Ditch Depletion Incentives for Sales Reps!?!? Why You Should Focus on Leading Indicators
In my years as a supplier sales manager for some of the biggest suppliers out there (as well as a start–up that went from 0 to 60 pretty quickly) I learned first-hand about the realities of sales rep behavior. The fact is, the best sales people are driven by money. This is a good thing. You want a high level of performance, and hungry reps will work hard to achieve goals that earn them pay. Dangle the carrot, and they will do what it takes to grab it. The problem lies with managing such “talent” such that they do exactly what you wish. Most reps will take the path of least resistance to achieve their goal. This is also a good thing. No wasted time or energy! But if management doesn’t give them the right goals, they may be dissatisfied with the results.
Take depletion goals for example. Deplete ‘X’ number of cases of Brand ‘A’ during time period ‘Y’ seems like a S.M.A.R.T. goal. It’s specific, measurable, achievable, relevant and time bound. In fact, its the way most supplier sales goals are written. So why aren’t brand owners and executives always happy when the numbers come in? The reason is because the way the numbers were made was not sustainable. It eroded profit and did nothing to increase the long term health of the brand. If these 3 boxes can’t be checked, then the goal is a failure in my mind.
The right way to goal sales reps is to focus on the leading indicators of success. Incentivize the behaviors and activities that are your brand’s strategic sales drivers, rather than the lagging indicator of number of cases sold. This ensures the cases are sold in the right way.
Some may argue that sales reps won’t respond to this type of goal and incentive program; but don’t worry. Good sales people will work hard to achieve their goals, even if they aren’t volume based. If a rep expresses displeasure at being asked to achieve these qualitative goals, it can be indicative of a poor work ethic and help to isolate poor performers on your team. With the proper strategies, tools and processes in place, sales will execute these activities, the brands will sell through and the volume will come. The numbers do not lie!
As a young rep and market manager, I made lots of great bonuses and cashed in on incentives that were volume based. It wasn’t until I was given responsibility for not just the immediate results, but the longer term success of a company, that I developed an appreciation for the right way to sell cases. Keep rewarding your sales people. Just don’t be afraid to focus those goals and incentives on the leading indicators!
