Motivating Sales People

Copyright © 2010 Jim Stringer. All rights reserved.

"Why can't I find a sales person that can deliver?"

"Those sales people are just lazy con artists. They convince me they can sell. I hire them. Then they produce nothing"

"Motivational contest for the month: 1st place...You get to keep your job"

"I offer uncapped income potential through a huge commission % and they still can't sell."

"I don't pay sales people unless they produce."

"Why do my sales people complain about needing marketing materials and sales tools? Isn't that part of what I am paying THEM to do? If they are as good as they say, they should be able to sell with their charm and good looks alone."

"What is the sales department budget? 0! Sales people need to pay for themselves!"

"I only hire sales people with a book of business/contacts they can call on"

If you agree with any of these statements, maybe YOU are the problem!!!

The Fisherman

There once was a great fisherman named Ned. Over the years Ned had earned a reputation through winning competitions all over the world. He was considered a master angler able to locate and catch almost any kind of fish known to man.

After years of tournaments, being a guide, and teaching others to fish, Ned needed a change. A normal quiet job (still in the fishing industry) sounded like a nice break.

One day the perfect opportunity presented itself. He found a small fish market looking to hire someone to transport fish from the dock to the market. The owner needed a full basket of fish every day and was willing to pay $5 per fish.

The owner sells fish from $10-$30 per fish pending on what kind it is.

The best part was that every morning, there was a full basket of fish brought in from a local non-profit fishing group. The types of fish varied, but Ned didn't have to worry about that. His pay was still $5 per fish. So, every day he went to the dock, picked up the basket of fish and delivered it to the market. The owner would count the fish and pay him accordingly, and Ned would have the rest of the day to do as he pleased. He even had time to make some extra cash on the side as a guide if he felt inspired to do so. Life was good.

Note: (Here is how the numbers work)

A basket holds about 50 fish.
At $5 per fish, Ned makes $250 per day.
Minus 30% for taxes, still gives him $175 per day.
At $10-$30 per fish, the owner could gross $500-$1500 per basket. With only a $250 pay out, he was making a great profit off of Ned.

This went on for a month until one day something happened. The non-profit company leaving the fish for the market decided to donate half of the catch to the homeless. This only left half a basket for the market. So, Ned took the half basket to market and explained to the owner that this was all there was. The owner didn't seem overly concerned. He counted the fish and paid accordingly. Which was only half what was normal.

The next 10 days in a row, the same thing happened. This was now becoming a problem. Ned was only making half as much, and the owner was starting to complain that he wanted full baskets. He told Ned "I need you to go find a way to fill the rest of this basket each day. I hired you because of your claims to being a fishing expert, ability to catch fish when nobody else can, and the long term benefit of you being able to train new people to do the same if we grow big enough to have a need to hire more fisherman. So, I am putting this in your hands. Go prove yourself.

I will make this worth your effort by not putting a limit on how much money you can make. You can bring me as many fish as you catch and I will pay for every one of them.

This sounded great. No cap on his income, and he starts each day with half a basket. Unfortunately, also that same day, he found out that the non-profit was no longer donating fish to the market. So, he was going to have to do this all on his own. There wasn't even a half basket guarantee anymore.

Fresh start: (New day. New responsibilities and possibilities.)

Day 1: Wicked storm makes it impossible to fish off the dock. (No fish. No pay)

Day 2: Found sign on dock "catch and release area only" (No fish. No pay)

Day 3: Ned decides to have a meeting with the owner to discus the need for a company boat, gas, bait, fishing poles and a depth finder. He has most of this, but why should he have to wear out his stuff to build someone else's company?

Note: Because he is an expert fisherman, he knows exactly what to do to bring the owner more money. He presents options to the owner based on what he knows he is capable of doing if he is given the tools he needs.

This is the idea he shares with the boss: (2 ways we can approach it)

#1. Go after the fish that sell for $30. They are a little harder to catch and require more time and gas because they are out in deeper water. However, I know I can average 30-50 of this type per day. At $30 per fish, you make $900-$1500 gross.

#2. Go after the ones that sell for $10. They are easier and closer in so they cost less to go after but require 3 times as many fish to make the same profit. I know I can average 50-70 of this type per day. At $10 per fish you only make $500- $700 gross, but with less overhead.

Ned's conclusion: I could make you more money by going for the better fish if you are willing to spend a bit more on gas and give me a pay plan worth doing it. After all, I am no longer picking baskets up off the dock. I am now spending the entire day utilizing a skill that few others have on my level.

If the boss liked this proposal, it actually sounded very inspiring to Ned. It would allow him to be more engaged in the growth of the business, and he would feel more like a partner then just a worker. It was exciting to present and he was anxious to hear what the owner thought.

Unfortunately, the owner responded with "I simply don't have the budget for any of that. In fact, you should be willing to provide your own equipment. This is a paid for performance position. I don't pay if you don't produce. The fishing department needs to pay for itself based on what you bring in. The reason I offer you the uncapped commission structure is so you can make enough money to off set your costs. I know you claim that with the proper pay and equipment you will bring me a huge ROI.

I know you have documented proof you have done it elsewhere. However, I need you to prove it to me before I invest in you. So, it's up to you. The best part is that I'm not holding you back. Whether you fail or succeed, you are in control. It's completely in your hands."

After Ned leaves the meeting, the owner thinks to himself "Wow. I'm such a great leader. My tactics are genius. I challenged his ego a bit and then inspired him by allowing him to make unlimited money based on his performance. I'm quite the motivator."

Day 4: (Reality) Ned puts $75 worth of gas in his boat, buys $25 worth of live bait, and sets off to go fishing feeling lower than whale s***. He is now investing in his J.O.B. as if he were a partner but is being looked at as less then an employee. He has no salary, no benefits, and he now feels used and taken advantage of by the owner. (Opposite of what the owner thinks about the results of his leadership/motivational speech)

He decides to play it safe by fishing the easy stuff. After all, he gets paid the same for the $10 fish as the $30 ones. Why spend more to catch and make less. So, he catches a full basket of $10 fish. Which, again, is around 50 fish.

He calculates his day:

$5 each gives him $250.
He puts 30% away for taxes which leaves him with $175.
However, He now has to account for the $100 he spent on gas and bait.
He is left with $75 profit.

Day 5: Ned struggles to get out of bed to go fishing. He has no inspiration at all. He invests his $100 in gas and bait and sets out to go after the small stuff again. This time, however, he seems distracted. He spends a lot of time thinking about how he could convince the owner to share some costs and let him do it right. By the end of the day, he notices that his lack of motivation has lead to a lack of focus on fishing, which has lead to half a basket instead of a full one.

He calculates his day:

25 fish times $5 is $125.
30% to taxes leaves him $87.50.
He spent $100 on gas and bait.
He looses $12.40.

By the time he reaches the market, he is furious. He is about to give the owner an earful. Luckily the owner is gone for the day so an assistant counts the fish and pays him. The reason he was lucky the owner was gone is that he would have left the market without a job that day. When he got home, he opened his bills and realized that if he didn't start making money immediately he would loose his boat and his house. To stay current, he needed to make the same profit he did when he started. "At least I still have a job."

Conundrum: (The trap)

"I have to catch just over a basket and a half to equal the same money I was making at the beginning due to my new overhead. This means I am going to have to be on top of my game and focus on fishing hard every day.

Day 6: Ned jumps out of bed early and is ready to go. The problem is that it isn't out of inspiration today. Instead, it's desperation. As he hits the door, the phone rings. It's the owner. He says to Ned "I noticed that the first day you brought a full basket, but it was all $10 fish. That is o.k. but it really won't help me grow. What I'm concerned about is that on the second day you brought half a basket of $10 fish. This is simply unacceptable. I can't make a big enough profit on a half basket of $10 fish to justify keeping you. So, I suggest you either bring 2 baskets per day of the $10 fish, or go catch 1 basket of $30 fish. To motivate you, I'll pay $1 more per fish if you go after the $30 fish. If you are as good as you claim, you should be able to bring just as many $30 fish as $10 fish anyway. So, there is a little perk for ya."

As the owner hung up the phone, he felt great. "I'm a genius" He thought that his little speech must of sent Ned out the door motivated like never before. After all, he just offered him a raise. Also, if the baskets are all $30 fish, he will make twice as much off of Ned then at the start.

On the other end, instead of hanging up the phone, Ned sent it through the air and into the wall. Shattering it in pieces. He walked out the door kicking over everything in sight. He stormed down to his boat and put $125 of gas in it this time. "I'll show him. I'm going to go get a basket of $30 fish just this once to shut him up and prove to him I can do it."

As the day went on his anger grew. He couldn't concentrate on fishing. In the end, he only caught half a basket. When he brought it to market, the owner said "Well, it's only half a basket, but it's $30 fish. So, this is more expectable. Also, I think this is a good learning experience for you. I bet by the end of the week, you will be bringing me full baskets or more. That extra dollar per fish will start to ad up soon."

Ned was so defeated, he didn't even have the energy to argue. The owner was, again, extremely pleased with his motivational skills. He was able to inspire Ned to go after the better catch. "I should do motivational seminars" he thought.

On the way home, Ned started calculating his loss:

25 fish at $6 each is $150.
30% tax leaves $105.
He spent $150 on gas and bait,
It cost him $45 to go to work today.

Not only did he loose money, it seems he proved nothing to the boss. In fact, he thinks he is a rooky with things to learn about fishing.

"This was a good learning experience. I bet you will catch full baskets by the end of the week?" This is the most insulting thing that has ever been said to him.

Day 7: Ned wakes up late with a hang over. He decides to call in and quit. However, his phone is broken. So, he goes down to the market to do it face to face. On the way he contemplates how he will put the owner in his place. He decides, however, that it is better to be polite, professional and not burn any bridges. So, he resigns peacefully.

As Ned leaves, the owner thinks to himself :

"Why can't I find a fisherman that can deliver?"

"Those fisherman are just lazy con artists. They convince me they can fish. I hire them. Then they catch nothing"

"My motivation was perfect and easy to understand. Catch fish. Keep your job"

"I offer uncapped income potential through a huge commission structure and they still can't catch fish."

"I don't pay fisherman unless they produce."

"I'll go find someone willing to do it for $4 per fish. Boy, those fisherman are a real headache to deal with. They have no appreciation for the opportunity I'm offering them"

Moral of the story:

Give a business owner a basket of fish, and he will make a profit for a day. Give a business owner a master fisherman, and he will loose both the basket of fish and the fisherman through poor leadership and motivation skills.