home Credit What is the monthly turnover of a sales representative. Motivation of sales representatives

What is the monthly turnover of a sales representative. Motivation of sales representatives

Why and why was this book written? Many years ago, although, to be honest, quite recently, when I was just starting to work as a sales representative, from the very first minutes I found myself in an atmosphere of complete uncertainty. Thrown into the "fields" to conquer shops and stalls, I naturally felt like a blind man, moreover, not knowing where the right road was. Questions on the topic: “What to do? How to sell? How to sell successfully”; appeared daily and in great numbers. Weeks, months passed, my professional interest deepened, and I was already asking myself about more complex things: “What is trade marketing? What about distribution? And what should come first: distribution or sales? Why do some companies behave in the “fields” in this way, while others do not? What is the difference between a sales manager and a sales representative? For answers, I turned to my supervisor (and who else, if not the main partner and mentor!). But he preferred to tell me about the excellent prospects that await the company in the event of the hard work of each trade representative. I confess that this reminded me of the recent pioneer past, and from that moment on my questions became much sharper and more dangerous: “Why don't supervisors know anything? Why is my price 5% higher than that of a wholesaler in the Mytishchi market? Why does a company “launch” a new brand every month and then forget about it after two months? Why are unrealistic plans put forward over and over again? The boundless curiosity of the sales representative could not be satisfied even by a professional trainer of the company, who politely avoided answering, and instead predicted a bright career future for me, of course, if I, in turn, stop asking about such things and concentrate on mechanical work.

11. Salary sales representatives.

Any work should be adequately paid, especially if it is done in good faith. However, the principle of payroll for field personnel is still one of the most unknown and confusing phenomena in the world. Nine out of ten trade representatives will not be able to explain with sufficient certainty why they earned this much last month, and not more and not less. Most will say that the management is wise, someone will nod at the accounting department, but almost everyone will be sure that they are seriously underpaid. Indeed, fraud with wages in trading companies is not uncommon. The income consists of a fixed and a variable part, which allows the employer to shamelessly manipulate the final amount, significantly reduce their personnel costs and keep sales representatives on a short leash. The purpose of this article is to increase your awareness of the mechanisms for paying trade representatives, to find out the positive and negative aspects of each system.

As I mentioned above, the income of sales representatives is formed from a fixed salary and bonuses. However, as a rule, the salary itself is not high and can even be equated to the minimum salary established in the region. In addition, some employers have a bad habit of including compensation for the car and telephone connection. But remember, if at an interview a potential manager persistently confuses compensation with salary, seriously think: in this company they intend to seriously underpay you. It is foolish to mix work and family budgets, otherwise the former will suffer in any case!

Foreign companies(not all) and some domestic ones consider the bonus as a secondary part of the sales representative's income. The principle is professed: bonuses come and go, and the employee should not think at work about what his family will eat tomorrow, so the fix for employees is two-thirds or more of income. In fact, such a humane system does little to stimulate trade representatives to work, because not the most stupid people came up with the principle “as you stomp, you will burst.” The most reasonable system is when the salary is sufficient to meet the minimum needs of the employee, but does not exceed half of the total income.

So let's talk about bonuses.

Linear(percentage) is a very common and predominant bonus scheme. In this case, the trade representative's income is calculated according to the scheme: salary + x percent of sales (as an option - from the fulfillment of another indicator). Why is she good? In theory, everyone! In this case, your earnings depend only on your performance. If the trade representative works better than his colleagues, then he gets more. However, there are plenty of downsides too.

Firstly, your opportunities are limited by the number of outlets in the territory, their traffic and quality, the seasonality of the goods, their availability in the warehouse, the activity of competitors, and, finally, the volatility of customers. Imagine that you sell ice cream and get fabulous money in the summer, and “suck your paw” in the winter, and this despite the fact that the authorities “drip on the brains” every day, demanding summer sales. Or you got a remote district with small shops and poor buyers, and a more successful colleague got the Kazansky railway station. And so you run, rush around the territory until late at night, but the result is still weak, and a colleague goes to dinner at twelve, then picks his nose until the end of the day, and as a result gets twice as much.

From this, by the way, follows the second minus. With such a pay system, you always come into sharp conflict with your colleagues. If the earnings of team members differ dramatically, then believe me, no amount of reasoning about experience, the specifics of sales, and other significant circumstances will help restore trust between employees. Be sure to appear offended, who will begin to decompose the team. Schemers will also be found trying to change the situation in dishonest ways, including taking away your best clients.

Thirdly, if you get sick or go on vacation, then most likely you will receive only that very meager salary.

Fourthly, as soon as you start earning a lot, the authorities will definitely change the motivation scheme or transfer to prove professionalism to another undeveloped territory. Consider an example. Your salary is 20,000 rubles + 5% of sales. If you sold 300,000 rubles in a month, then you will receive 20,000 + 15,000 = 35,000 rubles. And everyone is happy. But now the volume has grown to 600,000 rubles and you have been credited with 20,000 + 30,000 = 50,000 rubles. Your salary suddenly became higher than the average for the team, company and specialty in general. The authorities begin to think like this: “Why do we need to keep an expensive trade representative, if with this money we can hire two cheap ones who will not be enough stars, but still increase the coverage of the territory?”

And in principle the company will be right. Such a system corrupts any person if he starts earning almost as much as he wants. At this stage, the sales representative stops thinking about expanding the business and increasing key indicators. Think about it, why work an extra hour a day for the sake of an additional 3,000 rubles, if you already get 45,000, which is enough for a living?

In general, a large salary of a sales representative is a short-term phenomenon. Not a single company, no matter how sincere its principles of caring for field employees may seem, is not interested in their decent earnings. Most firms are unwilling to pay reps fairly, and you will see this happen many times. As soon as the income of sales representatives at optimal labor costs increases, the motivation scheme immediately changes, bringing down all indicators.

Now let's look at the line bonus through the eyes of your boss and understand the main disadvantage of the system in question for him. Working on a percentage depersonalizes the assortment of the company. From the sales representative, first of all, they expect money, and he is lucky. But the manufacturer is always interested in promoting new brands and expanding distribution. What you most likely won't do unless you get a special task. For example, from the general sales plan, an amount will be allocated that should fall on a key brand. If you fail to complete the special task, your bonus will be seriously reduced. But trade representatives are not stupid either, and have long ago come up with a way out of the situation by selling goods that interfere with quiet work in one or two large outlets, which, you see, does not improve distribution in any way. Those of the sales representatives who do not succeed, having received a meager salary a couple of times, write a letter of resignation, since the demand for representatives of this profession exceeds supply. In both cases, the leader remains in the red.

Fixed bonus - it is a well-defined monetary bonus that each sales representative can receive if one or more of the assigned tasks are completed. The size of such a bonus is calculated as a percentage of completion and has a limit threshold. This system mainly used by employers who set limits on the maximum income of a sales representative.

How is the fixed bonus calculated? Imagine that the maximum bonus amount of 10,000 rubles is paid for completing two tasks. The most important of them costs 6,000 rubles, the second - 4,000. The bonus is calculated if the task is completed by at least 75%. According to the results of the month, the trade representative Ivanov achieved 85% on the first task, 90% on the second one, respectively, he was awarded (6000*0.85=5100)+(4000*0.90=3600) = 8700 bonus rubles. Trade representative Petrov has other figures: 70% and 100%. And his bonus is (6000*0=0)+(4000*1.00=4000) = 4000 rubles.

Why is there a minimum percentage of completion? Is it fair? After all, if Petrov “brings” at the end of the month not zero, but five percent, his bonus will not change. Why not pay the trade representative an additional 4000*0.05=200 rubles? Even though I've been a sales rep myself for a long time, I'll be honest, it's a fair system. The company expects that it employs employees with sufficient experience and qualifications to perform the task. Below is unprofessionalism, why pay for it? A fixed bonus is an optional part of the remuneration, first of all, it is a tool of motivation, encouragement of those employees who are ready to work conscientiously and better than others.

For a sales representative, a fixed bonus has positive side: in addition to the guaranteed and sufficient salary, he also receives a pleasant increase, and this is with a calm, uninterrupted work. But there is also a significant disadvantage - leveling, because no one will pay you more if the plan is fulfilled, for example, by 120%. Therefore, soon the zeal for work will subside and you will keep within 80 percent, so as not to get hit in the neck.

For an employer, a fixed bonus is a lot of advantages. Firstly, such a bonus system allows you to direct the efforts of the team to solve current problems. Secondly, when planning, the management of sales departments deliberately overstates the final goals. Let me explain, with the task of selling for a million rubles, sales representatives are given a plan for one million two hundred. Trade representatives bring 80% from the "fields", that is, they sell for 960,000 rubles, which practically meets expectations. Third, it is a fixed percentage of labor costs. Fourthly, the preservation of the team spirit, because the incomes of trade representatives differ slightly. Fifth, increase the manageability of the sales process. The only, but significant, disadvantage is the desire of sales representatives to perform tasks at a certain level.

Of course, the practice is much richer. Many companies use their own, combined schemes to motivate trade representatives, but they are always based on a linear and fixed bonus system.

Whatever the company, large or small, foreign or Russian, manufacturer or distributor, in any case, the remuneration system for sales representatives must comply with the following parameters:

- simple and understandable (when each employee can independently calculate their income);

- correlate with the wishes of the staff (if the employee himself participates in the development of the motivation system, he then works with great pleasure);

- there should not be more than five criteria for accruing bonuses (otherwise there will be confusion, and not only among trade representatives);

- correspond to the labor contribution of employees;

- Meet the goals of the company.

But that's not all! The minimum possible income should be coordinated with the living comfort zone in the region, that is, determine in advance the amount that allows the employee to more or less adequately (exactly adequately!) Live until the next payday. And least of all, I advise the employer to focus on the average market value of wages of trade representatives: due to regional specifics, it can be both underestimated and seriously overestimated. Both of these options lead to negative consequences for the company.

Efficient system pay allows not only to attract new employees, but also to retain old ones. Lack of such is one of the main reasons for staff turnover. Tell your boss about it and I think he will agree.

Let us consider in more detail what criteria and requirements a good salary, a good remuneration system should meet, taking into account the points of view of both management and subordinates. Fixing these criteria can be a valuable guide for the sales manager, even though they are not absolute.

So good system. wages should:

1. Motivate sellers. The remuneration system should perform the function of stimulating sales personnel. It should encourage sellers to meet or exceed targets.

2. Control the activities of sales representatives. An effective pay system should act as an invisible controller of sales representatives, allowing management to better manage the activities of sales personnel. The wage system should provide incentives that are flexible enough to compensate for the effort put into solving such diverse tasks as full-time, "missionary" activities of salesmen.

3. Motivate for the correct treatment of customers. Today, companies are beginning to compete more and more precisely in the field of service provision. Good system pay is one of the factors motivating sellers to work correctly with customers, thereby ensuring their greater satisfaction. In other words, if only volumes are taken into account in determining wages, there will inevitably be a loss in service quality.

4. Be good enough to attract and retain competent employees. An effective payroll system is one of the surest tools used to build a highly skilled sales force. Because it allows not only to retain the best personnel, but also to attract new employees with valuable qualities and knowledge to the company.

5. Provide the employee with the opportunity to know in advance how much the salary depends on his efforts and how much he can earn. The employee must be aware of all the requirements for his work, and of all the rules that determine his remuneration. That is, how much and for what he receives. Otherwise, he will work in accordance with his own subjective ideas about the goals of his work and the decency of his leadership in assessing his work. And this, in turn, leads at least to a mismatch between the goals of the employee and the enterprise. It is precisely the clear informing of employees about the criteria for remuneration of their work that makes it possible to avoid such problems.

6. On time to meet the expectations of the employee. It is necessary to reduce the time between the receipt of the result and the payment of the bonus as much as possible. For example, performance bonuses that are achieved during the month should, as far as possible, be paid at the end of that month. That is, he did his job - get the money you earned. Nice spoon for dinner. But the performance of some workers can only be determined after a long period of time. It is also important to encourage such actions, but then it will most likely be a bonus at the end of the year. In any case, this must be done with a clear mention of the reason for the promotion.

7. To the extent possible adequately correlate with the efforts of employees. In most cases, the indispensable condition for receiving remuneration is only the achievement of certain results. This situation can be very contradictory and even conflicting. An employee can work very hard, make a lot of efforts, but at the same time achieve modest results and, accordingly, receive a low remuneration. It is imperative to take into account how the effectiveness of his work actually depends on factors that are subject to and not subject to him. For example, we considered the possible difference between different territories served by sales representatives. In one area, you can strain less, but the result is much greater than in another with more intense work.

8. To produce "natural selection" of the most hardworking and capable. That is, it must systematically encourage these qualities, their manifestations, and punish for others, so that there is a constant repulsion of the incapable and lazy.

9. Be both economical and competitive at the same time. That is, companies should pay employees as much as they earn. If companies pay more than employees earn, nothing good will come of it. The wage system must be economically justified. A company whose payroll costs are disproportionate to its revenues will either start to increase the price of its products or face a shrinking profit margin. Most companies, however, try to keep hospitality costs competitive. It is not always easy to strike a balance between economy and competitiveness.

10. Be flexible and stable at the same time. It should make it possible to receive both a variable income, depending on the results of labor for a certain period of time, and stable income. In other words - a fixed salary plus interest. The wage system should be flexible enough to meet the needs of specific salespeople as much as possible. Some companies use individual systems salary, where the sales representative can choose what percentage of his salary will be fixed, and what will be based on the results of his activities. Flexibility is also needed to accommodate product differences. Some items are in constant demand and can be ordered with frequent re-delivery. Other products are sold in a single copy and therefore require additional efforts, a creative approach to the sale, which is worthy of a separate encouragement. At the same time, the basis of the wage system must be stable. Only then can one expect from the employee at least some kind of attachment to the company, necessary for the successful achievement of common goals.

11. Provide the opportunity to receive a stable and rewarding income at the same time. Every wage system should provide employees with at least a minimum level. The principle of this provision is that the seller should not worry about how he can earn a living. If it's a bad month, or the company is experiencing a seasonal lull in the market, or the sales rep is unwell and unable to work for a while, then he should be making some kind of income. However, this permanent income should not be too high, so that there is no decrease in interest in incentive payments.

12. When used for the purpose of additional incentives, the salary should change by more than 10-15%. Otherwise, it will not be able to have a noticeable effect in terms of stimulation. This is how practice shows.

13. Do not include too many components in the variable part. If there are more than six components, then they lose their motivational effect. Sellers lose the connection between their actions and different components of wages, it becomes difficult to navigate them, to choose the most effective course of action.

14. Among the components, include also points of remuneration for collective results. General corporate bonuses contribute to the cohesion of the team, the coherence of the work of employees, and the consideration of the interests of other departments. Ideally, an employee should receive three bonuses:

for individual results, which stimulates his personal productivity;
for the results of the work of his division, which contributes to a good climate in the division and an increase in labor productivity;
for the results of the work of the enterprise as a whole, which contributes to the acceptance by the employee of the goals of the enterprise.

At the same time, it is necessary to convey to employees a simple truth: in the absence of collective results, the enterprise will not have money to reward high individual labor results.

15. Easy to understand. Simplicity is the hallmark of a good wage system. Simplicity and flexibility sometimes become conflicting goals - indeed, they are: a simple system may not be flexible enough, and a system may achieve adequate flexibility at the expense of simplicity. However, the wage system must be simple enough for employees to easily understand: they must quickly calculate their income. The manager's task in this case is to find golden mean, given the importance of both conflicting goals.

16. Be fair. A good pay system should ensure that all sales representatives are fairly evaluated. Nothing can so quickly destroy the positive attitude of an employee as the feeling that their pay is unfair. One way to ensure objectivity in valuation is to strive to use, as far as possible, measurable valuation criteria that can be controlled by vendors. But here, too, it is impossible to go beyond the reasonable, so as not to cause confusion.

17. To be effective in the period of time in which its components meet the requirements of the situation. The point is that no wage system can be effective in every situation. Each company should have a system designed for its specific purposes, relevant for a limited period of time. There may be considerable similarity in the general features of the systems used by different companies, but the details should reflect the characteristics of each company, as well as the specific situations in which they find themselves.

18. Developed by the company's management, taking into account the opinions and suggestions of the sales representatives and sellers themselves. Because sales reps are better, more enthusiastic about the pay system that management consulted with them in developing.

If you carefully go through all of the above points, you can pay attention to the fact that some of them take into account the interests of employees to a greater extent, while others take into account the interests of the company.

The main types of wage systems

The fixed salary is a fixed element depending on the amount of time the sales representative works.
Direct commissions are a variable element that depends on the results obtained when performing a certain amount of work.
Combined wage systems.

1. Simple salary system (hourly form or salary). The amount of payment depends on the unit of time, and not on the amount of work performed. Salary is a fixed element of the wage system. In each time period, the same amount of money is paid to the sales representative regardless of his sales volumes.

The advantages of this method. A permanent income guarantees an employee absolute confidence, stability and reliability. Accordingly, his loyalty and reliability, commitment to the company, satisfaction with cooperation with the company increase. The result is low staff turnover. This form of remuneration allows you to require sellers to perform various functions that are quite important for the company, but not directly related to the sale. For example, sales staff can spend more time on the interests of the client. That is, it can spend more time on each client, provide him with better service. As a positive touch, one can also single out ease of understanding. Such a payment system is the simplest and most understandable, which minimizes the likelihood of various disputes and misunderstandings.

The disadvantages of this method. A fixed salary is not a direct incentive for an employee. Although it is possible to compensate for this disadvantage by changing the size of the bet, which may well become an incentive. With this form of payment, it is difficult to evaluate the performance of an employee. It is difficult to link the amount of salary with different criteria that evaluate the performance of an employee. For the company, such a salary is a constant expense that does not depend on the profit received, on whether the sales volume decreases or increases. That is, they sold a lot - they paid, they sold a little - they still paid.

When is the best time to use this method? First of all, when management can effectively control and stimulate sales representatives. The following specific situations are examples:

sales reps are still in the learning phase or still too inexperienced to earn enough on a commission basis;
the company wants to enter a territorially new market or sell a new range of products, that is, when forecasting sales volumes is problematic;

2. Payment system based on direct commission payments. What is a commission? This is a regular payment for the performance of a certain amount of work. Sales representatives usually receive commissions in accordance with the results achieved on those parameters that are under their control, depend on them.

The choice of commission percentage may depend on:

the target income level of sales personnel determined by the head;
profitability of this particular product;
marketing difficulties specific products;
the type of customers attracted or served by the sales representative.

A higher percentage should be paid for the sale of more profitable products to stimulate their sale. The percentage of the commission can be constant for any volume of sales, or it can be sliding, increasing or decreasing as sales volumes grow.

The advantages of this method. It has a huge stimulating effect on sellers. Provides unlimited opportunities in terms of income growth, if not upper limit commission fees. It is a strong factor in motivating employees, encouraging them to work harder. It is easier to reject underperforming sales reps. It is a variable expense item for the company. Sold a lot - paid a lot. Sold little - paid little.

The disadvantages of this method. It is difficult to control and manage the activities of sales representatives in other areas not directly related to the sale. The dominant desire of sellers is the desire to sell as many goods as possible without taking into account the interests of the company or the client. Sellers focus only on goods that are easy to sell, and neglect the sale of difficult-to-sell products. Customers may be sold more than they need, including items that are not in the range they need or are interested in. Sellers are not interested in providing buyers with a high level of service. Since the firm does not provide a guaranteed income, salespeople tend to feel that they do not owe it anything. That is, loyalty and commitment to the company at a minimum level.

When is the best time to use this method:

When a company is in a vulnerable financial position and therefore, distribution costs should be related directly to the volume of sales.
When the sales representative starts to lose interest in the job and a strong stimulus is needed to achieve relevant sales figures.
When there is no need to exhort the product, provide customers with quality service, after-sales service.
When you do not need to develop long-term relationships with customers.
When a company uses part-time salespeople or independent contractors such as sales agents for manufacturing firms.

3. Combined wage systems. We considered two extremes: bare salary and bare bonuses. Now consider something in between - combined systems. Their mission is to overcome weaknesses using one method while maintaining its benefits.

salary plus commission
salary plus bonus (bonus);
Salary plus commission and bonus.

As you can see, all three options include the ratio of the constant and variable parts. Which part will be present as an element of encouragement, and which in the form of a fixed salary, should depend on the nature of the sales tasks and marketing goals of the company.

Now let's try to define terms.

A bonus (bonus) is a one-time payment for achieving above-standard indicators. The bonus cannot be used on its own, but must be applied in conjunction with another element, salary or commission. The most commonly used basis for calculating the premium is an assessment of the sales representative's performance against the plan. Fulfilled the plan - get a bonus. The plan (quota) for sale is target A assigned to a marketing unit for a specified period of time. A marketing unit can be a sales representative, affiliate, county or region, dealer or distributor.

The target can be expressed in terms of money, units of production, or sales activities. For example, each sales representative may be assigned a target sales volume for a three-month period, gross margin, or be tasked with meeting a customer's needs. Quotas can also be assigned for each type of product or type of customer. If sellers meet their quotas, they often receive some kind of reward or performance bonus. For example, a sales representative may receive a bonus in the form of cash Money in the amount of "X" for exceeding the quota in terms of sales by 10%.

Salary plus commission. It is used more often than all other methods. The question often arises: what part of wages should be made constant and what part - variable? Usually the variable part is 40% of the total remuneration. But one thing must be remembered. None of the options can always be good.

This type of pay offers the benefits of a fixed salary, as well as the flexibility and incentive effect of commission payments. But we must not forget that the introduction of elements of encouragement to the detriment of the fixed part of the salary may lead to a weakening of managerial control over sales personnel. That is, by increasing the share of commissions, you can increase the activity of sellers and sales volumes, while increasing the share of the constant part allows you to improve manageability and control. So salary plus commission is ideal when a company wants to keep its employees under control, but at the same time also wants to encourage their activity.

The success of a salary-plus-commissions system, or any other combination system, depends largely on achieving a balance between the elements.

Salary plus bonus. An ideal way to pay sales representatives if a company wants to keep its employees under fairly strict control, while offering them some element of encouragement. The difference here compared to the previous payment method is that the fixed part exceeds the variable part of the remuneration much more than in the "salary plus commission" system. The use of the "salary plus bonus" system is effective in stimulating some action in the short term. For example, if a company is interested in attracting new customers, incentivizing repeat orders, or intensifying outreach activities for a particular product.

Some companies use bonuses to help salespeople focus on long-term goals, such as improving customer satisfaction. Many companies use bonuses to reward teams for performance. If the team achieves its goals, then all team members receive a bonus.

Salary plus commission plus bonus. By far the most common system. It combines all three components - salary, commission and bonus. This allows, on the one hand, to ensure the presence of a certain level of control, at the same time to encourage employees and offer a bonus for solving special, specific tasks. An example of a specific form is base salary, commissions, and quarterly bonuses, which are calculated for each salesperson based on their customer satisfaction ratings.

4. Connection of method and goals. It is extremely important to link the system of remuneration with the achievement of certain goals.

Consider examples of goals and options for wage systems:

The goal is to increase revenue by 10%. To achieve this goal, as a rule, some form of encouragement is necessary, for example, a commission or a bonus.
The goal is to increase sales of specific products by 10%. In this case, it may be useful to pay commissions at higher rates, on high-margin products, or on any other goods in which the company is particularly interested in marketing.
the goal is to increase sales to existing customers. A bonus may be paid for increasing sales to existing customers by a certain percentage. The bonus can be tied to a repeat order quota. Alternatively, you can pay commissions at higher rates for repeat orders.
the goal is to increase customer satisfaction. The bonus is The best way accomplish this task, although a salary increase can be quite effective.
the goal is to stimulate explanatory activity. Explanatory activities may include training dealer salespeople, holding presentations or preparing exhibitions, expositions, and other activities not directly related to the sales process. Some of these efforts can be measured in individually and pay a bonus for their implementation. Effort that cannot be easily measured can be rewarded by increasing the share of salary in the total.
the goal is to invade new territory. Perhaps all income should be in the form of a salary, at least in the early stages of developing sales in a new territory.

Development of a wage system for sales personnel

There are 6 main stages in the development of a wage system:

Study of job descriptions.
Determining the goals of the wage system.
Establishing the level of wages.
Development of a method of remuneration.
Choice of indirect cash payment.
Putting the system into operation.

Let's consider each separately.

First stage. Study of job descriptions. At this stage, it is necessary to identify the nature, scale and possible difficulties associated with the implementation of each type of work. That is, to put it simply, what the seller must do, to what extent, for what period, so that the company agrees to pay for his work.

Second phase. Definition of specific goals. There are examples of general goals that are priorities that any wage system should strive to achieve. This is due to the fact that any company undergoes different stages its development, is experiencing different life cycles. Accordingly, at each stage, the company may face different tasks. For example, the exit stage new market. The next task is to cover this market. We solved the problem and covered the market, another task should be set. For example, increase sales to existing customers. The next task, say, is to expand the range of existing customers. After its solution - improving the quality of customer service, then - expanding relationships with customers, and so on. It is important to remember that there is a direct relationship between the tasks that the company faces and what kind of payment system the company uses. If a company's goal is to improve the quality of customer service, and it pays sellers a percentage of sales, then with the help of such wages this problem will not be solved. Why? Because if the sales representative receives naked interest, then the most important thing for him will be the amount of goods sold. He will sell to the maximum, as much as he can. And the quality of service will be the last thing to think about. After all, it does not affect his income in any way. In the same way, if a company wants to increase sales, but at the same time pays only a salary, then again nothing will work. That is, you need to understand that the system of remuneration that was effective at the previous stage will not necessarily be useful at the new stage. Therefore, there is a rule that says that wages cannot be good for every situation, always.

Examples of specific goals:

increase income by 10%;
increase sales of certain products by 10%;
increase sales to existing customers;
improve customer satisfaction;
develop sales in the new territory.

It is necessary to base the remuneration of each sales representative on those factors that are more under his control. Otherwise, at least the principle of justice will be violated, which will immediately entail undesirable consequences. Careful consideration needs to be given to the elements that a company can measure:

The more accurate the measurements are, the more effectively it will be possible to use the pay system as a factor influencing the success of the company.

Third stage. Establishing the level of wages. Under the level of remuneration is meant the average income of a sales representative for a certain period of time. The level of pay is in many ways more important than the method.

People are more interested in how much money they made than how they made it. Very often managers ask me how best to pay. I answer them that it is not necessary to start with this. How to pay is not so difficult to figure out. First, the manager needs to find out for himself how much he wants to pay, how much he can pay, and how much he will pay this employee. Only then you need to move on to the allocation of salary components, taking into account various factors and criteria. Only in this way you can not be distracted, do not forget that we are talking about a person who has certain expectations and, first of all, will pay attention to the amount of salary, and then to what it can consist of.

Therefore, one of the main factors of efficiency is that the work of sales personnel is paid at a competitive level compared to other companies.

Fourth stage. Development of a method of remuneration. Management has in its arsenal the following elements of creating a remuneration system:

the salary;
Commission;
bonuses;
indirect cash benefits (such as holidays and insurance);
reimbursement of expenses.

Some of these components are employee incentives, others guarantee stability and reliability of income, others can help the company control sales costs.

One of the main questions tormenting any leader is how to properly build a sales representative motivation system. Here we give an example of the wage system of one of the holdings involved in sales in the sector FMCG. Consider the city sales department.

The system of remuneration in the Department of City Sales of the Dairy Group of Goods

The salary of a sales representative is based on three components:

1) Salary (it is 20-25% of the total amount);

2) Payment for the increase in sales volumes to the base value adopted in the given territory in a certain period of time (it is 60-70% of the total amount);

3) Payment for work in a team under the leadership of a territorial manager, aimed at the implementation of the current tasks of the Company (may be 5-20%).

The basis for the calculation of salary is the data provided analytical department at the end or beginning of the month for the previous month. They are summarized in the form of a table in absolute and relative performance by deviations relative to the base periods, plans and their actual implementation.

The main criterion for the calculation of salary is the achievement of the maximum increase to the base value of sales volume. Actual performance and planned values may differ greatly. This is due to the fact that the base values change quarterly, taking into account seasonality, the emergence of new assortment items or their exclusion.

Now for the numbers:

The base salary of a sales representative is set at 10,000 rubles for everyone, regardless of length of service.
The formation of accruals for growth is formed as follows: the sales volume in the assigned territory in the current period is multiplied by a coefficient of 0.015. At the same time, each sales representative calculates the percentage of growth in his territory. In the aggregate, all the figures add up to a certain number, which is used to calculate the premium application coefficient (PPC). According to the formula adopted today, the amount payable to the sales representative is calculated. It should be noted that the checkpoint directly affects this amount. Negative growth entails an additional monetary penalty. A sales representative can obtain data on their sales volumes by requesting them from their territorial manager.

Negative or worse growth rates for 2 months serve as an additional basis for recognizing this employee as inappropriate for the position held.

Payment for teamwork stems from the general bonus fund, which is distributed among groups of territorial managers. They, in turn, distribute it among their sales representatives. This distribution of the fund takes place on the basis of the “Sales Representative Account Sheet”. It contains penalty and bonus points for specific indicators (see Appendix No. 2). This document is public, which means that the sales representative can review it.

The motivation of sales representatives is understood as his interest in the performance of certain tasks for an appropriate monetary reward from the employer. Competent and worthy motivation encourages the sales representative to do his job with great zeal. As a result, the company remains in the black, develops and grows.

Most often, the income of a sales representative consists of a stable salary and a variable bonus. Motivational activities refer to the bonus part of the salary of a sales representative. Consider the most common motivational activities.

Percentage of export

The amount of the bonus depends on how much the sales representative sells. Worthy motivation, provided that the supplied product sells well. The main thing is not to overdo it with shipments if your company sells perishable products. Otherwise, there is a risk of getting a huge return of expired goods later. Of the minuses of this type of motivation, one can note a decrease in the assortment (i.e., what sells best, the sales representative ships in tons, and, as a rule, forgets about expanding the assortment within a group of a certain product). In addition, this motivation is not profitable if the supplier company sells its product and additionally attracted products. The manufacturer may lose in sales of its own product if the “attracted” leaves better and faster.

Implementation of the sales plan separately for own products and separately for attracted

In this situation, the sales representative has to control both the shipments of his own products and the "attracted". This type of motivation, in my opinion, is most beneficial for companies that not only produce, but also sell own products on their own (through their staff of sales representatives). Usually this point of motivation is the main one in the bonus part and is about 40-60%.

Accounts receivable control

Not all companies pay their sales representatives money for the control of receivables, when payment for the shipment is made in accordance with the contract - no later than the specified dates. In my opinion, this is an oversight. Everything is simple. What does the Law of Trade say? Commodity-money-commodity. And the more often this cycle turns around, the better for the company. She is growing. Therefore, it is desirable to allocate about 20-25% of the bonus part to maintain the "receivables" in the norm. If the sales representative at the end of the reporting period has no overdue receivables or it is minimal, it is a sin not to give him a bonus for good work.

Opening of new outlets

One of the most useful motivations on the part of the employer. The logic is simple: the larger part of the market a company covers, the more significant player it becomes in the eyes of potential suppliers of new attracted products. Respectively, large companies can dictate their terms to suppliers and beat out for themselves Better conditions and prices.

Motivate sales representatives to open new outlets different ways. Someone pays a certain amount for each new point. But this is not entirely correct in relation to different sales representatives. After all, one trader has an active customer base (ACB) of 50 outlets, and the other has 100. Employment is slightly different, you see. Therefore, it is more expedient to allocate the same 20-25% of the bonus part for the development of the client base and set an individual plan for opening new outlets for each sales representative.

Coefficient useful action sales representative (KPD)

In this case, the efficiency is calculated in a different way - the number of orders divided by the number of visits, but otherwise.

Consider a situation where a company sells "its own" and borrowed products. In each of these categories there can be several groups of goods, and for "attraction" - also several suppliers. The company is interested in the fact that each outlet has the entire range of products supplied by it. 100% efficiency will be when all points are “loaded” within a month by all groups of goods from all suppliers.

For a number of reasons, such a situation is practically impossible if the merchant works with at least 50 outlets. But there is no limit to perfection.

The motivation of sales representatives in relation to KPI can be as follows. The ideal (100%) is the best efficiency indicator for the entire company for the previous month (for example, 70% of the maximum possible). Based on the results of the current month, it is announced who receives the bonus. You can set a minimum threshold, for example, a bonus is paid when 80-90% of the best result of the previous month is reached and above.

This is actually a very effective motivation. Tested many times in my own experience.

Motivation from the manufacturer and from the involved products

A competent leader always negotiates with his suppliers for promotions and motivations aimed at both outlets, and for sales representatives (individual plans for each for a specific manufacturer or group of goods).

It is useful to alternate motivational programs from time to time. Although this does not apply to the implementation of the shipment plan, which is usually increased from month to month.

Motivation of sales representatives is one of the most important tasks of the management of a company that wants to develop. After all, motivational programs provide an opportunity to earn money, and good trading rarely miss the opportunity to receive a bonus for completing additional tasks.

And how do you motivate your trading?

The original article is posted on the Torgovy.ru website

Want to know why your trading works for you? Pass.

The practice of material incentives

sales managers, sales representatives, supervisors, heads of sales services.

Methods for solving salary problems in trading companies.

- according to the materials of the publication:“STRIVE TO DO THE IMPOSSIBLE, or How to influence the sales staff” (Library of the journal “Company Management”, Publishing House “Agency “Standard”, Kyiv, 2005)

In the publication - the experience of companies:

G.R. - Methods and techniques of material incentives based on grades and planning KPI , construction of salary schemes, etc. are based on well-known concepts and algorithms, incl. and ideology of building a system LaMa -SOPOT.

Therefore, dwelling on the well-known is the same as proving to you that "the Volga flows into the Caspian Sea" ...

It is more important to deal with unsolved problems, dubious or low-tech methods of material motivation.

I will try to show by headings / methods how it is decided in the system LaMa -SOPOT:

Salesperson's planned salary

“...the payment system should correspond to regional specifics. To do this, monitoring of the level of wages in companies in regions with a similar system of work was carried out. ...the average level of the desired salary was determined, which was supposed to exceed the average in the region. The system should, on the one hand, provide each sales representative with a guaranteed minimum, on the other hand, provide an opportunity to receive higher wages under certain conditions.

"The digit salary system allows you to take into account the "classiness" of sales personnel"

G.R.- Well-known ideas and principles are stated that do not explain the algorithm for their translation into real wage figures. As the author of the notorious strong drink D.I. Mendeleev used to say, - The idea should work not “in principle”, but in a “metal casing”.

In SOPOT, "average level of desired salary" - The rate determined by the method of assessing the cost of a position ( E. Hay's grading technique), taking into account the average market price and converting points into a real planned salary (Rate) (see the methodology "Grades and Rates, PM GS"). Classiness can be determined not only by grades, but also - with a large step between grades - by the standard point difference in the assessment.
The salary plays the role of the minimum guaranteed payment.
Thus, the planned salary, i.e. Rate = Salary + Planned bonus.

Know-how of the SOPOT system: Salary is not the basis for calculating wages forKPI.
Base - Bet or any part of it.

“Our sellers do not have a fixed rate per se. The amount of their wages is affected by: the volume of sales (namely sales, not shipments), the speed of payment for goods and the percentage depending on the discount provided.

« “The volume of sales as the main indicator in the face of fierce competition does not work »

G.R.- About the problems of paying with a percentage of anything, read the article on the site "WHY IT IS NOT POSSIBLE TO PAY A PERCENTAGE OF SALES, PROFIT (COMMISSIONS)»

“What is wrong with the interest rate system? The seller begins to concentrate solely on what this percentage depends on. But after all, the work of sales managers is also monitoring competitors, analyzing the market, organizing promotions, which may not give any effect today. And if the agent determines everything by the percentage of sales, then he will never do what only takes time and does not increase sales.

G.R.- Golden words! ... It's a pity that we rarely hear this ... "Interest mania" in paying sellers firmly sits in top managers who started their business in the early "dashing nineties" (read the commentary article above).

Salesperson salary structure

“The rate is something inviolable, so it is better to vary the variable part.

G.R. - « The rate is something inviolable "- confused with Salary!

“... the success of the sales department or the entire enterprise does not always allow you to see an objective picture. The most objective assessment of the work of support staff can be scoring for the main performance indicators for each position and their degree of importance.

G.R.- «... the work of support staff can be assessed by an integrated score for the main performance indicators for each position and their degree of importance "- what can be the main indicators (KPI) from support staff?! Its task is to ensure the implementationKPIthe main - serviced by them - divisions! It is with their performance that you need to associate part of their Rate (~ 50%, because they influence the result more indirectly than sellers and are responsible for it). Accordingly, with EQUAL Bets, the “price” of each percentage of the result is half as much.

“... people whose work “does not bring money into the house”, but is directly related to sales staff. These are operators and sales administrators, logisticians, warehouse workers, forwarders. The volume of their work depends on the results of the work of sales managers, on seasonality, etc.”

“... it is good to tie bonuses to support personnel to the implementation of the sales plan, for example, 25% of the rate. You can encourage support staff to perform certain functions.

G.R. That's right. I would clarify: 50% - for the result of the main division, 50% - for the quality of the performance of their official duties(detailed in the section of the system: "QualitativeKPI»).

The salary structure of salespeople and theirKPI

«... successful examples an objective assessment of the personal contribution of "passive sellers" working in the hall of the salon-shop: wages consist of three parts. The most impressive, of course, is fixed. Further, the sales plan for its product category is taken into account.

“Another component is a “floating” premium for fulfilling clearly formulated and well-known requirements: the standard for section design, the correct display of goods, the absence of customer complaints, etc. Such a system is quite simple and understandable to employees.”

G.R.- Behind " fulfillment of clearly defined and well-known requirements » PLANNED SALARY is paid, i.e. Bid!
And for the violation section design standards, correct display of goods, customer complaints, etc. ." - the guilty person must be deprecated!
(See details in the section of the site “QUALITY OF WORK AND SALARY. Sanctions for violations of corporate and professional standards and rules")

Collective (brigade) form of labor organization

“...when calculating the variable part of the salary of retail staff, they are mainly guided by the fulfillment of the sales plan for the store as a whole. Thus, teamwork is encouraged, when everyone works for a common result and is well aware that due to failures of one, everyone can suffer. With such a system, a lot depends on the climate in the team.”

"The main meaning of such bonuses is team building and prevention of unhealthy internal competition."

“... bonuses for “general indicators” help to avoid a situation where one employee, improving his personal results, complicates the work of another. In addition, they are necessary to encourage teamwork.”

G.R.- Effective Form labor organization. We recommend that ~80% of the rates be associated with collective results (the plan of the section and / or store), and 20% - for the performance of their job duties (qualityKPI).

Motivation Efficiency

"...monetary reward must be significant, otherwise it will not motivate"

“Unlike field sales people, executives functional departments the fixed part in remuneration is always greater than the variable: at the level of 70-80% of all payments, for regional managers - at least 50%.»

G.R.- A 20-30 percent for what? For the implementation of corporate plans?
According to experts, barrier of the minimum value of the incentive bonus - 10% of the planned salary. So typical mistake when a small part of the planned salary is taken as the basis for calculating remuneration for various reasons. And if the real performance range is small (plus / minus 10%), then at a rate of CU 1000, the base for the result is CU 250. (25% of the rate) and as a result of 110% of the sales plan, the premium will be “already” 25 (!) CU. This is discrimination against any system of motivation... Each tool must be used skillfully!

Key performance indicatorsKPI

“... for an employee on a monthly basis plans are developed that take into account key goals and objectives. ...There should be no more than ten such goals. These achievements can be "sewn up" in the bet, or they can be encouraged separately. The advantage of these approaches is that they allow manual mode quickly shift the focus in work, which makes it possible to quickly respond to external and internal changes.

G.R.- for an employee, the KEY goals for the planned month should be no more than three, a maximum of four. That's why they key! In addition, in larger numbers, he simply will not be able to effectively navigate.
And most importantly, it will be simply impossible to build motivating priorities between them: in three tasks, the weights can be significant: for example, 0.5 - 0.3 - 0.2 (the sum of d / be equal to 1.0). And at ten? 0.1-0.2-0.3-0.4-0.5-0.6...?! They will simply be equivalent, and personnel management according to planning priorities (“ shift focus at work ) will be lost!

Monthly planning, priorities

“...the condition of the bonus was marginal profit. In the course of work, many shortcomings were found in it. ...managers began to earn more than twice as much, but this "rise" was not solely their merit.

G.R. - « was not solely their merit - But still, is there any merit to them? Then - the standard solution - the growth rate of wages should lag behind the growth rate of the result (see page "Managing the growth rate of wages" on the website). And - the problem is removed easily and simply ...

"... we do not quite fairly evaluate the work of sellers, encouraging them for something that is not the result of their work."

“For those whose activities directly affect the size of profits (for example, the sales department), the bonus part prevails ...”

"...sales manager incentives are based on margin, net income, and inventory turnover."

G.R.- Be afraid of tying salaries to profit for positions that do not affect it (for example, salespeople)! Or influencing indirectly, indirectly. These are the indicators of the company's top managers.

Progressive and regressive pay scales.

“The most common element of variable pay is the percentage of sales, which can be constant or vary (on a progressive or regressive scale). The obvious positive of the percentage is that it does not have a ceiling on salary growth.”

G.R. What is this "positive"? This is the payment of unearned remuneration (in any case, after performance at the level of 120% or more).

“Even those who completed the plan by less than 50% receive a bonus. For full performance, a full bonus is due, for its overfulfillment - an increased one.

G.R.- for personnel workers, we recommend (see the page of the site “Piece-piece wage system”) to start bonuses from 50%. Below is for beginners/trainees, when entering new markets and/or with new products...

“... at the start, very high interest, but as soon as the salary figures reach too high (in the opinion of the owners) level, the "clamping" begins. An alternative could be a fundamental change in the salary system: a percentage of turnover can be replaced by a bonus for the fulfillment of target plans. It is desirable that the existing amount of payments does not decrease. But line up new system necessary in such a way as to slow down their too rapid growth in the future.

"...incentives increase on a progressive scale."

G.R. - ... « clamping " (if necessary) you need to start not " once ", but smoothly, starting from the range of ~ 110% of completion, but not percent, but " target plans ».
You can also pay on a progressive scale ", but - again, up to a certain threshold of the result; and then - again smooth " clamping »...

"The calculation - on the "bonus calculator" - is a plate in Excel with individual settings for the bonus part of the salary for each employee."

G.R.- So-called. “bonus-calculator” is a stepwise dependence “Salary / Result” (in the form of a “saw”): “... from... to... percent..., over... to... -% and etc.”
The best way- a smooth increase/fall in wages forKPI(see on the website page "Managing the rate of salary growth")

“... employees will be able to earn 30% more than in previous periods, but for this they will have to improve their performance by 2.5 times.”

G.R.- What kind of planning is this, in which it is possible - in comparison with the previous period - to increase productivity by 250%?! So we will “catch up and overtake America” - the dream of N. Khrushchev. And even then, the fake “growth rates” were more modest: for the year we were planned to increase the results by “only” 40% (unheard of growth in the world ...)

Penalties for violation of corporate Standards

“The system, which provides for a significant part of the variable payment, allows the punishment in the form of depremises (fines) to be made softer - it’s just that a person does not receive the bonus.”

“A tougher form is a fine for overdue receivables. It can be a fixed amount or a percentage. For example, a fine of 2% (or 5%) of the amount of accrued wages if the debt exceeds the established limit (in money or days).”

"Factors such as labor discipline, appearance, timely reporting, etc. do not directly affect the volume of sales, but, nevertheless, are very important in the management of sales personnel "

G.R.- That's right. But! - if the Rate is paid for the implementation of plans by 100%, and not the Salary, i.e. obviously there is a variable part of the salary - the planned bonus for the performance of tasks. And if the Salary is the base (and for many it is so!) - why deduct bonuses? ... Because of this, managers are deprived of the opportunity to influence " labor discipline, appearance, timely reporting, etc. »

Salary forecasts

“..informing about the prospect of payments at the end of the month: people should see a “project” of their salary every week. With the transparency of the system, the degree of trust in it increases significantly.”

G.R.- Correctly noted. Moreover, it is important not only to predict your salary, incl. and taking into account planned priorities, but also to be able to top management to predict the annual maximum payroll for budgeting labor costs. (See page "Salary forecasts" on the website).

SUMMARY GR: In the materials presented, as in a mirror, the problems of material incentives and wages in large domestic trading companies were reflected. The LaMa-SOPOT system provides an exceptional opportunity to overcome them once and for all!