales. Those not in sales should try it for a day, week or month. Then, they can appreciate it the generation of revenue from the embriotic stage.

Dan Isard
The Foresight Companies, LLC
In sales since the age of 4

jonkobeck's picture

Sales turn-over

Ed I agree with your comments above.
Unfortunately sales and sales managers in general have a high turn-over rate in any industry.
This is the nature of the beast.
We are only as good as our last sale, our last month, etc.

As a former top selling memorial counselor myself, I have been in situations where I was earning as much as 4 times as my sales manager. Being the second or third highest paid employee in a New York City Mega-cemetery does breed contempt and jealousy from management as well as peers.
This is truly an unfortunate situation!
Management needs to realize that the best way to insure their positions is to have a happy and content salesforce.
High turn-over among sales people is the manifestation of a flawed management team.

To quote an old friend - "The fish rots from the head down"

Jon Kobeck
Sales and Sales Leadership
http://www.linkedin.com/in/jonkobeck