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CompensationMaster Newsletter Article, October 2008 We are
watching the biggest redistribution of wealth in the history of mankind.
As business owners, it is up to us to decide what role we play.
Are we going to come out on top? Or are we going to be one of the victims?
At CompensationMaster, we have a unique view into the industry –
we work with firms around the world, helping them restructure their businesses
and design (and implement) new commission structures that ensure financial
stability. We know how thin profit margins are for most companies. And we know
how hard business owners are working to keep their firms afloat.
It is deeply troubling to see so many businesses going under, being bought for
almost nothing – sometimes just 20 cents on the dollar – seeing dreams and
livelihoods disappear overnight.
But we are also seeing companies that are succeeding, despite the market.
Companies that are buying up other firms, recruiting top producers away from
weaker competitors – companies that are growing rapidly.
Here's what you can do to copy those companies…
Let go of entitlements
If you are giving your sales force splits that are not justified, you need to
stop. It is a mistake to give sales people a higher commission just because they
have been with the company for a long time, when their production does not
justify that split. They might be the nicest people in the world, but as much as
we all would sometimes like to, we cannot run a business by giving more to
people just because we like them.
Stop driving from the top - listen to your sales force
You need to figure out who you are in this new environment. Ask your sales
people what they want and listen to what they are telling you. Then take action,
even if it is painful.
Get rid of bricks and mortar
We are seeing companies around the world let go of bricks and mortar. You still
need storefronts, but do you need all of them? Walk through the offices in each
of your branches. How many people are there? Almost every company can get by
with significantly less space than they have. And since this is probably your
biggest expense after commissions, this is a perfect place to look for savings.
Time and time again when we restructure a company, we are seeing that it makes
sense to close branches and create drop-in centers where sales staff have
flex-based desks. Since so many people work from home now, this works for them.
Consolidate administrative staff – use technology
Creating support centers lets you centralize your administrative staff. Then you
can use technology to provide better service to your sales people and clients at
a lower cost.
For example, we are seeing companies provide high-tech touch screens in their
storefronts. Clients can touch the screen, push a button, or make a call to
reach a call center that immediately sends them information and notifies the
appropriate sales person instantly via their Blackberry. Sales people love this
and it costs less than you would expect.
Recruit aggressively
Sales representatives are looking for companies that can provide the opportunity
to earn a living. If you can cut costs by reducing the amount you spend on
things the sales force doesn't value, you can turn that savings into increased
commissions, making you much more competitive in your market.
Top producers are looking for stability – like everyone else. Make your business
the one in your market that delivers what they want, and this will turn into the
best opportunity to recruit that you have ever seen.
Change is necessary
Very few people embrace change. It is always going to be easier to try to hold
on to things as they are, and hope the green pasture days come back soon. But
the companies that are going to find the greenest pastures are the ones who leap
into this new environment with both feet.
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