Latest / Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint / Motivating Your Sales Team with the Right Compensation

Transcript

Motivating Your Sales Team with the Right Compensation · Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint

0:01
Hello and welcome to the show today.
0:03
The question that we're going to tackle is how to create a
0:06
motivating sales compensation plan.
0:11
The reason why we're tackling this, it's obvious because
0:14
salespeople are handled or paid differently in most
0:18
organizations and it's a very difficult job.
0:21
So the question always is, how do you motivate people to get up
0:24
and do what it is that they're supposed to do, to do what it is
0:27
that you want them to do? So this episode is going to be
0:31
for those of you who have employees, you know, 234567 a
0:36
hundred. You know, it depends.
0:38
So, well, First off, it doesn't matter whether you're a small
0:42
start up or if you have hundreds of employees.
0:45
Yeah, in a sense it does. You'll find that the principles
0:47
are the same. Like I said on the podcast, the
0:50
principles are the same, but then the order of applying, it's
0:53
what we attach priority to and how we execute is going to be
0:56
different depending on whether you have 3 employees or whether
0:59
you have 300. Now, in the interest of time, I
1:03
have done previous podcast episodes on these sorts of
1:06
things, the options that are available to you when it comes
1:09
to motivating your sales team. So I'd recommend that after
1:14
listening to this episode, if this is your first time
1:16
listening to the podcast you use, go to YouTube so you can
1:20
search within the podcast and then just hit my name and then
1:24
hit sales team or hit my name, put motivation or my name and
1:29
then put compensation, you know, those sorts of things.
1:33
And then you'll find podcast episodes where I have discussed
1:35
these sorts of things so you can get the fuller context of the
1:39
whole conversation. Now, traditionally, sales
1:43
people's motivation, you know, how do we deal with all that?
1:46
Traditionally this has been done by variable compensation.
1:51
So you have an organization, everybody collects fixed salary,
1:55
MD collects fixed salary, salary, CEO fixed salary.
1:59
Who else? The cleaner fixed salary.
2:02
But then when it comes to the salespeople, because the
2:07
assumption is, and I'm one of those people who's behind it
2:10
now, those of us who are in sales, we are more money, money
2:15
motivated than other people in the in the population.
2:18
So we care about a couple of things that, you know,
2:20
independence, being able to set your own schedule, yeah, money
2:25
compensation, you know, you work hard, you should be able to get
2:30
some something good in return. And so because of that,
2:32
traditionally sales people have been compensated in a variable
2:36
sense. Now all that means is you get a
2:38
base and then you get an upside of performance.
2:43
Although there are some industries where it's 100%
2:46
Commission. For those of you who've been
2:48
listening to the podcast for the last 2-3 days, you remember the
2:50
episode where I say where I spoke about my conversation that
2:54
I had with the head of corporate communications for the Abuja
2:58
Property Development, Abuja Property Development Company.
3:02
Yes. And how they market the projects
3:05
that property developments by attaching marketing units to a
3:09
specific site. And those marketing units are
3:13
made-up of, made-up of basically just made-up of agents who work
3:18
100% Commission. So yes, there are some of those
3:21
industries where people are 100% Commission.
3:23
So go out, bring as much business as you can.
3:26
I'm not giving you a salary, but whatever you bring back, you
3:29
take 10% or whatever. So those are the options. 100%
3:34
Commission. I am not going to talk about
3:36
that now, although I'll point out one thing.
3:39
There are some of us who hear 100% Commission.
3:41
I think, man, that is harsh. Like that is really, really
3:43
crude. But The thing is you already
3:46
live the 100% Commission lifestyle.
3:49
Most of you listening to this podcast episode, you just don't
3:51
realize it because once I was talking about how 100%
3:54
Commission is harsh and then somebody pointed out like, dude,
3:56
what are you doing? Are, you know, 100% Commission?
3:58
And then I was like, Oh yeah, that's true.
4:01
If I don't bring in anything, I don't eat because I'm
4:03
self-employed. So yeah, variable 100%
4:07
Commission sounds harsh, but The thing is, a bunch of you
4:09
listening to this podcast, you don't know it, but you actually
4:11
are on the 100% Commission lifestyle.
4:14
So you better realize that I'm better up your game because you
4:18
know, you don't bring in anything you don't eat.
4:21
If you have a girlfriend, you have those uncomfortable
4:23
conversations and if you have a wife you have those
4:25
uncomfortable conversations. If you have children you will
4:28
definitely have those uncomfortable conversations that
4:31
I want to go on skate. No, you're not going to skate.
4:35
Why, why, why, why, why I want to go on skate.
4:37
No, you're not going to go on skate.
4:39
At the back of your mind you're thinking OK, if I go to the
4:41
skating rink, one child is 4 Ki have four children.
4:45
If I take them to the skating rink 4 * 4, that is 16K16 K only
4:49
on skating. By the time we get there they
4:51
want Fanta after Fanta, they want chips, they want biscuits
4:54
blah blah blah blah. So basically if we go to the
4:56
skating rink now, I can end up spending just like 30 K just
4:59
like that. So yeah, most of you already on
5:04
now 100% Commission lifestyle. So just realize it that let's
5:07
step our game up so that we can stop having uncomfortable
5:10
conversations with our wives and with our children's and with our
5:12
husbands and with everybody else.
5:15
You know, like village association meeting December is
5:17
coming up. Your contribution is supposed to
5:19
be so, so so we haven't heard from your branch of the family,
5:21
you know. Yeah, all those conversations
5:24
are going to start coming up soon.
5:25
Now, that went September and, you know, before you know it,
5:28
October, November, December. So where was I?
5:33
Yeah. So traditionally variable
5:34
compensation, some people 100% Commission.
5:37
Other people will say, look, every month I'm going to be
5:40
giving you 50K. But then if you perform like
5:42
this, we add something. If you perform like that, you
5:44
add something. That is the whole idea behind
5:46
variable compensation. Take the small money, start now.
5:50
You know, use it to fill your car, buy good clothes, brush
5:52
your teeth, you know, buy soap. But then you perform well.
5:56
I had this. You perform well.
5:57
I had this. Yeah.
6:01
So that's it. Well, there are some modern
6:04
sales teams, and I find this really, really weird.
6:07
I've had to coach. I had to work for one client who
6:10
had a sales team that was on salary alone.
6:14
And I'm submit I'm probably kind of weird.
6:16
We started having those conversations about how we could
6:18
introduce a viable element. So this salary alone thing, it's
6:23
a modern phenomenon. So it's something that I'm
6:26
waiting to hear more about and to see studies on how that
6:30
impacts business performance. Now, of course, in Niger, you
6:33
know, we don't study anything. So we have to wait until the
6:36
good folks in America and in the UK and in Canada and all these
6:39
places, you know, when the professors in you know, all
6:41
those schools, them, them, you know, like Harvard Business
6:43
School and everything when they start publishing their results,
6:48
you know, to say we made the study of the top.
6:51
So, so companies who moved away from variable compensation to
6:56
fixed compensation salary. This is how it affected
6:58
performance is how it affected profits.
7:00
So hopefully in a couple of years we should have some
7:02
academic research to show us whether this thing is true, that
7:06
sales people perform better the more money you give them, the
7:11
more viable compensation you have, or whether if you just pay
7:14
everybody a fixed salary, it doesn't matter, profits will
7:16
still go on the same. But from my uneducated
7:22
standpoint, because you know, I'm not an academic when it
7:26
comes to business matters, I really would be surprised if
7:28
this whole thing of pay everybody a fixed salary and
7:30
tell them to go and sell, I'm surprised if it's actually moves
7:34
the business forward. So, oh, by the way, if any of
7:37
you guys are interested in these sorts of things and you have any
7:41
research, then please hit me up my contact details at the end of
7:43
the show. Let me see whatever resources
7:46
that you have. I'd like to pay attention to it,
7:49
get educated and then come and share the results with people
7:53
over here on the broadcast. So yes, I mentioned how
7:57
motivating your team, salary, blah, blah, blah, all of this is
8:00
important. And I mentioned how sometimes
8:02
it's different depending on whether you're a small startup,
8:04
whether you have two or three people or whether you have 200
8:07
or 2000, how it's different. And this is going to be one of
8:10
the differences. If you're a small startups, you
8:12
need to know your employee motivations so that when you're
8:16
talking to these people month after month, you know the
8:18
one-on-one thing that good managers are supposed to do and
8:21
good business owners are supposed to do.
8:23
If you didn't know know that now you should be having one-on-one
8:26
conversations with all your employees.
8:29
Even if you're not going to do it for everybody, you definitely
8:32
need to be having that conversation with salespeople
8:34
because know how know how you will acquire with your
8:39
salespeople. That is just is, is definite
8:41
because you're putting money into this thing.
8:43
You expect to see some returns that times when they'll perform
8:46
well, that times when they'll perform badly.
8:47
So you're not going to be quarreling with your accountant.
8:49
You're not going to be quarreling with the person who
8:51
handles your tax. But best believe you're sales
8:53
people. You quarrel, you know, once in a
8:56
while, every other month. So it's not a good idea that the
9:01
only time you sit down with your sales staff, it's you're welcome
9:03
to come and do quarrel. Why you're not doing your work?
9:06
Why is your quota like this? Why is your whatever.
9:08
So we need to have good cadences, you know, meetings
9:12
that will have more people, whether it's every Monday or
9:15
every other Monday or every first Monday of the of the
9:19
month. It doesn't have to be a Monday
9:21
by the way, just pick whatever your fancy is.
9:24
It's just that while I was in the insurance world briefly, it
9:30
was a Monday. And I noticed that for other
9:33
companies, it seems to be a Monday thing.
9:34
So there's that Monday meeting. But then the other organizations
9:37
I know who make it a Friday thing.
9:40
But you need to get to know your employee.
9:42
Employees get to know their their motivations so that when
9:45
you're having all these conversations around financial
9:48
performance, compensation, salary, blah, blah, blah, you
9:52
can tie it into concrete terms of what these people's goals
9:56
are. So if you know that somebody is,
10:01
let's say maybe they grew up rough, everybody went for
10:03
masters. They they didn't go for masters.
10:05
They've decided that their children must go for masters.
10:09
You can weave in those sorts of things into the, into the
10:12
conversations like, OK, oh, how is Kuli?
10:15
How is Kemi that Kuli and Kemi being the children, how are they
10:17
doing? OK, secondary school.
10:19
That means you're now getting ready for, let's see, what is it
10:23
called again? Is it GMAT Abby, GMAT or GCS ES
10:26
or whatever? So ready for GMAT, ready for GCS
10:29
ES. I hope you're ready.
10:30
You know, these things are expensive, blah, blah, blah.
10:32
Some small chat and you know, and then you of course, tie that
10:37
into their performance at the company.
10:39
OK, look, we're doing good based on what we did last year, this
10:41
is how much we made. But if you're able to perform at
10:44
so, so, so and so we should be able to match the salary with
10:47
this, this and this. And Omar, you should make your
10:49
life a whole lot easier so that next year when cooling and
10:51
Chemi, when they give you the bill that, OK, this is the
10:55
school you want, you know, whether the school is Malaysia
10:57
or whether the school is Canada or whether the school is
11:00
America, you should be able to perform.
11:03
So we you should be having those conversations, get to know your
11:06
employees. That is possible when you have a
11:09
two or three man or woman sales team, when you know 2000 people,
11:13
I mean 2000 people in your company, I mean, how you doing?
11:16
So hopefully your sales manager will be having those kinds of
11:21
conversations on the small, small level.
11:24
But you need to get to know your people.
11:25
You need to know what's up, what's going on in their lives.
11:30
Sometimes it's just simple headache issues or heartbreak
11:34
issues or personal issues or whatever and somebody's going
11:37
through a funk and you can talk through talk some people through
11:39
some some stuff because you know, things can be things can
11:44
be rough. You know, the country is not
11:45
soft right now. So people are going through
11:47
stuff. So even if it's a simple thing,
11:49
not doing the one-on-one like how far like I notice you've
11:51
been somehow your face is not bright like what's going on.
11:54
You know, you have some simple conversations on the one-on-one,
11:58
not on the business level. Now you help talk people through
12:02
some challenges, you know, 'cause you can't relate as a
12:04
human, you know, these sorts of things help, you know, they feel
12:07
seen, they feel heard. For those who are extremely
12:11
money motivated or have very direct money goes, you guys can
12:14
have that conversation and see how it's tied to company
12:16
performance. But you're, if you're a small
12:19
startup, basically what I'm trying to say is get to know
12:21
your employee. You guys should be vibing, you
12:23
guys should be talking. And once a month I really think
12:27
is not enough. Just pick a day of the week, you
12:31
know, every Monday, whatever it is.
12:34
There's that general thing where the sales people sit down, you
12:37
sit down, you guys have a chat. These are the numbers.
12:40
This is where we're heading. You talk some personal
12:42
development, you do some motivation, bring, you know,
12:44
jazz everybody up. But then you have a small team.
12:48
Try and do that one-on-one thing.
12:50
You really need to know what's going on and then also helps you
12:54
to have much more effective conversations when things go
12:56
bad, because if all you do is when things are bad, you now
13:00
show up and you quarrel. You know, you begin the rake,
13:01
you shout up and down that sort of thing.
13:04
There's a limit to how much coaching or personal influence
13:08
you can have on these sorts of people.
13:09
But if you guys have been meeting on one-on-one, you've
13:11
been talking, you've been yawning, you have some some kind
13:14
of personal relationship. Don't overdo it because you know
13:17
you're not their friend, you're their boss and you know this
13:20
Niger. Now we don't take talking back.
13:24
Very likely in this part of the world, like I'm paying your
13:27
salary, I say A, you say B. Like on top what?
13:30
So that kind of thing. By the way, establish some sort
13:35
of relationship. You will be able to have sales,
13:39
personal development conversations and all those
13:42
sorts of things. So let's move on beyond that.
13:46
That's for those of you who have 23456 employees.
13:49
Get to know your people. So let's have some words now on
13:52
bonuses and other incentives and how that affects morale
13:58
motivation. Because I've spoken about salary
14:02
structure, you know, 100% Commission or not, and then
14:06
variable compensation. That's a base, the, you know,
14:09
some monthly stipend or something then plus plus a
14:14
percentage just to reward you. But there are some other things
14:18
in between and that is where bonuses and incentives come in.
14:22
So there are short term bonuses traditionally that people use,
14:26
you know, based on how you perform monthly or quarterly or
14:29
yearly. So OK, let me go back to the
14:33
insurance thing. So like with in the insurance,
14:35
that's, that's typically how it's done.
14:37
So you're meeting your quota and everything.
14:40
But if you're performing at a certain level quarterly, there's
14:42
some things you'll be getting yearly at the end of the year
14:45
where they fly everybody to Lagos, especially the top
14:47
performance or fly to Abuja or wherever your headquarters is.
14:53
There will also be some bonuses as well.
14:57
Then let's see, OK, There are also long term incentives, like
15:02
really, really long term incentives.
15:04
But that is for big organizations where they say,
15:06
OK, you know what, we've been very good in Port Harcourt.
15:08
We now want to enter this Abuja market.
15:10
You know, Abuja, that's where all the ministers are, the
15:12
politicians. So there's money that we now
15:14
have to enter Abuja market. You now start giving people long
15:17
term incentives like OK, if we enter Abuja in the next one year
15:22
or two years, if we're able to acquire this number of clients
15:25
or to corner this part of the city or to do this or to do this
15:29
real but really long term stuff, then this is what we're going to
15:33
do. You know, you'll be given this
15:34
as a salary or you'll be given, I don't know, official car or
15:38
whatever, but this is long term stuff.
15:41
So all these bonuses and all these sorts of things, they can.
15:44
OK, one more thing, team bonuses.
15:47
Now, this is not something I have seen working in Nigeria,
15:51
but it's stuff that I have heard a lot about.
15:54
So I'm confessing now, I have not seen mine eyes, have not
15:58
seen team bonuses in Nigeria, but I have heard that they do
16:02
this in the UK and in America. And this is where basically the
16:05
goal is on the team. So if all of us, all of you
16:08
know, you fall as a team, you will hit this then, you know,
16:12
250K go and share among yourself, that sort of thing.
16:17
Yeah. If any of you have worked in
16:19
organisations in Nigeria where they used teen bonuses as part
16:22
of the motivation framework, please let me know.
16:29
Reach out to me. My contact details will be at
16:30
the end of the show. I'd like to hear what scheme
16:33
your company used and what your experience was.
16:36
So also I can go and share with other people listening to the
16:39
show because in Niger, typically it's it's every man for himself.
16:44
So yeah, we all come, we all have the sales meeting.
16:47
You try and motivate everybody, but then every man for himself,
16:49
you finish the meeting. You know, Shade will go and sell
16:52
how she wants to sell. Kundi will go and sell how he
16:54
wants to sell. Abdul Kadir will go and sell how
16:56
he wants to sell. If Abdul Kadir and Kemi think
16:59
that they can collaborate on some things and improve their
17:01
chances, you know, but that's more like an inside thing
17:05
amongst them. But let's see how if it's
17:08
possible or what Nigerian companies have done on team
17:12
bonuses then even though salespeople are supposed to be
17:18
money motivated, I am very money motivated.
17:21
I'm glad I know myself as I need the money.
17:23
But money is not just the only part of the equation.
17:26
So people are also motivated by recognition.
17:30
So sometimes a quiet conversation where you pull
17:33
somebody and say, you know, Abdul Kadir, good job.
17:38
That deal that you brought, like Omar, we were or in a tight
17:41
spot, nothing that you brought that deal that you brought not
17:45
for him. Nice one, nice one, nice one.
17:47
He's going to keep the company going for a while.
17:49
And while you saved us, you're a treasurer, correct guy.
17:52
The simple conversation like that is enough to motivate some
17:57
people. Although my wife says, you know,
17:58
to hell recognition, give me the money.
18:00
So that's what my wife says, although to be honest, I think
18:03
she's a recognition person herself because wife is very
18:06
cerebral and like most professional women, they have a
18:11
personal or professional stake, you know, and how it is that
18:14
they perform. So the whole thing of, you know,
18:16
you're capable, you're intelligence, you're driven, you
18:19
have done a good job, you have saved the department.
18:22
Things go a long way like that to those those sorts of
18:27
individuals and those sorts of women.
18:28
So let's remember recognition, so publicly acknowledge people
18:34
when they perform well. So publicly, you know, that
18:38
works. But like I said, calling
18:39
somebody outside for a chat to say, you know, my guy, you saved
18:42
us. That's that also works.
18:44
Then in the West, you know, America, USA, there's trips and
18:50
prices like, OK, you've done well.
18:53
Take this card, you know, or take this trip, travel here,
18:57
travel here, go on by this, go on by that.
18:59
I haven't heard of Nigerian companies doing that.
19:01
So if you've worked with a company while you were in the
19:06
sales role and this is how they motivated you guys, you know,
19:09
maybe like you did well and they say, correct, you and your wife
19:13
take this flight. We should go and enjoy in Ubudu
19:15
cattle ranch, that sort of thing.
19:17
If you receive those sorts of things, reach out to me.
19:19
Contact details at the end of the show so I can come back here
19:22
make a follow up episode to say that yeah, these are the ways
19:25
that Nigerian companies are motivating their their staff.
19:28
So tips and prizes. I'm going to do some work with a
19:33
custom bag manufacturing in Abuja on October 1st.
19:37
They're doing like a staff retreat.
19:39
So I guess it could be one of these things so it's a staff
19:41
retreat and training. I'm going to come and talk to
19:43
them about the, you know, team cohesion and how every, every
19:51
single, how everybody's work, every, every departments work in
19:56
the business creates a healthier business, a much more profitable
20:00
business as a whole. So that'll be the whole point of
20:02
the talk. But then, you know, of course
20:04
there'll be plenty of shops, plenty of relaxation.
20:07
The office is going to be closed that day.
20:09
It's not going to be any work. So I guess we can say it's that
20:14
sort of thing, even though no prices are going to be given out
20:17
and even though it's not going to be a trip because everybody
20:19
will be out of the office, but. It's not a trip.
20:21
So yeah, those sorts of things are there.
20:23
Then you can also motivate your sales staff by investing in
20:27
their professional development. So invest in their training.
20:31
And to be honest, I'm not sure if Nigerian employees value this
20:36
because, you know, currently we have hyperinflation right now.
20:39
So there's some people who will be like, look, just give me the
20:41
money. I know this for, OK, I was going
20:45
to say I know this for a fact, but let me not say I know this
20:47
for a fact. This is like my own guess from
20:49
the outside looking in. So it looks like in the civil
20:52
service professional development works well, but that is because
20:57
The thing is tied to Ester code. You know, you will go and do
21:00
professional development something, something, something,
21:03
OK, the training is in Lagos, so we'll pay you, you know, go and
21:07
book hotel, go and this go and that.
21:08
And then the person will try and see how they can save some money
21:11
on the whole thing. And then if it's foreign
21:13
training, you know, even better, they'll collect the money in
21:15
hard dollars and they will try and see how much they can save
21:18
when they go for these sorts of things.
21:20
So professional development schemes, civil service, Yeah, it
21:23
seems to motivate them a lot. Although I hear from the outside
21:26
that, you know, they've now turned it into a sort of how
21:31
they put it that is not tied to performance, but basically like
21:34
people that you want to, you want to settle your guys.
21:36
And that's what you do, you know, but doesn't it's not
21:38
really tied to how people perform anyway.
21:41
So those are just some thoughts around this whole thing about
21:44
professional development, but I think you should be investing in
21:47
the training and development opportunities for your staff.
21:49
And this is the reason why while your staff are with you, if
21:52
they're not trained up, they're not going to do a good job.
21:54
Your business is going to suffer.
21:56
There is that fear that if you train them up, they're going to
21:59
leave. Well, you have some bad news for
22:01
you, dear business owner. And The thing is, everybody
22:05
leaves. Well, not everybody, but most
22:08
people leave. So whether you train them or
22:10
not, they're going to leave. So I think you might as well
22:12
just train them so that they can be the most effective that they
22:16
are right now. But then again, you know the
22:18
kind of people that you have. And that's the reason why I say
22:21
that when it comes to hiring salespeople, we don't look at
22:24
CV. We first of all have people who
22:26
hear word. Somebody who used to hear word
22:28
is the person that can take advantage of professional
22:30
development opportunities. Somebody who does not hear word,
22:33
who thinks that they already know what's up and and who
22:37
thinks you can't tell them anything.
22:38
It doesn't matter how many trainers you bring in, The thing
22:41
is not going to shift gang as in nothing will happen.
22:44
So let's make sure that we're hiring the right people from the
22:46
gecko and let's see what else Professional development.
22:54
OK, I didn't consider the sales cycle and how complex that the
22:58
product is. So traditionally when you have
23:01
people dealing with a short sales cycle, then just make this
23:04
thing purely based Commission. So if you deals that can close
23:06
shop, shop, shop, shop, you know, close on a daily or close
23:09
on a weekly, just leave this thing 100% Commission will be a
23:12
whole lot simpler to do it that way.
23:15
But therefore long sales cycles, then it now makes sense to
23:18
combine the base plus Commission.
23:21
So for those of us who tried selling insurance and financial
23:23
products, you know, that's the reason why it's base plus
23:25
Commission because you don't want to talk to somebody on
23:29
Monday and then close the deal on Friday, get them to buy
23:31
insurance. So most likely you talk to the
23:33
person, you know, week 1 and maybe in week 12 something
23:36
happens. But you understand that between
23:39
week 1 and week 12, this guy that is doing the selling or
23:43
this babe that is doing the selling, you know, she needs to
23:44
fuel her car, brush her teeth, make hair, you know, buy food,
23:49
all these sorts of things. So that's why in that space,
23:54
it's base plus something. So it is base.
23:57
The 5050 K every month or the hundred 100K every month is not
24:01
supposed to improve your life. It's just to make sure that you
24:04
get to work, your clothes are clean, you brush your teeth, you
24:07
don't die of hunger. Then the rest is up to you.
24:10
If you do well, the money will go up.
24:12
If you do Poly, you stay where you are with that base.
24:15
If you don't bring anything for three months, manager and I'll
24:18
call you and say, look man, we're paying 5050 K every month
24:21
for the last four months, you haven't brought in a single or
24:23
something. So boy, how far shape up or get
24:26
out. So the sales cycle, the length
24:29
of the sales cycle and then and how complex the product is
24:32
determines, also determines whether you're going to do 100%
24:37
Commission or this whole base base salary or base money or
24:41
stipend, you know, plus incentive to perform.
24:46
Then one thing that I want to restate that I've put said in
24:50
all the episodes that I want to stay again, just in case it's
24:53
your first time listening to the podcast and you're a business
24:55
owner and you're thinking about these sorts of things when it
24:59
comes to reviewing and adjusting the plan because everybody will
25:03
review and adjust because you know, you're not good.
25:06
You don't know what's going to happen.
25:07
So you have a plan that seems to work for now.
25:11
Then the president comes in and makes an announcement, fuel
25:15
prices triple and I guess the plan doesn't work anymore.
25:18
So you have to review that plan because when you do that, cost
25:23
of business goes up. You might not be able to
25:25
increase the price immediately. So the big, big money you are
25:28
paying your people before, I guess you might not be able to
25:31
pay them again. So if before what you are giving
25:33
them was above every one M, you give them 20% and then president
25:36
comes in, makes his policy change, it will not be harsh
25:39
because you can't really increase your prices, double or
25:43
triple your prices. So sad to say, but this is 1
25:47
area where the business will now try and save costs, you know,
25:50
so, So if you have to review or adjust the plan, do this
25:54
sparingly because some people just just be reviewing anyhow.
25:58
Because I've heard of some companies where you review it in
26:00
January, then in March you're reviewing, then in June you're
26:05
reviewing. I mean, before the years of
26:08
reviews, like four or five times.
26:09
Nothing really messes with sales people because sales is hard.
26:13
And if somebody's working now and he's used to this 20
26:17
percent, 20%, the guy's counting on that 20%.
26:20
The baby's counting on this 20%. Like, you know, she needs to pay
26:22
her rent. She's counting on that 20%.
26:25
So if the time comes and she's expecting to see that, check for
26:28
20%. But what entered her account was
26:31
9% or 12%. It affects it affects motivation
26:37
and people's ability to perform. So don't just be flip flopping
26:40
and be changing the thing anyhow, also let people know
26:44
what's up. Give them a heads up.
26:46
So, you know, president comes in, makes the announcement.
26:51
You know, you give people a heads up at the Monday meeting,
26:53
like, OK, we're here, blah, blah, blah.
26:56
You guys heard what happened. We'll have to increase our
26:59
prices. We'll not be able to triple it.
27:02
But I'm suspecting that, you know, we have to make some
27:04
changes in the future. I might have to look at those
27:06
compensation again. But let's just use this next
27:08
like one month, two months. Let's see how the numbers pan
27:11
out. You've had that meeting, you've
27:12
told them so in February when you now come to say, OK, you
27:16
know what, this 20%, I can't be giving you guys this 20% anymore
27:19
and I'll be giving you guys 8% or something.
27:22
You've given people time. It's not a surprise.
27:25
You don't look like a thief or a non serious person and you've
27:30
created an atmosphere where you guys start having those
27:32
difficult conversations so that if somebody says, if somebody
27:36
wants to say I can't deal, you know, you guys will be able to
27:40
end your relationship on an amicable basis.
27:45
So give people a heads up that the conversation structure is
27:48
about to change and always try and explain, explain the changes
27:53
not just from the point of view of the business, but from the
27:55
point of view of the people, the sales team as well.
27:57
So there are some companies during COVID, for instance,
28:00
where they had to have that conversation.
28:01
Like, look, I know I've been paying you guys on X percent,
28:04
but this is what is happening. Excuse me, this is what is
28:08
happening. Because of COVID, profit has
28:11
gone down. I can't keep all of you on
28:13
Salario. So if we're going to keep
28:16
everybody, then you know, the base, the base might have to
28:19
drop. After all, we're working from
28:20
home now. So let's just drop the base by
28:22
this amount and you know, you have that conversation
28:26
basically. So from business point of view,
28:30
this is what we're seeing. Then also from their own point
28:32
of view, because some people also value job security.
28:35
So it's a, it is a legitimate conversation to have that.
28:39
Look, if I'm going to keep paying people with this 2020%,
28:41
I'm not going to be able to keep all of you.
28:43
So here's the reason why I'm making these changes.
28:47
But summary what I've been saying on the podcast and I'm
28:50
repeating again, pay people when you promise to pay them and then
28:54
pay them as you promised to pay them.
28:57
Don't be changing from month to month and from quarter to
28:59
quarter. So whatever you said, if you
29:01
said 19th of every month, pay them 19th of every month.
29:04
If there's going to be a problem and you can't make 19th of every
29:06
month, don't tell them on the 17th.
29:09
It really messes with sales people's motivation.
29:12
You let them know as soon as you think you have a problem.
29:13
Now look, you know what I know normally it's 19th, 19th more
29:17
more this month it will be like 23rd, 25th.
29:21
Have that conversation. Let's see what else.
29:26
OK, so for those of you who are new to the show, maybe you
29:28
haven't gotten a sense of what it is that we're talking about.
29:30
Let me just give an example. So you could hire a salesperson
29:34
and part of the conversation will be like, look, your base
29:37
salary that we're giving you is five M every year.
29:40
So that means monthly is, you know, you work out however five
29:43
M every year. How much the monthly is however,
29:46
well when we give you 5% on all sales, so your size 5M per year,
29:54
but if in a year you bring in 20 M in sales, then you know, do
29:59
the math 5% on that 20 M, you know, prorated on a monthly
30:03
basis, that's how much the guy or the people we collecting and
30:06
you also tell them and on top of that we have quarterly bonus.
30:09
So, so we'll be meeting every 3, three months, you know, so we
30:13
will meet in January, we'll meet in April, we'll meet in
30:16
whatever. Then you might get 10% of your
30:22
base salary if you exceed this number of things.
30:25
So if you get this number of clients or you get this number
30:29
of deals, they will now give you 10% or that your base salary
30:33
that's of the five M. And then remember how we're
30:37
talking about bonuses and things like that, OK, that's quarterly
30:40
bonus. Then you know, some people might
30:42
even add annual bonuses, OK, at the end of the year if you
30:45
exceed so, so, so and so, we'll also not give you 20% on top.
30:49
So you see how that's basically the kind of thing that we've
30:54
been talking about over here. So when it comes to people who
30:56
work in accounting department or marketing department, their
30:59
salary is their salary. If what you told them was 5 M,
31:01
then they're collecting 5M full stop, nothing more.
31:03
But then for the sales people, you see how there's some ginger
31:05
like, OK, I'm collecting 5 now 5 is not is not sweet because
31:10
times are hard. But if I do well, I'll give
31:12
extra 10% on all that. And then this quarterly thing,
31:16
if I'm able to kill it between January and February, that means
31:19
I'll be able to collect another 10% on MI5M.
31:21
And you now see how sales teams start planning around these
31:26
sorts of things, you know. So how can I hit it hard this
31:29
time? How can I do it like this?
31:30
How can I exceed this? How can I exceed that?
31:32
So that's the whole game basically about how we keep
31:36
sales team sales people motivated.
31:40
An additional tip, keep it simple, keep it easy to
31:43
understand because many things can be hard.
31:45
I'm not a math person and I would like when I was with
31:49
insurance company, I was, it was overwhelming the amount of math
31:54
that you have to know to know how much you're going to be
31:55
paid. You know, this percentage of
31:57
this and have this on this and this will be berated by this.
32:00
And I'm like, like, I just want to sell like, why are we like,
32:05
what's with the marker and then the board?
32:08
And then you write the formula and I'm like, I beg.
32:11
It's much. So keep it simple.
32:13
Let people be able to understand.
32:15
Don't, don't I know for you accounting people and tax people
32:20
and everything, yes, you will have to keep things very, very
32:22
precise, but just keep it simple for the sales people to
32:24
understand. Then communicate it clearly,
32:27
communicate it regularly. Make sure everybody understands
32:31
the plan and how it works. So at that first Monday meeting,
32:35
explain. In February.
32:38
At the next Monday meeting, explain.
32:41
In March, explain. I know after a while it might
32:44
look as if you're over explaining what really is
32:45
important. People really need to know how
32:48
they are paid. What's the formula?
32:51
When everything. So repeat it every now and then.
32:54
Make sure it's a simple formula then.
32:57
OK. Competition.
32:57
Yeah, I forgot competition. Sometimes it also depends you're
33:02
entering the space, how much is the competition paying other
33:04
people and how sometimes that is also a factor if you want to
33:09
make sure that you're not overpaying people or sometimes
33:11
if you want to steal talent because like, well, my mom
33:13
worked for Globe Global com. That was the thing that I didn't
33:19
know the the fellow who owns globe.
33:22
That was something he used to do very well.
33:23
So if everybody is paying so, so, so amount, but he wants to
33:27
attract a particular person, like this person is talented.
33:29
Maybe the person works from MTN or something, you know, the
33:33
offer would be this is what they used to pay you.
33:35
We're now matching this and we're adding plus this.
33:38
And that's how he would end up getting people to work for his
33:41
competition. And so I work for him and the
33:43
other businesses who do that sort of thing.
33:45
So if they're paying sales people in all other places 1010
33:49
K as base, you know, you can enter into the market and say,
33:51
OK, base with my own company is going to be 20 K.
33:54
And the idea is that you should be able to get sales people who
33:57
work for the competition to rush and then come and start selling
34:00
for you. So if any of these things that
34:03
I've spoken about so far sound overwhelming for you, the
34:06
business owner, yes, it can be overwhelming.
34:10
So that is the reason why I should be talking to someone
34:12
with sales management expertise. It also is the reason why I keep
34:15
saying that to build a successful business, it is a
34:20
team effort. You can't run everything by
34:23
yourself. There's some things you know,
34:24
there's some things that you're good at.
34:25
You don't know everything. You're not good at everything.
34:27
So we need a team. So start getting ready.
34:31
If you're not at this stage yet, start getting ready.
34:33
Eventually you're going to need somebody in your corner who has
34:36
some sort of management expertise, general management
34:40
expertise or sales management expertise.
34:43
So that's it for today. Connect with me on LinkedIn.
34:45
The name to look for is Tabishima Ayede.
34:47
I'm the host of the show The spelling of my name.
34:49
You can get it from the link where you're listening to this
34:51
episode. So highlight, copy, paste it in
34:53
LinkedIn. You see my handsome face.
34:55
Just connect and we can have a chat and also connect with me on
34:59
WhatsApp. The phone number is 08064662140.
35:05
The country code is +234. For those of you who are not
35:08
Nigerian. And don't fret if I don't
35:11
respond to you within an hour or two.
35:13
You know things can get kind of busy but last last 48 hours.
35:15
I respond to everybody. So thanks for the time and
35:17
attention. I'll catch you guys at the next
35:19
episode.