Tom Hopkins -
is world-renowned as The Builder of Sales Champions. His selling skills and sales strategies have helped millions of sales professionals and business owners in industries from A to Z to serve more clients, make more sales and earn millions in income. He has authored 16 books
including: How to Master the Art of Selling
, Selling for Dummies
and his latest release, Selling in Tough Times
What is the biggest sales compensation mistake that companies make?
TH: The biggest compensation mistake is not really a compensation mistake. It’s a hiring mistake. Too many companies hire people who are comfortable earning the base income they offer. Those people see anything above the base as gravy. They are not motivated to increase productivity over and above the base. It’s better to hire people for whom the base is at least a little uncomfortable to where they’ll be ready and willing to stretch themselves to earn the income they really want. By hiring those who are content at the base pay, the company has made it too easy for them not to perform.
There has been very little innovation in terms of compensation structure for sales professionals. Usually it's commission, quota, bonuses for exceeding quotas. Do you know of any new compensation models that our readers might want to consider?
TH: I can’t say that I’ve seen much change in this arena. However, one strategy that has been successfully implemented is to handicap the members of your team to where it’s not always the same 20% winning all the incentives or contests. With an effective handicap system in place, even the folks on the bottom 20% of revenue generation have the potential to receive recognition during incentive periods and contests.
Sales agents will always be motivated by profit. But what non-monetary incentives do you find effective for improving performance of sales reps?
TH: One of the greatest motivators of the sales personality is recognition. Ken Blanchard & Spencer Johnson
are known for a quote about catching your people doing something right. Acknowledge those actions one-on-one and during company meetings.
Hiring sales agents is a relatively simple and straightforward, but building an effective sales team is not. Can you share some tips and tricks for companies who are about to starting building their sales department from the ground up.
TH: Many companies I know of use a mentoring system early on so the business owner or manager doesn’t have to do everything with new hires. By having an experienced salesperson welcome and onboard a new agent, there is a certain natural bonding that is likely to occur which will strengthen the team as it grows.
What are your favourite free sales tools?
TH: I’m hesitant to recommend one over another as any free training is great in that it allows users to determine if the style of the trainer or training company is compatible with their selling style. Once a good match is made, the salesperson is likely to then move on to the fee-based sales tools.
What resources, books, blogs, podcasts can you recommend to our readers who'd like to learn more about sales team management?
TH: One of my personal favourites is Sales Management I & II by the late, great J. Douglas Edwards. Mr. Edward was my personal mentor in the field of sales and sales management. I used his ideas to build a #1
sales team of my own once I moved into management. I also have an audio program on sales management titled, How to Gain, Train & Maintain a Dynamic Sales Force
. In it, I explain the actual strategies I developed as a sales manager, above and beyond what Mr. Edwards taught me. Other good resources for sales management material that I’m familiar with are the works of Lee B. Salz
and Keith Rosen
Thank you for the interview.