If you have the personality type and drive to be in sales, congratulations! Sales can be a very lucrative and rewarding field. As you move forward in your career, pay attention to how your firm’s sales staff is managed. The decision your sales manager makes can have a long-term impact on your career success.
Over the years, I’ve noticed a trend with the sales departments in some companies that can lead to the departure of talented salespeople, which can damage their careers. By the way, some firms refer to sales as business development, so either term works. Consider this scenario:
- Jill sells medical supplies for a large company. She is paid a salary, plus a bonus on her sales totals. Her bonus can be 50% to 100% of her base salary. She is given a 3 state region in the Midwest. Historically, the salesperson in the 3 state region has generated $1,000,000 in sales per year.
- In her 4 year after taking the position, Jill generates $2,000,000 in sales. Her sales manager assigns one of her 3 states to Bob. Since Jill has been so successful, the firm asks Jill to train Bob. Jill and Bob travel the state together, so Bob can meet the customers and understand their needs.
- 2 years later, Jill is producing $1,700,000 in sales in her smaller, two state region. Management assigns one of her two remaining states to Sally. Again, the company asks Jill to train Sally, which she does.
- In her first year with only one state in her region (her 7th year with the firm), Jill produces $1,200,000 in sales.
Jill’s sales in her 7th year are 20% higher than in her first year with the firm ($1,200,000 vs. $1,000,000). Imagine what Jill’s sales totals would have been if she had kept the three state region for 7 years?
This salesperson gave up a lot of sales (and income) by losing part of her territory. How was Jill compensated for giving up two thirds of her sales territory- and for training two new salespeople? I’ve seen this problem in sales organizations for years. If management doesn’t address this problem on the front end, they end up losing good salespeople who are frustrated by this process.
If you’re a successful salesperson, you may find yourself in this situation. Here are some ideas on how to handle this issue and ensure your career doesn’t suffer:
- Before an interview: When you’re interviewing for sales positions, do your homework. Research the company and find out how they manage and compensate salespeople. Ideally, use your network to find a salesperson in the organization. Ask that person how the firm handles sales territory issues.
- During the interview: When the interviewer asks if you have any questions, bring up the sales territory issue. Maybe you say: “Once I’m assigned a sales territory, how does your firm assign sales territory to new salespeople?” A smart sales manager will compensate the successful salesperson for giving up part of their territory and training a salesperson. That might include commissions on their old territory for a period of time. As the new salesperson grows the business, the former salesperson gets rewarded financially.
- At the company: Once you’re at the new sales job, get the “lay of the land” from the other salespeople. Confirm with them how a sales territory is reassigned.
It’s true that a salesperson may grow their business to the point that they can’t meet the demands of their entire client base. At that point, it’s reasonable to bring in another salesperson. However, management needs to compensate the successful salesperson for the growth of that sales territory. Make sure you understand your firm’s policy on this important issue. It can be the key to your sales career.