The True Cost of Frugality in Sales Comp
After a few too many conversations with business leaders about the interplay between their budget constraints and challenges finding/keeping good salespeople, I thought to write this -- from the point of view of THAT business leader. Here we go with some role play!
As a business leader, I've come to a realization that I believe many of us need to confront: our company has been struggling to find good salespeople, and it's time to admit that our parsimony might be the culprit.
For years, we've prided ourselves on our lean operations and cost-effective approach. However, when it comes to sales talent, this frugality may be costing us more than we're saving. Here's why:
Talent Attraction: Top salespeople know their worth. By offering below-market compensation, we're effectively filtering out high-caliber candidates before they even consider us.
Turnover Costs: When we do hire, our lower wages often lead to higher turnover. The costs of constantly recruiting, onboarding, and training new staff far outweigh the initial savings.
Opportunity Cost: Mediocre salespeople miss opportunities. The deals we're not closing due to subpar talent represent significant lost revenue.
Brand Reputation: Our sales team is the face of our company. Underinvesting in this crucial function can damage our brand in the market.
Team Morale: A revolving door of sales staff creates instability and lowers morale across the entire organization.
It's time we shift our perspective. Instead of viewing salespeople as an expense to minimize, we need to see them as revenue generators to invest in. Quality salespeople don't just cost money; they make money. They turn opportunities into revenue.
Moving forward, we're committed to:
Reassessing our compensation packages to align with or exceed industry standards
Investing in robust training and development programs
Creating clear career progression paths within our sales department
Implementing performance-based incentives that reward excellence
By doing so, we're not just investing in individuals; we're investing in the future of our company.
It's time to acknowledge that in sales, as in many aspects of business, you often get what you pay for.
What are your thoughts? Have you faced similar challenges in your organization? Let's discuss how we can collectively elevate the sales profession and drive business growth.