Presentation on theme: "Happy Sales People = Happy and Healthy Sales Numbers Jennifer Perna Vice President of Sales Blue Plate Catering."— Presentation transcript:
Happy Sales People = Happy and Healthy Sales Numbers Jennifer Perna Vice President of Sales Blue Plate Catering
Overview How to Motivate your Sales Team Encourage Growth Develop Performance Based Compensation Structures Have Positive Numbers Hit the Bottom Line
About Jennifer Studied Hotel and Restaurant Management Hotel Catering Background Off Premise Catering –Salesperson – six years – sold $2.5 million peak year –Sales Manager – seven years – average annual growth 20% –Independent Sales Consultant – 2 years –Vice President of Sales – 5 years
About Blue Plate Company Overview Sales Team Composition –Sales Consultants –Event Producers –Roles and Responsibilities Develop Individual Sales Goal Reviewed by VP Sales and Approved/Modified Develop Sales Implementation Plans Manage Individual Expense Budgets Manage Venue Relationships Sell, Produce, Attend Events Goals range from $500k – $3 million based on experience
Analyze your Existing Compensation Structure Have you been Compensating the Same “Just Because” Has the existing package retained your staff –What is your turnover ratio? –Do you ask people why they leave? –Do you have people that never leave? Do you feel your plan is fair – and does your sales team? –What does your sales team ask of you? –Do you know what your competitors are paying? –Geographic considerations – what is the norm?
Analyze your Existing Compensation Structure Is it individual based or group based –Do your sales stars stay if group based? –Benefits of individual based As a manager/owner – how do you feel about the comp plan? –Do your salespeople have a year end W2 higher than yours? –How does that make you feel? –Can you actually change the plan – and if so – what will happen? –How will you explain and are you willing to share numbers? How open are your books to the sales team?
Developing Individual Performance Based Compensation Plans Traditional Compensation plans – Advantages/Disadvantages Salary –Budget friendly –Candidate pool wider – traditional hiring process –Doesn’t pay for performance – tenure based for compensation increases –Safest plan for sales person –Goals important but not relevant to compensation
Developing Individual Performance Based Compensation Plans Traditional Compensation plans – Advantages/Disadvantages Salary plus commission –Hiring process more traditional –Safe plan for business and sales person –Encourages and rewards for growth –Goals defined
Developing Individual Performance Based Compensation Plans Traditional Compensation plans – Advantages/Disadvantages Commission with Draw –Define draw = loan –Allows salesperson stability –Pays on individual performance –My favorite for off premise catering –Encourages individual goal development and annual growth
Developing Individual Performance Based Compensation Plans Traditional Compensation plans – Advantages/Disadvantages Commission only –No “payroll” risk to company –For sales sharks –Should be higher percentage than commission plus draw due to individual risk –“Own the business” mindset –Difficult to project goals –Part time options/Independent option –No benefits to employee
Design Non Financial Motivators/Rewards Weekly Sales Sheet Woo Hoo s –Achieving Year End Goal –Big Wins Contests –Miles for Trips Blitzes with Instant Rewards –Gift Cards –Trade with Vendors Flex Time
Profitability Guidelines in a Competitive Marketplace and Building Your Team Work Backwards – stars with your annual budget Spending time with CFO/Accounting What is the company profitability goal and how does the sales team fold into that?
Profitability Guidelines in a Competitive Marketplace and Building Your Team What is profitability %? 10%? 15% –What is net revenue goal? (after commissions and discounts) –How much should the sales team cost? Define a percentage that works in net profitability after all operating costs and is based on net revenue (range between 8-12% before taxes and benefits) –Example –Company wants 15% net profitability with 10% annual net revenue growth; Sales for year 2013 were $5 million
Profitability Guidelines in a Competitive Marketplace and Building Your Team How to Develop 2014 Model Net Revenue Goal $5.5 million Net Profit $825,000 Sales Team Compensation Budget based on 8% = $440,000 Sales Team Compensation Budget based on 12% = $660,000 How do you “spend” the budget and how do you achieve $5.5 million??? –Where are your sales people pacing now? –Where were they in 2013? –Are they capable of more growth? –Does the Existing compensation plan work as is? –What are your existing commission percentages now? –Does that include event production support? –Do you want to build the team?
Reasonable Growth Expectations Factors –Geography –Company History –Company Capabilities –Market Segments –Company Initiatives New Salesperson (1-2 years) 50-75% first few years –$250,000 - $500,000 goal year one –$375,000 - $875,000 goal year two –$600,000 - $1.5 million goal year three Established Salesperson (3-5 years) 10-25% annual –$750,000 - $2,000,000 Seasoned Salesperson (5+ years) 0-10% annual –$1,000,000 - $3,000,000
How to Broaden Your Sales Team Base Year one salary – company investment Year two salary plus commission Budget Network Build from Within
Remember Happy People, Making People Happy Jennifer Perna Vice President of Sales Blue Plate Catering