Are you too good as NUMBER ONE in sales?

Nine reasons you may lose your job.

Part II

 

Last week we examined six telltales that indicate why you may be too good as number one in sales.  Some of these changes might be creeping into your office culture right now.  It’s a good time to start paying closer attention to things going on around you at work.

Here are several more telltales, maybe the biggest and most important:

 

Are you too good as number one in sales?

 

# 7) You Can’t Make Too Much Money

 

You currently work in, or your company is about to change to, a sales “salary” structure.

Merriam-Webster online defines “salary” simply as, “fixed compensation paid regularly for services.” The operative term here is “fixed compensation.”

Let me get this straight.  You sell $1 million of revenue one month but only $10,000 the next.  But you’re paid the same amount each month as “fixed compensation paid regularly for services”?  Really?  Where does this exist?

The use of the term “Sales Representative Salary” is an oxymoron. It’s inaccurate.  The idea of salaried salespeople sends a shiver up my spine.

The entire concept gives the feeling of being gently nudged into a box of mediocrity and conformity.  The “everyone else does it that way” sheeple mentality makes me shudder.

Sales is not a punch-the-time-clock job compensated by a salary. It’s a job compensated by opportunity.  That’s one big reason most of us go into sales.  It provides the opportunity for us to create our own opportunities.

 

SINOs

 

Some car dealerships advertise that their sales staff is not compensated based on commissions.  There aren’t any other sales positions paid a flat “salary” that I know of.  (“fixed compensation paid regularly for services.”)

But I could be wrong.  If there are any, they’re Sales in Name Only – SINOs.

 

Fire Yourself!

 

This section is not about you getting fired.  This is about you – firing yourself.

Let’s examine that car dealership that features a non-commissioned sales staff.  There is no better place to look for reference on car sales than Edmunds, Inc./Edmunds.com.

Edmunds is a respected authority in the area of auto sales for over 50 years.

Senior Editor Matt Jones writes for Edmunds with a 12-year track record in automotive sales.  He’s been a car salesman, internet sales manager, and finance and insurance manager.  In 2014 he penned the article, Saying Goodbye to Commission Based Car Salespeople.

 

This car sales expert writes:

 

A growing number of car dealerships have moved away from paying their salespeople profit-based commission.

 

Traditional sales commissions are calculated as a percentage of the profit from a sale. The more money a car dealership makes on the sale, the more the salesperson earns.

 

But the cost of hiring and training salespeople has run smack into another issue: profit on new cars and trucks has been in decline…according to the National Automobile Dealers Association (NADA).

 

With lower profit margins on new car sales come smaller commissions. Salespeople often earn just a ‘mini’—industry slang for minimum commission—of $50 to $150 on each car sold. Given that the average salesperson sells 10 cars per month, that adds up to a meager income.

 

If minis are all they’re making, a commissioned salesperson may decide the grass is greener elsewhere.

 

There you have it.  This looks like another great idea on paper that doesn’t work out.  Why?  They choose to ignore the human element.

 

High achievers will not stay where they cannot achieve. They will go wherever they must to meet their achievement needs.
Law of the Hired Gun

 

The problem with non-commissioned sales is there’s not enough compensation to retain true top-level talent.

When excellent sales reps can’t make any money they move on.  This leaves behind the mediocre reps.  The order takers stay on.  The B-Team abides.

 

Are you too good as number one in sales?

Are you too good as number one in sales? The A-TEAM often gets replaced by the B-Team for less compensation.

 

The A-Team leaves.  The B-Team takes over.  Now profits are lower because there are no top-tier sales reps selling higher profit margins on the cars.

So now you’ve got a mediocre dealership staffed with a bunch of mediocre sales reps who make mediocre pay.

I’ll tell you this truth.  Hired Gun-quality sales reps aren’t going to hang around a mediocre environment.  There isn’t any money in it.  And it’s dull.

 

Are you too good as number one in sales?

 

Allow me to refer to one legendary football coach talking to another.  Darrell Royal gave valuable advice to Mack Brown when Brown was head coach at Tulane University in 1985.  It went this way, according to Brian Sweany’s account titled, Horns Aplenty in the August 2002 issue of Texas Monthly :

 

That winter, a group of consultants evaluated the (Tulane University) program’s situation, and Royal happened to be a member of that committee. According to Brown, Royal gave him some candid advice about the school: “I’d get the hell out of here as fast as I could because you’ve got no chance,” he said. “And I would go to a university that has ’the’ in front of it, because that’s the only way you’re going to make it.”

 

I suggest something similar to you if you’re in a situation of stagnation.  Get out of there as fast as you can, because you’ve got no chance of making any money.  Go to a new, emerging company forming a new sales team.  Find as aggressive a commission schedule as you can find.

Make sure it’s a real company, with real financial backing.

 

Are you too good as number one in sales?

 

# 8)  Your company is about to be sold               or has recently been acquired

 

If you’re about to be sold …

 

You’ve probably been in your same position about five years

 

You probably came in at or near the Genesis of your company’s sales growth if this is the case.  I’ll bet cash American money you’ve enjoyed a good ride on the way up.

But now you begin to pick up signals that don’t make any sense.  Some of the more flagrant ones were cited last week, and above.  It begs the question, “Why are they suddenly doing these things?”

You don’t have time to delve too deeply into the circumstances behind these changes.  You don’t have control over them anyway, and besides, you’re a professional.

Sales results are your Job One.  So your primary focus is on the things you do control:  your prospects, your sales, that next deal. That’s why you’re so successful.

 

It’s also why you might get shot

 

Your company’s impending sale is signaled by
a sudden increase in new and more frequent:

meetings – to pressure more sales
reports – to pressure more sales
forecasts – to pressure more sales
pipeline reviews – to pressure more sales
check-in calls – to pressure more sales
role-playing sessions – to pressure more sales

 

A company positioning itself for sale does anything to pressure more sales. It needs to dress up the company’s appearance from the outside to attract suitors.

“We need to put on our best gown for our corporate debutante coming out ball!”

 

Are you too good as number one in sales?

Are you too good as number one in sales? Keep an eye on your company’s new debutante look!

 

A company positioning itself to be sold increases its dowry to attract suitors.  One way is to show more revenue on the bottom line by firing top-earning commissioned staff.

 

Suddenly, you’re fired

 

You’re replaced with a recently hired rookie.  This newbie is happy to receive management’s handout of your accounts and your territory.

This substantially discounted new-hire pay plan looks great on the bottom line of the balance sheet.  There’s significant difference between your bad old commissions and the newbie’s cool new miniscule commissions.

This difference translates directly to the bottom line as newfound revenue to the house.

This tactic really adds up to yield noticeable bottom line results when your sales team loses its #1, but then also #2, #3, #4 and so on… It’s a corporate Nacht der langen Messer.

 

Private equity firms typically own a company for about five years before selling their investment for profit.
Law of the Hired Gun

 

If your company has recently been acquired …

 

Your fate depends on which side of the sale equation you’re on.

If you’re part of the acquiring company, you’re in good shape.  You’ll probably receive new accounts when your company starts laying off the previous sales staff.

If you’re part of the company being acquired, get your resume updated.  You’re going to get whacked.  It’s just a matter of time.

Your accounts will get handed over to the acquiring company’s sales team. They just have to learn about your accounts and revenue streams, first.

Don’t listen to the acquiring company’s assurances that everything will remain the same.   Every time an acquisition occurs those words are said.  Very rarely are they honored.

In September 2007, the Harvard Business Review published The Strategic Secret of Private Equity, by Felix Barber and Michael Gould.   With respect to private equity firms acquiring companies in order to make higher profits, the principle message is this:

…once the changes necessary to achieve the uplift in value have been made—usually over a period of two to six years—it makes sense for the owner to sell the business and move on to new opportunities.

 

Vulture Capitalists

 

But it could be worse.  How much worse?  Your company’s higher ups have climbed into bed with a vulture capital group.  In that case, this length of tenure will most likely be less than a private equity firm’s five year plan.

Vulture capitalists don’t worry about a “period of two to six years”.  They will make a fast buck as quickly as they can.

I can tell stories …

 

Here’s what likely happens if you’re acquired:

1 – Your company’s new owners allow a certain grace period.
They let the acquisition dust settle.

2 – They learn what they can about your accounts and revenue streams.

3 – A corporate Nacht der langen Messer removes your top producers.

4 – The house takes over those good old “high” commissions.

5 – New replacements are hired at a much lower pay rate.

6 – Non threatening mediocre performers are left alone.

 

Are you too good as number one in sales?

 

# 9) You’re Offered a “Promotion”

 

This good one is a sly ploy to control the income of a successful sales rep.  The Suits tell you they want to reward your exceptional work with an offer to move into a management position.  This is a demotion in disguise.

 

The Good: 

 

You’re tempted with a sexy new title and administrative support.  The base compensation is higher than the one you currently receive in sales.

 

The Bad:  

 

All your accounts and attached commissions must be turned over to the house for reassignment.  You:

no longer enjoy the freedoms that sales provides
relinquish contact with the outside world – it’s internal politics now
are stuck in a Boof excuse for an “office” all day every day
attend and lead a lot of meetings
do a lot of work with spreadsheets
make a lot less total income

 

The Ugly: 

 

You’re branded as “not being a team player” if you register the slightest displeasure at this concept.

(HG Note:) Excuse me, but when the bill collectors call, I’ve never seen The Team show up to pay them.

This happened to me a couple of times at the same company. I turned down the first offer, and the company accused me of “not being a team player.”  The link above connects to a February 27, 2019 article on the G2 Learning Hub by Derek Doeing in which he states:

According to a 2017 Management Recruiters International study, the most common reason that candidates rejected a job offer was due to a disappointing compensation package.

A couple years later I accepted the second offer at the same company.  But this time I secured a signed written agreement:

  • The manager’s base pay.
  • The percentage override on the gross sales revenue of my sales team.
  • The full standard sales commissions on my two largest accounts

 

Never accept more job responsibility
without a raise.
Law of the Hired Gun

 

At another company I was the #1 revenue producing rep three years in a row, among 300 total reps.  I was asked to leave my #1 sales position I built over four years.

New management wanted me to serve as the lead steer on a “Dream Team” of top reps for a new sales division.

It was pretty quick math.  Leave a $360,000 job I built (2020 money) for a $70,000 position that might work out.  I said I’d consider it.

Our EVP told me I might be fired if I refused.

I declined the position.

And got fired.

 

‘Nuff Said

 

“If you are really thankful, what do you do?  You share.”
W. Clement Stone

 

Please SHARE with your colleagues and friends

 

NEXT WEEK’s Gonzo Selling!

What to do when you get FIRED in sales

 

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 Email: Robert Danger Workman

 

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“Keep those cards and letters coming. Jeannie and I just love ’em!” (Dean Martin) Robert answers every email.

 

LINKS:

 

Coming Soon:  HIRED GUN III

 

Robert Danger Workman writes from his consistent track record of top-tier success in both outside and inside sales at different companies, in different industries, as a sales rep, sales manager, EVP, entrepreneur and owner of several companies.  Four decades of in-the-field, face-to-face selling and leading winning sales organizations provides the background and experience prevalent in his HIRED GUN brand such as the best-selling and award winning book, HIRED GUN – You’re #1 and Somebody Hates it, and the new, HIRED GUN II – The Essential Guide for Top Salespeople.

 

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