Are you feeling a little nervous about building an Income Floor into your sales compensation plan? If you are, it is probably due to past bad experiences. Many companies have invested huge sums in salesperson salaries, draws, guaranteed commissions, etc., only to see their investments fail miserably. Earlier in the book we examined one of the key reasons behind these failures: hiring salespeople who lack the attributes required for sales success. This chapter will focus on a second key reason: focusing inspection on results rather than activities.
When salespeople produce results, it makes perfect sense to inspect those results. You can do so by asking questions such as: How much revenue is each salesperson producing? How profitable is that revenue? How does each salesperson’s performance rate when compared against quota? How does it rate when compared against the performance of other sales team members? And so forth.
What do you do if you don’t like the answers to these “results inspection” questions? What do you do when a salesperson shows some flashes of ability, but their performance is not consistent? How do you determine what the problem(s) might be? For that matter, how do you determine whether a brand new salesperson is performing enough of the right activities to meet the 30, 60 and 90 day performance goals that you have established for them?
To answer these questions, managers need to inspect their salespeople’s activities. Activity inspection provides an “early warning system” for many performance problems. Plus, when activity is inspected regularly and consistently, it helps create and reinforce the company’s sales culture.
What is activity inspection? It is the process of inspecting a salesperson’s day-to-day activities to determine: (1) whether they are performing the correct quantity of activities; and (2) whether they are performing the activities correctly (quality).