We will not discover America and claim that we have found the magic formula for financial motivation of sellers “salary + percentage of sales”. Of course, it works, but, as always, the whole point is in the nuances. What should be the ratio of salary and bonuses? What are the parameters for calculating the premium size? What indicators to consider percent? What else do you need to consider? It is impossible to create a universal scheme, as it is impossible to equally motivate sellers of cell phones, luxury yachts and land for the construction of factories. But some rules still exist. Let's discuss them.
Most often, they recommend setting a salary of 30% of the total sales manager’s earnings. In general, its size varies from 20% to 50% depending on the industry. Is it possible to not pay salaries at all or to make it minimal? Theoretically, yes, and there are companies that succeed. But these are rather exceptions that confirm the rule.
Why do I need a basic salary? Firstly, for a sense of stability and protected rear. Sales managers are ordinary people who need to feed their children and pay loans, they want to be sure that they will not be left without a “living wage”, no matter how things turn out. Secondly, the sales volume almost never depends only on the seller, it is influenced by many factors from the lack of a popular product (they sold everything, they didn’t give a new batch) to the quantity and quality of advertising. Thirdly, to confirm the reliability of the company. An employer who keeps sellers at bare interest is automatically suspected of dishonest intentions or poor financial condition.
What salary size may depend on:
- From the presence / absence of fluctuations in the volume of sales associated with seasonality, regularity of supply and other factors.
- From how much the manager determines the number of potential customers. When the seller is engaged in cold sales, everything is in his hands. In other areas, you can build up a base of regular customers, and then the process will go on the thumb. But, for example, in the field of residential real estate, sellers are tied to incoming calls, the number of which they can affect only very indirectly.
- From the duration of the transaction cycle. To sell one type of product, you need one contact with the client, for another type of product the process takes several weeks, in other cases, the manager can conduct one sale per year, but in tens and hundreds of millions of rubles.
The more unstable the seller’s income due to external factors, the higher the salary should be.
Sales Bonus Amount
There are three approaches to determining the size of bonuses:
- Fixed percentage. It’s simple, it’s clear to everyone, it’s easily considered, but poorly motivates managers to “punch the ceiling” of their capabilities.
- The percentage of remuneration depends on the implementation of the plan. Relatively speaking, if the plan is not fulfilled, the seller receives 5%, if completed - 7%, overfulfilled - 10%. You can define various gradations: zero bonuses if the plan is completed by less than 50%, a super bonus for overfulfillment of the plan by 120%, etc. Instead of interest, there may be certain premium amounts. Naturally, it is understood that a sales plan must be.
This scheme is very fond of active, ambitious sellers. It does not allow “sitting on the priest exactly” to those who are ready to earn relatively little money, just to not strain.
For goods with a long transaction cycle (weeks or months), there is a danger that the seller, realizing that he does not fulfill the plan in this period, will begin to drag the last customers into the next month. But this risk is not so significant as to abandon the advantages of this scheme.
The second danger is of a completely different kind. This is the notorious “toad”, which can stifle management when some salesman is tense, overfulfills the plan by 200%, and he will have to pay more than the top managerial salary. Quite often, the next month, the sales department receives a new plan - 2 times higher than the previous one. What destroys managers any desire to exceed it. Even worse, when the authorities cut off the super-bonus under far-fetched pretexts and do not pay a reward in the promised amount. Then the sellers lose their desire to work in this company in principle.
- The percentage of remuneration depends on the implementation of not only a personal plan, but also a plan for the department. This is done so that managers understand that together they can do more than individually, and are ready to share customers and help each other, rather than waging a war for customers and other intrigues. Such a scheme is not needed by all companies, but if a client can contact several employees during the purchase process, it is very desirable.
From what amount to consider bonuses
- Of the total amount for which sales were made (sales). Again, it's simple, everyone understands, easy to calculate.
- From the amount of profit (revenue minus production costs and all other costs). It is practiced in those companies where sellers have the right to determine the sale price of the goods or the size of the discount themselves. Then they lose the incentive to sell more at the expense of a lower price.
- From the amount of income. It is practiced in those companies where payment for the goods does not arrive at the same time, but there are prepayments or installment payments. This is sometimes called the “receivables reduction bonus”. Then the duties of the sales manager may include calls to customers with a reminder that the next payment is due.
What is the plan
Everything seems to be simple - from what amount (sales volume, profit, income) we pay a percentage, and we set the plan. But sometimes you need to encourage managers not to follow the path of least resistance: sell not only the most popular products, lick not only the largest customers, etc. For this, additional indicators may be included in the plan, for example, the exact number of units of a product, product group (or its share) that needs to be implemented, or the number of transactions.
KPI sales managers
In many cases, it makes sense to break the bonus that sellers receive into two parts:% of sales and remuneration for achieving targets. Key indicators may include:
- Number of calls made (to both potential and old customers)
- Number of commercial offers sent
- Number of meetings held
- Number of attracted new customers
- The ratio of processed calls and transactions (conversion from lead to customer) - for companies where managers respond to incoming calls and letters
- No complaints or complaints from customers
- No errors in the formation of documents
- Complete and timely data entry in CRM
- Timely submission of reports
- Knowledge of scripts and their observance in conversations with clients
- Labor discipline
Such a system helps to kill two birds with one stone:
- Not all sellers are experienced, disciplined, and lazy enough to follow the sales funnel themselves. Some simply do not have in their heads the understanding that on average, in order to get one customer, you need to receive / make 100 calls and hold 10 meetings (the numbers are, of course, conditional, they are different for each industry and company). And so I worked out the required number of calls at the right time, you see, and the deals went.
- If the manager receives only% of sales, he seeks to minimize the time and effort that is spent on actions that do not bring the corresponding result. As a result, the CRM is filled through the stump deck, the reports are submitted late and “get off”, and the Fed refuses to register the contract of sale of the apartment due to errors.
It is possible to develop a system of fines based on these indicators, but the concept of “not working” is always perceived better than “taken away”.
Yes, it is sometimes possible and necessary to fine sellers for gross violations. For example, the manager yelled at the client or violates the dress code to an unacceptable degree. The main thing is that the principles and amount of fines be communicated to all employees in advance, and not arise after the fact.
The second task of negative motivation is to keep sellers in good shape and stimulate competition between them. For this, the rule is most often introduced - if the manager does not fulfill the plan for 3-6 months in a row, then they part with it. This makes sense, because people sometimes get into sales by chance and do not want (or cannot, due to their nature) to work effectively in this field. The result of their work is not just zero, but negative, since other employees lost customers (to attract which the advertising budget was spent) would turn into buyers.
The main thing is not to go too far. One company fired managers who showed the worst results for three consecutive months. At the same time, only three people worked in the sales department, the plan “the worst employee of the month” could be implemented, and external factors (for example, sick-list) were not taken into account. As a result, people were afraid to go on vacation, the situation in the department was extremely nervous, and the relations were not friendly, but really wolfish.
Scylla and Charybdis seller motivation systems
If you make the system of motivation for sales managers too simple, it can lead to distortions, which were discussed above. If you make it too complicated, then managers cease to understand how much they earn and why, what demotivates them.
Such a motivation system is considered ideal when any seller, armed with a calculator (or better without it), can, in a few minutes, at any time, calculate how much he will receive at the end of the month. In reality, this is not always possible to achieve, but you need to focus on the most important parameters for your company, discarding everything secondary. You can be guided by the following rule:
- A sales plan is set for no more than two indicators.
- The progressive scale of percent from sales has no more than 5 gradations, and preferably 3.
- Employees set no more than 3-4 KPI.
Simplify the perception can salary tables on the wall or in a specialized program. At the same time, the competitive effect will increase.
Not only money
There is an opinion among managers that sellers are only interested in money. In part, it is true, since the size of the salary in this case is a measure of the professionalism and success of the employee. A good sales manager is passionate and results-oriented.
But this should not cancel the human attitude towards sellers. And we like, under the pretext of “this is your money,” to completely deprive managers of the weekend on the weekend, so that they almost completely lose the opportunity to spend time with family and friends. Or they will be obliged to answer customer calls from home even at 12 a.m. And then they wonder why there is a riot on the ship.
The sellers pour a lot of negative on the part of customers. If, on the part of the company, they also see basically only negative things (they “flatter” for not fulfilling obviously unrealistic plans, are fined for the slightest oversight, they constantly arrange spoiling), then professional burnout and staff turnover are inevitable. Maintaining a positive attitude of their employees is the direct responsibility of the head of the sales department, but the rest of the top managers should participate in this and at least sometimes say “thank you”.
Last thing. Sellers must believe in the product they sell. If they have doubts about its quality or the integrity of the company (when selling services, for example), and they feel they are “retractors,” then the most elaborate motivation system will not help.
And what do the sales managers themselves think about this?
Ekaterina, sales of commercial real estate and land in the B2B market: “Stimulates when bonuses are real to receive. In my sphere, it often happens that at first the employer's promises look beautiful, but in fact it is impossible to get them in full. I appreciate compliance. Are premiums needed for additional metrics? I think not: if there is no result, what difference does it make, how many calls and meetings I have made. ”
Elvira selling home textiles: “In my opinion, there must be a minimum salary and a fixed percentage of revenue. As soon as different gradations and additional conditions begin, I cease to understand how much I will receive at the end of the month. It makes me nervous. ”
Tatyana, retail sales at exhibitions: “It motivates me when the more goods I sold, the higher the percentage I earned. Additional sales require effort: you need to actively communicate with customers, offer them different options, and talk in detail about our products. It must be rewarded. ”
Mikhail, sales of country houses and plots: “Motivates the opportunity to earn more money. Our bonus size depends on the implementation of both the general and individual sales plan. However, if the general plan is not fulfilled, and your contribution to it is more than 50%, then you, on the contrary, get a higher bonus. There are also lowering coefficients if, for example, you sell houses or plots in only one location.
When managers see that the general plan is not being implemented, and the personal share is less than 50%, they begin to delay transactions with all rights and falsehoods in order to transfer them to the next month. Energy is being spent on this, which could be directed in a different direction, if the leadership was more flexible. ”
Oksana, apartments for sale: “The progressive scale stimulates me. If you usually get 0.3-0.4% of the price of an apartment for a deal, and 0.7% for exceeding the plan, then the drive itself begins. ”
But not everything that is good for the manager is good for the company. It usually takes a while to find a middle ground, but it's worth it. No need to be afraid to give up solutions that have demonstrated their inefficiency, and try something new.
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Cash Ways to Motivate
People want to make money, and that's great. Motivation with money is one of the most correct motivations for an employee. However, one should not think that we will achieve the level of diligence and responsibility we need by raising the salary alone.
It can often be even the other way around. After a series of salary increases, the manager is lazy and decides that he is "enough." Either there will be a constant increase in the "dose" from you, otherwise he will begin to "break". Let's look at how to properly motivate money sales managers.
# 1 - Simple Salary Formula
I think there is no need to explain that for a sales manager, the bulk of the salary should be gained as a percentage of the amount of transactions concluded. And the fixed part should be only the very minimum necessary for survival and passage of verification by state bodies.
At the same time, there are a variety of options for how to assign percentage to sellers. Someone gives a constant percentage. That is, if the client pays us every month, then the manager receives a percentage from him every month. But this approach seems to me wrong, because an experienced manager will gain a pool of customers in six months - a year and will stop working at all.
Another option is a floating percentage, which depends on the amount of the transaction. You can also increase the percentage depending on how many transactions the manager managed to conclude during the reporting period.
All these methods have their pros and cons, and only you can experimentally find the perfect formula. But there is one general rule - this formula should be simple.
That is, each manager should be able to quickly calculate in his mind how much money he has already earned today. If he has to take a calculator in his hands or pick up some accounting papers, then you have a bad percentage calculation formula.
The simpler the better. In addition, it enhances competitive spirit. If each seller in your team can calculate how much he has earned and how much his colleague is, this is very useful. When everything is honest and transparent, for some reason I really want to earn more than a colleague.
# 2 - Competitions
You need to constantly conduct training for your sellers in order to maintain their fighting spirit and hone sales skills. We talk about this in more detail in the article “Training Plan for Sales Managers”. And it will be very useful if after each such training you will conduct certification.
Those who will pass the exams well will receive small cash prizes. This motivates people to learn more responsibly and repeat all the material they pass before exams.
#3 — Дисциплина «рублем»
Самая важная часть рабочего дня менеджера по продажам — это утренняя планерка. Она проводится каждый рабочий день с 9:00 до 9:30. The current situation with the implementation of the sales plan is analyzed at the planning meeting, a “charge of vivacity” for the whole day is given.
And it is very important that all sellers are always present at the meeting, and that none of them are late. The work day should begin in a disciplined manner. And so that everyone arrives on time - enter a late fee. Say everyone who is 5-10 minutes late puts 50 rubles in a common piggy bank. If you are late more - then the penalty increases.
At the end of the month, you can take money from the piggy bank so that the whole department can go and drink beer. So you will strengthen discipline, and team spirit will not undermine.
Employee motivation - changes in the last 5 years
Recently, margin (business profitability) in many segments has significantly decreased. Increased competition provokes an increase in the cost of attracting a client, while the effectiveness of traditional advertising methods decreases annually by 5–8%. Now the emphasis is on Upsell and Cross sell sales, which means an increase in the average purchase receipt and sale of related (additional) goods.
Modern sales techniques for the market of mobile technology and gadgets
One of the effective methods of raising sales is staff motivation. It is aimed at making the employee interested in actively working with each visitor to the store, transforming him from a potential customer into a real buyer.
Increasing employee incentive
The material interest of employees is the most effective driving factor for any type of business. It is not worth talking about the advantages of one species over another, but it is on the basis of material incentives that a further motivational system is built.
So, this type of motivation is a set of material incentives:
- differentiated remuneration of employees, adequate to the indicators of their work (rate and percentage for the amount of work performed),
- fair bonus, moreover, regular (every month, quarter, year), additional payment for labor for many years, material incentives for the introduction of new working methods,
- commission payments corresponding to the percentage of overfulfillment of the sales plan,
- payment of bonuses, the amount of which should correspond to the brought benefits to the company by a particular employee.
# 4 - Fresh Blood
This is a pretty tough way to “motivate”. Your managers should always feel that they are “breathing in the back of the head”. If they decide that they are irreplaceable employees, they will very quickly become lazy and stop working.
To create the necessary level of “awareness”, it is very useful to hold new competitions every two months to recruit sales managers. How to do this correctly, we examined in detail in the article "How to find a sales manager."
So, such a competition must be held even if you currently have an active sales department fully staffed, and you do not need new employees. And be sure to invite your sellers to them.
Let them look at the crowd of candidates who really want to take their place. After that, they will understand that your company is irreplaceable. And veterans need to plow no less than newcomers.
The effectiveness of intangible motivation
Intangible incentives for sellers include a number of activities and actions by management:
- organization of holidays, presentations, anniversaries, on which the merits of the hero of the occasion are celebrated,
- supporting the employee in a difficult life situation, assistance in case of illness of the employee or his close relative,
- improvement of working conditions, installation of new equipment, the presence of a special room for psychological relief,
- expensive gifts from the company,
- assistance in home improvement.
Non-standard forms of motivation cannot be described accurately, because they are different, unique, depending on how much ingenuity and imagination the manager has. But you can name already used in practice:
- giving gifts for high sales figures that are irregular in order to create intrigue,
- Congratulation of an employee on an anniversary or other significant date without warning in the form of a surprise,
- introducing an intelligent employee to solving more complex problems so that he feels trust and recognition of his merits.
If you correctly motivate employees to fulfill the sales plan, they will quickly achieve significant results.
Key performance indicators are nothing more than indicators that determine the level of employee performance. They are used in the development of a motivating system, in particular for sales managers.
Kipiay indicators can reflect the result of work, its productivity, functioning (activity of the manager's work), level of effectiveness.
A comprehensive sales indicator includes:
- total sales volume and private sales volume, for any particular commodity position,
- number of sales per month,
- percentage of margin (profit) in the transaction,
- customer circle
- average check
- percentage of repeat sales to the total number of transactions,
- the ratio of the number of visitors to the number of people who made a purchase (new customers).
KPI is a convenient tool that significantly facilitates the achievement of the main goal - increasing sales.
Sales Motivation: Improving Methods
The head of the sales department must closely monitor the behavior and activity of sellers. As soon as the mood decline becomes noticeable, it is necessary to revise the applied types of motivation and, if possible, improve them, as well as try new Western or Russian methods with an understandable step-by-step action plan.
What is the essence of the Soft Balance method - Soft Control
- Setting goals and determining the area of responsibility. A great way to delegate authority and non-material motivation of employees. We set an understandable and specific goal, if required, determine the deadline for completion, outline the area of responsibility and do the decomposition (we break the large goal into small sub-goals).
For example, the motivation of an event manager can be built as follows: The goal is to conduct training for sales staff in the field of CPA and LTV 10/28/2017. Responsibility - organization of the event on time at the proper level with a budget of 120 thousand rubles. Decomposition: search for business coaches, booking a room for an event, notifying sales staff, preparing and buying the necessary materials, organizing coffee breaks, preparing a financial report on the work done and the use of company funds.
- Strict rules for achieving key indicators. They are used to control employees and the possibility of imposing penalties in case of failure to comply with certain standards. For example, the key indicators for the sales department can be: lateness, departure from the workplace earlier than the regulated work schedule, failure to fulfill the sales plan in general or specific product items in particular, a low conversion percentage when placing orders from targeted traffic sources, etc.
- Free work schedule. Bonus for decent and motivated employees who do not directly participate in customer service. The main implementation factor is the quality performance of work on time.
- Love and honor for the best results and employees. In our work, we cultivate in various ways and strive to support the desire of employees to ensure the highest quality of work performed. Our main goal is for all employees to learn about such examples of work. After each excellent result is achieved, a special newsletter is provided, and at the end of the month there is a digest where you can see happy photographs of colleagues when giving gifts. For companies with few employees, a salary rating or public praise will work just as well.
Associative logo of the Soft Balance method - Soft Control
Method for creating the perfect atmosphere in the department
You can achieve an almost perfect atmosphere in any team, but not all leaders manage to maintain a positive attitude for a long time. To help them - the following methods:
- organization of meetings with the team. During the performance of some tasks, it is advisable not to focus on defects, but to discuss issues that are painful for the employees themselves. Identify the problem points in the motivation system. It may be necessary to slightly reduce the pressure on the team: this will raise his mood, and employees will have a desire to improve performance. During the conversation, you should find out what stimulates them more - monetary reward or moral encouragement, and this should be done on an individual basis,
- The holding of trainings. The best seller can be appointed as a coach. This will exchange experience, which will also contribute to the cohesion of the team. For such events, invite successful sellers from other companies who will hold a master class. You can also use the mentoring method when an experienced worker helps young employees cope with problematic issues. This will be an effective lever for raising the team spirit and improving the moral and psychological climate in the department,
- creativity - do not spare funds for the introduction of new tools. The management system should work efficiently, so you need to review your methodology and find out if it is used correctly. To implement new tools, you should choose the time of work with the least load.
How to develop a motivating strategy method
If the situation in the company is far from ideal, an integrated approach to solving the problem is needed. Here the method of motivating strategy will help, the implementation algorithm of which is given below:
- Adaptation of motivating schemes. It is necessary to develop a unique motivation for each employee, this will give a high effect and will positively affect the quality of work.
- Develop a flexible reward structure based on sales results. The level of commission should be regulated depending on the state of the market. If it is on the rise, the percentage of incentive payments should be increased, and when in decline - lower.
- Regular promotions. They can be daily, once a week and / or per month. Employees who have achieved the best results are offered gift cards, gym memberships, and free lunches. This will be an incentive for those who can’t cope with work and raise the spirit of healthy rivalry. Such regular bonuses contribute to the fulfillment and overfulfillment of sales standards. However, this must be done correctly and carefully so as not to provoke demotivation.
- Create individual goals. If the employee has a significant date, he or she can be offered a 1-2 bonus time off to prepare for the holiday in the form of a preliminary bonus. This will cause the employee positive emotions, and he will be “ready for the feats”, that is, for the successful completion of planned tasks,
- Team spirit motivation. The atmosphere in the department should be such that employees are ready to come to each other's help, support, suggest, share knowledge and experience.
- Recognition of labor results. Public recognition of the achievements of a particular employee has a high effect both for him and for his colleagues. Written acknowledgments sent by e-mail are also helpful. You can also introduce this employee to senior management, introduce him to the discussion of solving important strategic issues of the company.
The desire of everyone to strive for victory and high personal results noticeably raises the motivation of the whole team
As a leader to motivate employees to increase sales
To build a working system of managers' motivation, it is necessary to understand the priority tasks facing employees of the department:
- establishment of import supplies, search for additional suppliers,
- reference to the availability of luxury goods,
- Bet on increasing the number of sales through drawing up individual plans and attracting new customers,
- expanding the range of goods within the department,
- profit orientation
- correct pricing, flexible system of discounts.
When developing a motivation system, it is necessary to focus on the following activities:
- placement of posts in the sales department, contributing to a more expeditious solution of the tasks assigned to the group of managers,
- the specifics of the actions of each employee requiring motivation,
- focusing on the most significant areas of the department’s activities in order to motivate active work in this direction,
- the introduction of methods of material and non-material motivation for each employee.
Examples of motivational systems
The Olympiad system, developed by specialists of the Enter network, a leading company in the retail market of various non-food products, has achieved high popularity.
Enter company logo - a leader in the retail market of various non-food products
The principle of the system is unusual, it looks like a game. In the company's social network, on a special page, employees put earned points. After summing up, management accordingly encourages the employee.
The following programs work within this system:
- "Gold Rush" - sales departments conduct competitions between colleagues from other regions. The winning team receives not only a higher salary, but also an additional reward,
- recognition - monthly results are summarized, active sellers are awarded symbolic medals, they are given extra points,
- “Imago” - employees take the initiative, offer interesting forms of work and ways to solve the problems created in the team,
- A letter of gratitude for a good job is received not by the employee, but by members of his family,
- work without instruction - clear goals are formed and areas of responsibility are outlined. Employees independently choose methods for solving tasks.
Implementation of a matrix of key indicators
The created motivational model is implemented as follows:
- the management informs the team about the upcoming application of the motivation system,
- a portrait of the team is being studied (detailed data about each employee is collected),
- Using the experience of similar companies is welcome
- the interests and needs of employees of the sales department are identified through a survey.
For the model to work, we need transparency, accessibility and simplicity of the principles of motivation. The system should be understandable to people, and clarity in management intentions is also needed.
Recommendations that prevent demotivation
When developing an incentive system, the individual characteristics of each employee should be taken into account. There are times when the desired effect does not occur, no matter how hard the management tries to motivate its subordinates. Experts in this area recommend paying attention to the following shortcomings:
- perhaps an important point was missed in building the system, for example, the interests of employees were not taken into account,
- not all methods of motivation were selected, for example, only material ones. In the end, this can lead to the opposite effect,
- the department’s atmosphere is not entirely favorable and no measures have been taken in this regard,
- employees do not know anything about the true plans and tasks of the department, they are suspended from their solution,
- each of the managers is professional enough, but there is no team in the department.
Based on the shortcomings listed above, we can draw the appropriate conclusions in order to learn not from our own, but from the mistakes of others.
Video: how to motivate people to achieve extra achievements
By and large, motivation is necessary to awaken the employee’s desire to do his job efficiently, in full force, with interest. If we are talking about motivation in the field of sales, then we can not do without such leverage as demanding by the head of the department. Only with an integrated approach, taking into account the application of various methods of motivation and control of the management, it is possible to achieve the desired level of sales, which are directly related to the company's profit.
The size of the fixed part of the salary should provide the manager with a certain "foundation", and the bonus should stimulate the achievement of the company's goals.
Business coach Vadim Dozortsev I am sure that the fixed part must be present and in no case should depend on the implementation of the sales plan, since the manager receives this amount for the fact that he has performed managerial functions.
Vadim Dozortsev, an expert in sales management, on his blog:
- The specifics of the business affects the ratio of the constant and variable parts. In industries with a long sales cycle, it is better to build this ratio 50/50. In a business with a traditional cycle, the fix should be higher, and the premium should be 20-30% of the profit.
Bonuses for fulfilling and overfulfilling a sales plan
Konstantin Baksht, the director of the consulting company for the construction of sales departments is sure that the main goal of ROP should be the implementation of the company's sales plan. Hence, his personal bonus on the amount of the plan must be the strongest motivation.
А чтобы стимулировать РОПа не только на выполнение плана, но и его перевыполнение, бонус можно поделить на 2 части, и за перевыполнение выплачивать большую сумму. К примеру, мотивация руководителя отдела продаж может быть такой:
- план выполнен на 100% — бонус 20%
- от 120% и выше — бонус 30%
Надбавка за стабильность выполнения плана
Ее выплачивают РОПу не как получится, а только если отдел продаж выполнял план 2 месяца подряд и более. To make the method effective and truly motivating, Konstantin Baksht advises breaking the bonus amount into 2 parts:
- bonus for the implementation of the department’s plan in the current month - should not be very large,
- The bonus for keeping this plan for the second month in a row should be more so that it would be interesting for ROP to work for it.
Konstantin Baksht, Director of Baksht Consulting Group, on his blog:
- Suppose we set a stability bonus of 40,000 rubles for the implementation of the plan for two consecutive months. Then the bonus for fulfilling the plan is estimated at 30,000 rubles. It turns out that if the sales department does not fulfill the plan this month, then the ROP will receive less than 30,000 + 40,000 rubles. Also, he will not receive 40,000 rubles in the next month, even if the plan is implemented. Such a forecast of losses should well motivate ROP to increase sales.
# 5 - Position
A sales manager is a rather interesting position in any company. On the one hand, they always come from scratch and do not have any qualifications. And on the other hand, it is the sales manager who can grow to almost any position. Including to the co-owner of the company.
Of course, it is possible to motivate sellers with long-term prospects for promotion. But it’s better to show them something more real. For example, the opportunity to take the place of commercial director or ROP (head of sales).
Yes, it will be a very big mistake to hire a commercial director or ROP from the outside - experienced, skilled, with an excellent track record. Here he comes so, immediately to a high salary and with power. And the sellers do not know him. They didn’t smell gunpowder with him.
Then another mistake is added - the ROP sits all day in the office and only yells at ordinary sellers so that they try better. If you organize everything this way, this will be the beginning of the end of your sales team.
Salesmen are wolves, and they live according to wolf laws. You can give the new ROP any amount of authority. But they will respect and obey only the very toothy “wolf” - that is, the best seller.
Therefore, be sure to choose a commercial director and ROP from ordinary sellers. In addition, you can remove them from their posts and appoint others. So you will constantly motivate both those and others.
# 6 - Board with a sales plan
A large board should hang in your office on which the names of all managers and the level of the plan that they have completed to date will be written. In this case, the plan should be real and specific:
- How many cold calls do you need to make an appointment?
- How many meetings do you need to make one deal?
- How many deals do you need to complete to complete your monthly sales plan?
All these indicators should be indicated opposite the names of sellers so that they are seen by everyone. The weakest seller at the end of the month either receives a “yellow card” and a month for correction. Or gets "red" and quits.
What does it have to be fired publicly so that everyone can see and hear it. Otherwise, then this manager will talk to your former colleagues about your insult, which can easily undermine your authority and all their motivation.
Therefore, you need to fire quickly - this is the law. And immediately from the office “under escort” we take him out of the office so that he does not have time to merge the database or somehow harm it. I say wolves.
# 7 - challenge prize
This is not about any gilded tin in the form of a cup, which you will put on the table to the best sales manager every month. A couple of times, such a “prize” can make managers work better due to the novelty effect. But then all the same, everything will come to naught. The prize should cause a desire to fight for it.
If funds allow - buy a corporate car of some prestigious brand. According to the results of work for a month, the best manager will receive this car for personal use.
So you can motivate them for a very long time, generally with virtually no cost. Only a car should be truly prestigious so that sellers feel admired and envious glances when they get out of it.
I tried to choose the most interesting options. without trivialities like “photos of the best employee on the wall”. But this does not mean that the "banality" does not work.
Let’s now summarize all seven ways to motivate sales managers.
- Simple salary formula. Each manager should be able to quickly calculate in his mind how much he earned and how much his colleague.
- Contests. Conduct training and certification every month. Based on your exam results, award cash prizes.
- Discipline with the "ruble." Penalize those who are late for morning meetings. The money accumulated in this way at the end of the month can be “drunk” together to strengthen the team spirit.
- Fresh blood. Once every two months, hold contests to recruit new sales managers, even if you don't need them yet. So employees will feel that they are “breathing in the back of the head”.
- Position. Choose a ROP and Commercial Director from among your salespeople. Then you can dismiss those who did not manage and appoint new ones.
- A blackboard with a sales plan.
- Challenge prize. Come up with some valuable prize that sales managers want to fight for. For example, a car of a prestigious brand. According to the results of work for a month, give a prize to the best seller for personal use.
I hope this article has been helpful to you. Do not forget to download my book "Hitchhiking to a million." There I show you the fastest way from zero to the first million on the Internet (squeezing from personal experience in 10 years =)
Personal sales and development of KPI for ROP
To managers listened to the leader, he should be an example for them: close deals with high conversion, solve non-standard situations, work with VIP-clients, etc. So that he does not lose these skills and periodically demonstrates them to his subordinates, personal sales must be included in the list of his personal KPIs. But the bonus for personal sales should not be high, otherwise ROP will simply forget about its team and lose interest in management.
Mikhail Grafsky, B2B Business Coach, for Clientbridge Blog:
- ROP should help sell to its employees. He needs to be near them in order to analyze the activity and quality of work of his staff. And if the head instead will engage in his personal sales, the work of managers will remain without control.
The Zapusti.biz portal writes what requirements should meet KPI leader:
- the target is in exact numbers,
- no more than 5-7 goals,
- the plan must be achievable
- the proportion of personal indicators is not more than 10% of the total plan,
- KPI should be aimed at achieving the goals of the company.
Deductions and Fines
Withholding part of the earned amount, business owners apply to eliminate permanent shortcomings. Vadim Dozortsev gave examples, for which it’s worth it to fine the head of the sales department:
- Report errors
- concealment of management problems.
But first you need to find out the cause of these problems and apply retention only if the ROP did it on purpose. If he simply does not have enough managerial knowledge, then it will be more useful to send him for training.
When you made a report for a long time, and you are fined for incorrect calculations
How to control the head of sales, so as not to kill his motivation
In order for the head of sales department’s motivation system to work, ROP must understand what results are required of him, as well as see what indicators he met in the current month, and which are not, and what bonus has been accrued. Otherwise, confusion may arise, and the head of the sales department will lose part of the honestly earned money, which means you will lose his loyalty. Transparent and clear accrual of bonuses is possible in a correctly configured CRM-system.
You can set KPI and in a couple of clicks, generate any reports in order to track the results of the sales department and personal results of the ROP, right in it. How to do this correctly, consider the example of the cloud service SalesapCRM.
The director of the company sets personal goals in the system for the head of the sales department depending on his KPI and sees online how many percent he has fulfilled and how much he has left before the deadline.
This is what a window looks like with an employee’s personal goals in SalesapCRM
Most importantly, both the director and the ROP himself see all this data. Therefore, no one will have questions about accruing bonuses. How toimplement KPIand motivate employees to perform performance read on our blog.
Author: Irina Isendimirova
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