I’ve been traveling a lot and have seminars scheduled for 5 of the next 6 weeks. That’s more than ever, as we on-board a whole bunch of new stations to our UPGRADE Selling® program. It’s an exciting time for our company, but working last week in the Midwest on a -20 degree day wasn’t my idea of a great time.
While I’ve been on the road, I’ve been thinking about several unrelated things. Here are some quick thought starters:
– The article in the trades asking how Cox reps can survive had to be a bad day in their offices. First, their Raycom stations got sold to rep-less Gray. Now, there’s speculation that Katz will likely get a lot of the Tribune stations after they’re purchased by Nexstar. That can’t have gone over well with the good people in that company, especially since the Cox TV stations are also up for sale. Consolidation makes me wonder if the entire rep model will be changing pretty drastically over the next few years. Every rep pitch I’ve ever heard talks about their efforts to develop business. I’m guessing that for a rep firm to survive, they’ll have to prove they’re actually doing that for their stations. Like our stations, they’ll have to become better at creating business instead of just negotiating avails. I’m also guessing at least one major group will take their national sales in-house. They may have a model like Gray or build their own company-focused infrastructure, but I’m pretty sure the world in the rep business is going to change.
– How’s your culture? Are people having fun? This week, I got a picture of an entire sales staff at a ski area on a Wednesday as they celebrated making Q1 Local budget by Feb 1. This is the proverbial “chicken and egg” question. Did they decide to celebrate after making budget? Or, is having a culture that celebrates and has fun the reason they’re making budget. My sense is that it’s the latter. And, I’m guessing a huge percentage of the people reading this might fight the idea of celebrating on a workday. I’d encourage you to re-think that. This station is creating a culture that attracts, not repels, great people.
As we fight to get good people, and more importantly, keep them… we must pay attention to our culture. Applause, excitement, and fun are the principle motivations of 70% of our sales teams. It’s easy to have those things go AWOL when business is challenged. Celebrate victories and have fun. Then watch the word of your great culture travel quickly, which will make it easier for you to attract the best people in town.
Let’s go skiing!!!
– One of the most common questions I’m asked is about AE pay plans. What’s better—all commission, salary and commission or just salary? I have to be honest. I’ve been all over the map on this subject. I hate salary-only because, as an old sales guy, I think it takes away the motivation that supposedly happens when you know your income depends on your success. But, I’m not sure commission-only works – for two reasons: #1 – younger people entering our business are scared by that model. Since we’re competing for great people with companies that aren’t straight commission, I think this means we may end up with applicants who aren’t as strong as we need. Reason #2 – a commission model can restrict management’s ability to move accounts around. I see this all the time. A great seller loses one of their largest accounts to a new agency. We want to keep them happy. So, we’ll either have them follow the account to the new agency or we’ll try to move stuff that keeps them whole. That never seems to work. Over the last few years, I’ve gravitated to favoring a salary-plus-commission model. The salary is different for all and is based on some percentage of their transactional business in the previous year. The commission is paid for the things we really need: new business, digital sales, growth in existing clients (based on their formal documented efforts), sports, and specials.
I do have to admit that I think our great people figure out a way to win no matter how we pay them. I like that. I think we need to be the greatest place to work for people who are extraordinary and a not-so-good place to work if you’re only average.
– Speaking of how we pay our people. One of my pet peeves is what I call the “accidental raise.” That’s when an AE’s income gets a huge bump because a client on their list gets active, or an agency they work with lands a big account. They make a boatload more but didn’t do anything to help create that business. So, they get in a comfort zone, and all of a sudden, their motivation to do new business slips. How does your pay plan eliminate the accidental raises?
– The missing piece in most new business plans? Not measuring the right things. It’s critical today to not just measure the new business results, but also look at # of presentations, closing percentages of all new biz presentations made in the last 60 days, and average first order, which directly impacts churn. Let’s teach that to our sales managers. After 90 days, I promise you that a manager can instantly diagnose the new business challenges of their team. Some AE’s don’t have enough asks. Some are weak closers. Others don’t ask for enough money to have any shot at getting a renewal. Some have a combination of all of them. If you can’t measure it, you can’t manage it.
– My last new business thought for this week: every station I’ve ever worked with knows their number. How much does a client need to spend per month for 3 months to get results that give us great odds for a renewal? If your number is $7500 per month for 3 months, why are you paying a new business commission on orders way below that. You’re paying too much for business that’s almost guaranteed to not come back. This defeats the entire purpose. If I were King, I’d pay an even higher new business commission for orders above my churn level and no extra new business commission for orders that don’t stand much chance of renewing.
– The legendary speaker/trainer Don Beveridge used to talk about the difference between D/K and D/E. D/K stood for a deficiency of knowledge. D/E was a deficiency of execution. He maintained that lack of knowledge was seldom the issue. Most of us know what to do. It was all about execution. It’s my sense that the next decade in our business will be all about execution. Next decade? How about the next year?
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