One of the interesting things we've discovered over the years is when we buy our local competition we realize we didn't have as much business from some customers as we assumed. Turns out, the acquired company had far more business than we thought— with different contacts, projects and expectations. We weren't as deep and wide as we thought.
As far as compensation, our reps generally get a higher percentage for new accounts— but it can vary based on quoted prices. Our color reps do not generally have a sliding scale but our AEC reps generally slide after time. We are currently exploring a scale that either doesn't slide or has perimeters on ways for reps to be rewarded for increasing new business in existing accounts. We are also creating perimeters to encourage our "1:5" reps in specialty areas (FM's, Doc Mgmt, Variable Date) to involve "30" reps in the sales process. (A whole other can of worms.)
Deep and wide. New business in existing business. Team Selling...
SALES COMPENSATION: New Business or New Business? PART 3
SALES COMPENSATION : New Business or New Business ? PART 2
I think the focus needs to shift to treating "new business" in "existing businesses" equally as valuable as finding a whole new account.
This is not to say that new accounts are not a focus. We believe that by finding new contacts within our existing accounts amazingly allows us to grow our network and get "new accounts" through referrals rather than always cold calling. Some of the best reps in our business tell me they never cold call. I've also heard this from people like Jeffery Gitomer and other sales gurus. (This is of course once you get going - paying those dues.)
We find that in most cases our reps were not going "deep and wide" enough.
We find that in most cases our reps were not going "deep and wide" enough. Often, there are multiple people sending out work but our reps get in the mindset that having that one key contact is enough. As an example, our AEC reps would forget about the marketing department—Color Digital Reps would forget about the AEC needs— on and on....
to be continued...
SALES COMPENSATION : New Business or New Business? PART 1
Sales compensation is a very complex issue within Repro circles and beyond.
In the past, many companies built compensation plans wrapped around the idea of getting new accounts. Others also added reactivation of old accounts who stopped doing business. Upon research, observation and conversations with many of you I've shifted my philosophy.
Recognizing the idea that it is getting increasingly more expensive to get new accounts rather than increase existing business, I believe we must develop compensation plans that reflect these trends.
In other words, continue to reward reps for new accounts but eliminate the conflicts caused by reducing percentages too much on existing accounts. The reality is that many reps stop calling on existing accounts because they get a smaller commission. Instead they spend 10 times more time "cold calling" rather than developing deeper networks within their current portfolio.
To be continued....
Gratitude
"Gratitude is not only the greatest of virtues, but the parent of all others."
Cicero (106 - 43 BC)