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Many distributors find their biggest headache is often not development issues, but personnel management. The most prominent personnel issues are talent attrition and passive work attitudes.
So how can distributors deal with salesperson resignations and underperformance? How should personnel be managed?
Compensation Constraints
Implement sound compensation management to eliminate the hidden dangers of short-sightedness among employees.
Currently, the typical salary structure for salespeople at distributors is: monthly base salary + monthly sales commission + annual bonus. In terms of proportion, base salary is usually low, sales commission accounts for a larger share, and the year-end bonus is quite generous.
The distributor's reasoning is that base salary is just a basic thing; the bulk comes from sales commission, so salespeople have to work hard to ensure a certain overall income. If the base salary is raised and bonuses reduced, salespeople might slack off. At the same time, the year-end red envelope also serves as a constraint, making employees less likely to jump ship.
Bosses often have a fixed mindset: "You do this much, and I'll give you that much," while most salespeople think, "You give me this much, and I'll do that much." This is like the chicken-and-egg question—hard to say who is right or wrong. But different mindsets lead to different behavioral outcomes, planting hidden dangers in many aspects.
So how should compensation be managed?
Consider adding market development factors to the salesperson's salary structure, i.e., monthly base salary + monthly market development bonus + quarterly sales commission + annual performance bonus. After establishing the monthly base salary, focus that month's assessment on the salesperson's work in market development, such as customer development and visit frequency, customer relationship management, and execution of promotional activities.
Market development tasks may not directly impact sales in the current month, so also assess and reward the salesperson's cumulative sales for the quarter, making them feel the returns from earlier market development. The virtuous cycle of monthly market development plus quarterly sales encourages salespeople to think more long-term and holistically.
Of course, this assessment method requires dedicated personnel to verify market development progress, which often means the boss must personally get involved, forcing them to invest time in understanding the market and channels.
Retaining Talent Through Career Opportunities
(1) Career Planning for Employees
Sales is a great training ground. For employees with insight, ability, and dedication, they often grow quickly in a short time. However, when employees grow, the positions of department manager or deputy general manager are still occupied by founding members or family members, leaving little room for employees to showcase their skills. In such cases, they can only "fly high" and seek platforms that are higher, broader, and more aligned with their career planning goals. So, salesperson turnover is often not due to their own reasons but lies with the boss and the company.
What should distributors do then?
- "Sell" employees at the right time
For employees with ambitions and clear career plans, we cannot keep them in a small, stagnant position for long. Instead, we should create larger positions for them. This is highly beneficial for future cooperation and for motivating other salespeople.
- Training to stabilize morale
Chinese people generally value job stability, which is why many want to work for large companies. In fact, some large companies pay low wages, but people flock to them because they won't go bankrupt in the short term. If distributors can regularly provide training for salespeople, it will likely increase employee trust in the company.
A white liquor company in Henan does this well: every quarter, they hire professional trainers and marketing experts to bring distributors and their salespeople to Zhengzhou for training. Whether it improves employee quality is debatable, but this practice greatly improves the attitudes of distributors and salespeople. The liquor company's image has evolved from a partner to a trusted leader for distributors and salespeople.
- Changing employee status
Distributors can spin off a business segment for a talented individual to manage; they can invest as a shareholder or partner in a new venture to let a talent showcase their strengths; or they can dilute their shares appropriately to give a talent a stake, transforming them from working for themselves to co-owning a business.
(2) Igniting Work Passion
Some employees who stay in one place for over a year may show signs of underperformance and lack of enthusiasm. At this point, the boss needs to inject vitality into the work to stimulate employee motivation.
(3) Discovering Potential Needs
Distributors should note that salary is not the only need for salespeople. In addition to necessary compensation, salespeople have other needs, including respect, trust, value realization, opportunities, and generous rewards.
A county-level agricultural distributor implemented a points reward system for employees, which worked well. The distributor gives points for extra work; at a certain number of points, employees can receive rewards. For example, with 20 points, they can take two days off, as for many long-working employees, time off is the best reward; at 50 points, they get a travel opportunity.
A software company's management model is also innovative. Every morning, employees can get a fruit at the front desk. Employees queue up for fruit, which not only fosters camaraderie but also allows those in a bad mood to be influenced by happy people, maintaining high work spirits.
Small things in life can motivate employees; the key is whether they are used effectively.
(4) Finding Employees' Strengths
The most effective motivation is putting the right person in the right job.
Some people don't work just for work's sake; they want to realize their value and gain social recognition. If the boss can act as a "Bole" (a talent spotter), it will surely inspire gratitude in employees.
(5) Clever Use of Benefits
Few distributors give salespeople benefits beyond salary, and if they do, it's just some damaged goods from the warehouse or an extra hundred yuan. In fact, giving a small benefit every month reflects management wisdom. Few employees are satisfied with their salary, and benefits can compensate from a non-cash material perspective. Additionally, giving benefits can satisfy employees' sense of pride in the company.
(6) Beware of the "Three Don'ts" in Motivation
Of course, distributors should also pay attention to the "Three Don'ts" in motivation: don't overdo, don't repeat, don't spoil.
"Don't overdo" means incentive measures should not go overboard, or they lose their effect.
"Don't repeat" means distributors should flexibly change incentive measures to keep employees fresh.
"Don't spoil" means not to pamper employees; incentives should not become an inevitable rule.
There is an old Chinese saying: "Kindness cannot lead troops," meaning being too merciful is not suitable for leading soldiers in battle. Motivating employees is necessary, but everything has a limit; excessive motivation is no motivation at all. This is like a leader occasionally treating subordinates to dinner to boost morale, but if this occasional behavior becomes routine, and one day the leader suddenly stops, subordinates will say, "The leader didn't treat us today; that's not nice."
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