The Pressure for More Sales

“We need more sales!”

“Okay, but the team says they are doing all they can to close deals.”

“Then let’s make it easier for them and have them just focus on enrolling any customer that they can. Remove any barrier that might be in their way. Get them to put more fish in the boat. We will let ops figure it out from there.”

Actual conversation between myself and the owner of a B2C consumer services company. I also know this is also a semi-paraphrased version of conversations that happen all the time between owners/founders/CEOs and some level of revenue ops leadership.

Underlying message: stop putting barriers and rules in the way of sales selling more new customers. Also, the message: volume is more important than quality.

The Cost of Prioritizing Volume Over Quality

And here is where it gets to once I am called in: Our reps are winning and making a bunch of money, but we as a company are actually losing. What has happened in that dynamic is that leadership has decided that unit volume was the most important sales focus. That more sales solve everything.

If you have been in that situation (or are in it now) then you know that not all sales are created equal.

For example, a sale that generates $1,000 but took $2,000 in marketing/leads and commissions to produce is not a good business model. (Of course, if it’s a recurring program/service, then does the projected lifetime value make it worth it?)

So why doesn’t it work out to have your salespeople focus on doing as many sales as possible? Seems like that would be the only thing that they should focus on, right?

Human Nature and Sales Motivation

The problem lies in this statement: people are motivated by what’s in THEIR best interest. Not yours. Not the companies. Not even the customers. People, if left to their default mode, will choose what’s in their best interest. Typically, that equates to the least amount of work, effort, struggle, grind to produce the most amount of money.

“But they are salespeople, they love to sell!” Nope – they love to close deals. They are motivated, in some way, by the money that comes from closing a sale.

Okay, yes there are some that love the process and conversations – the art and science, the game and tactics, the effort and challenge.

But I promise that doesn’t apply to most of your team. Just the top 10-20% that are producing 80% of your results.

The Reality for the Majority

The rest of your team – the middle and bottom – are focused on getting through each call, each day, each week. They are motivated by avoiding pain or achieving gain in the easiest and best way possible.

I am not saying they are maliciously trying to game the system, cheat the company, or lie to customers. I am saying they are human, and humans love comfort, safety, and easy.

The Consequences of a Single-Focused Strategy

When you set up the rules of the game for your sales team to only focus on one parameter – total sales – then that is what you will get.

But there is a good chance:

• If there is an option for price, they will sell the cheapest, easiest price option/package
• There will probably be a lot of cancellations (under/oversold, misled, not actually a good fit for their needs/wants)
• Your systems (CRM) won’t be updated
• There will be a lot of paperwork, submission quality issues

You didn’t incentivize or disincentivize any of those parameters. You only told the team that you valued total sales.

Balancing Quantity and Quality

Quantity. Not Quality. Top line volume. Not bottom-line profit.

Most companies don’t realize it until it’s too late, but they set up the game for only one player to win – the salesperson.

“Show me the incentives, and I'll show you the outcome.” – Charlie Munger

The key is you must build out ALL the rules of the game. It must be structured in a way that when the company achieves what it needs, the salespeople who helped that happen win, and the managers/team leaders who had winning teams win as well.

But be careful not to go too far to the other extreme of making it so only the company wins, and the game is impossible for the salespeople to win. They will all just take their ball and go somewhere else to play an easier game, and the reps that stay are riding out your base pay until you fire them. There is a balance, always.

Be warned, and you probably already know from experience - the teams won’t like it. Most people don’t like more rules. Most people want to play simple games they can win. Yet it has to be done for a company to succeed. Profitable, long-term enrollments are what matter most.

Key Considerations for Structuring Sales Incentives

I have helped many companies who are at this point determine the best parameters to put in place for their team. But here are some things to consider when looking at the rules needed:

• Do you have legal compliance requirements of what is to be disclosed and/or avoided?
• How long once someone is enrolled indicates they are onboard long term? (when do most of your cancellations occur?)
• How can you ensure your salespeople are enrolling each person for the appropriate sales price?
• What is the closing percentage needed to ensure a profitable level of Cost Per Acquisition?
• Is attendance important?
• Is being on time important - at the start of shift, and coming back from lunch? (office or remote)
  

Conclusion

Again, reminder – you must make it so that when your good salespeople who want to be a part of your company meet or exceed each parameter are rewarded for their ability to win the game you built.

Avoid the temptation to make it all punitive and restrictive (like car insurance companies that punish you if you have an accident) without rewards (like the insurance companies that now have ‘safe driver’ discounts for NOT needing to use the insurance).

Email me if you want to talk through your current comp plan, job description, and rules of the game for your sales team. We will review what you have and then talk through the plan for building a new game that everyone has the chance to win at.