5 commandments of the sales Department, or how to grow strawberries
Irina Narchemashvili, financial Director of ATManagement Group, lists five rules for effective organization of the sales Department – from dividing the functions of managers and paying salaries based on the results of the plan implementation-to building a system of employee motivation
As a child, I tried to grow strawberries at my grandmother’s dacha. I had a small garden, seedlings, watering can and the hot sun of Tbilisi. It would seem: plant, water, harvest. But no, my strawberries are dead. It turned out that the land needs to be fertilized, seedlings planted in a certain way, and the leaves are periodically treated with protection.
I didn’t know that, because I didn’t listen to anyone and I wanted to “do it myself.” Wise grandmother then did not argue, so instead of delicious strawberries, I took away from the cottage an important rule — it is not so important “what” you have, it is important “how” you use it.
It also works in sales. It doesn’t matter what qualities your managers have (seedlings). If you violate the basic principles of sales organization, your income (strawberries) will not grow. Today I will talk about these principles. And let’s just say I won’t open America. 80 % of my readers know these principles (even laws) better than the multiplication table. But. If at least one of them is not performed in your company, congratulations, you have found a point for the explosive growth of the sales Department. That means income.
I start, and you check yourself.
Divide and sell
The company must have two sales departments. One works with existing customers, the other with new customers. This is the most important rule. If one Manager works with both, it means that 90% of the time he works with existing clients. Such is the paradox.
Selling again is always easier than selling the first time. Here, the transaction goes faster, and brings more money. But without new customers, the business is at risk. What happens if a key buyer leaves and takes a third of the total revenue with them? New clients are fresh blood. Work with them just as carefully!
If you don’t have many managers or you sell by yourself, divide the day by hours. In the morning we look for new clients, in the afternoon we work with regular ones. This will not replace two full-fledged sales departments, but it will become easier to work, check it out.
A hungry wolf is better than a full dog
This commandment is about salary. Pay sellers the minimum salary that is set by law. Make the rest of your salary a bare percentage. Understanding that your earnings depend only on you is perfectly sobering and motivating.
If you are still working with sellers under the “fixed salary + premium” scheme, stop. Your sellers will immediately start selling, instead of washing the bones of customers in the Smoking room. Revenue will go up.
Someone will write that sellers also need protection. Someone will complain that no one will work for a bare percentage. Okay Pay fixed salaries for the first few months. Slowly reduce their size and quietly give up completely. Salaries are evil. Don’t pay them, especially to sellers.
I didn’t come up with a name
Don’t laugh, I really didn’t come up with a name. This item combines the previous two. But you just need to talk about it separately.
Managers need to earn a salary only after the payment from the client has fully arrived on the company’s accounts. Has it ever happened that you provided a service or product in installments, and then the buyer refused? The cost of the purchase must be returned to him, but some of the money has already been paid to the seller.
It used to happen that managers ship goods by the ton and row money with a shovel. And then customers don’t pay. Accounts receivable are growing. And the sellers continue to “peddle”. To avoid this, see the first sentence of the paragraph.
The percentage for managers working with regular and new clients should be different. Calculate the average check and there, and there. Make your salary fair and competitive. Such that you can earn good money in any of the sales departments. Then people will stop rushing, there will be less conflicts and staff turnover.
And finally, life hack for wholesale companies. The salary should not be linked to the payment amount, but to the margin. That is, to the profit that you get after all the expenses. If you do this, sellers will stop constantly asking you for discounts, because it will cut their salary.
Motivate, motivate, and motivate again. No matter how high a percentage you pay, employees always need additional stimulation. Several working methods are listed below.
Games are not football or cards. It’s such a “battle” between all the sellers. Who will bill faster, who will sell more in a day, week, month, or year. Works like a clock.
The goals may be different. Three invoices issued, the first payment for the day, more than 1,000,000 per week, and so on. Prizes, too: money, movie tickets, a place on the honor roll, a passing Cup, and even a passing car.
Imagine buying a cool car once. And then managers fight for the right to use it every month. This game will never get bored, I assure you! Even though they pay for gas, maintenance, and repairs themselves.
You need to motivate with bonuses correctly. So that the Manager can easily calculate what the bonus depends on and how to get it. A good example is the progressive bonus.
Sold 10 products/services-salary 5 % of the margin;
Sold 20-salary 7 % of the margin;
Sold 30 — the salary of 10 % of the margin.
We have already implemented such a thing for a long time, the increase in income was about 8-10 %, it seems. So don’t hesitate to try!
This is the shortest point, because everything is individual. Someone is selling the training, someone skiing, and some penthouses. But. Sellers must learn and train. It is best if every day.
In the ATM, managers work out techniques and conduct trial closings for about 30-40 minutes a day, while they also study new techniques and watch motivational videos. I will not write about the results of training. I’d rather tell you about the failures.
A few years ago, we tried to cancel training for a couple of weeks. No more trying. Draw your own conclusions.
Friends, this is how I got the sales Department’s commandments. Maybe something is crumpled and confused, maybe I forgot to write about something at all, but this is what works for me in the company. And if you were at least a little useful, then it’s not for nothing!