The relationship between distributors and sales staff often revolves around one word: 'money'. Sales staff think: 'It's so hard and tiring, give us more money!' Distributors think: 'Give as little as possible!' The same issue of money, handled differently, leads to vastly different outcomes.

As year-end approaches, some distributor friends called me to ask why it's hard for bosses to retain sales staff in modern enterprise management. So I told them three stories about distributors and sales staff, hoping they would be helpful.

Story One: Breaking Promises Leads to Mutual Destruction

After a busy year, at year-end settlement, a young salesperson was entitled to 30,000 yuan in sales commission as per the original plan. He was happily planning to have a lively New Year. But when he asked the company to pay, he found the boss hedging, first saying the company had cash flow problems, then saying the commission percentage was miscalculated, and was unwilling to pay promptly. Just then, the company asked him to collect a payment of about 30,000 yuan. The salesperson, in a fit of pique, collected the money and refused to hand it over. This led to arguments and eventually a physical fight, ending up at the police station. The outcome was predictable: the young salesperson was sentenced to prison for embezzling company funds, and the boss, who broke his word, was abandoned by clients and employees, and his business quickly collapsed. Truly, breaking promises leads to mutual destruction. It's a pity that a good company was ruined over just 30,000 yuan due to the boss's dishonesty and the salesperson's ignorance of the law. How to prevent such economic disputes?

First, when salespeople join a company, they should sign labor contracts and commission agreements with the company, so that in case of disputes, there is factual basis. They should not act impulsively, which could harm themselves and their future. They should know how to protect their legal rights while also obeying the law.

Second, as a boss, building a company is not easy. In today's fiercely competitive market, every step forward is difficult. If a good salesperson works hard all year and earns 30,000 yuan in commission, they must have made significant contributions to the company. The boss should not only pay the deserved remuneration but also give rewards. Breaking promises not only loses excellent sales talent and loyal employees but also loses customers and market share, leading inevitably to total failure.

Story Two: Lack of Communication Leads to Talent Loss

Another salesperson had signed various work contracts with the company and received the corresponding sales commission as stipulated. Of course, no one knew the hardships of traveling all year, the sacrifices made to sell the company's products, and no one cared. When he collected his commission from the accountant, he also handed in his resignation to the boss. The boss was surprised: 'I paid every penny I owed, and I kept my word. Why resign?' People aim higher. When the boss asked why he was leaving, the salesperson replied: 'Through a year of independent market operations, I have learned rich sales and market management experience, sold millions of products for the company, and the company has given me corresponding compensation. But now there is a company I think is very good, and they want me to be a manager. Because I can now operate independently, I believe I will do well, as that company has a bright future and offers a higher salary. So I choose to resign.' Losing a salesperson familiar with the company's business processes is a loss, but worse, he took a batch of loyal customers with him to join the competitor. An excellent salesperson, after a year of frontline market training, is a valuable talent resource. Due to poor management, letting him go and training talent for competitors is the most foolish and failed management. The boss regretted it deeply! How to retain excellent sales staff? Consider these four aspects: career retention, emotional retention, position retention, and compensation retention.

1. Career Retention

Good career planning plays an important role for salespeople. We should learn from large multinational companies. For example, Microsoft is the company that attracts and retains talent best in the world. The HR department has a 'career ladder' document that details all possible positions for employees from entry level upward, along with the required skills and experience, including corresponding salary levels, so that employees know their career path and goals from the start.

2. Emotional Retention

Modern enterprise management focuses on people, especially sales staff, because they have high turnover and work away from home for long periods. Companies should maintain regular contact and strengthen communication with them, understand their difficulties and hardships, such as their living conditions and whether they have money, and do their best to support them. A simple phone call on an employee's birthday or holiday can show the manager's attention and respect, implementing 'people-oriented' management with warmth and retaining sales staff with genuine care.

3. Position Retention

The deep-rooted 'official rank' mentality in Chinese culture makes high-performing salespeople constantly aspire to promotion: salespeople want to be supervisors, supervisors want to be managers. So for outstanding performers, 'confer titles' and give them honors and praise. For example, companies can establish titles like 'Sales Elite', 'Gold Salesperson', 'Sales King' to encourage others. For excellent managers, adding 'Chief' to their titles is also acceptable.

4. Compensation Retention

Money is the basic condition for survival and motivation for work, and it is the 'hardware' for attracting and retaining talent. The more capable and experienced salespeople should receive higher compensation. Salary reflects the value of talent and is the material motivation for salespeople to perform. Although salary is not the only factor in retention, most people believe higher wages are more attractive. An effective salary system can continuously motivate salespeople to work actively and achieve good results. For example, use the 80-20 theory: reward the top 20% of excellent salespeople, put pressure on the middle 60%, and dismiss the bottom 20% of poor performers, establishing a reward-and-punishment salary system.

Story Three: Management Skills, Moving People to Stay

A salesperson in his thirties, to sell the company's products, did not go home for a whole year. At year-end, he returned to the company, achieved the highest sales, and won the title of Sales Champion, very happy. According to the company's commission rules, he should receive 30,000 yuan. But after the celebration, he only got 10,000 yuan. He was furious and planned to talk to the boss, have a big argument, and then slam the table and leave. Just then, the boss invited him to a New Year's dinner. When he hurried to the hotel, he was stunned: in the private room, besides his parents and wife and child, whom he hadn't seen for a year, there was no one else. The boss smiled and said, 'Come, come, you've worked hard, let's have a nice reunion dinner.' Then he said to his parents, 'Thank you both for raising such an excellent talent for the company. On behalf of the company, I express deep respect to you! Here's 10,000 yuan for you to have a good New Year.' Then to his wife and child, he said, 'I'm sorry, the company hasn't cared for you enough. This 10,000 yuan is for you, to reward you, because you have a good husband and a great father, but he spends too little time with you!' At that moment, the salesperson couldn't hold back his tears and said, 'Boss! Don't worry, next year I will still be the best!' Humanized management and heart-to-heart communication are deeper applications in management. This boss not only used sincerity and trust in modern life but also skillfully applied management art to the fullest. This is what we should learn today.

The three stories are told, and the three events seem similar: all about bosses, salespeople, and sales commissions. But three different approaches led to completely different outcomes.

The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in November 2017. The conference will closely focus on the theme 'New Forces, New Ecology', inviting 1000+ distributors, 500+ brand owners, 200+ B2B platform founders, and 100+ investment and financing institutions to jointly explore new chapters of cross-border integration!

Core Topics of This Conference:

  • How can the FMCG industry achieve new growth opportunities through B2B?
  • How should the new supply chain behind new retail be built?
  • How can intra-city logistics help B2B achieve leapfrog development?

Highlights of This Conference:

  • The industry's first '2017 China FMCG B2B Industry Competitiveness White Paper'
  • Case sharing of excellent transforming and upgrading distributors
  • Upgraded conference + exhibition, with Hall 6 Internet Technology Exhibition strengthening connections
  • Leaders from well-known enterprises in various fields, including Alibaba Retail Link, Global Logistics Properties Finance, Eternal Asia Supply Chain, Best Store Plus, Yijiupi, and Haiding, will give speeches and share pioneering views.

Registration is now open. Long press the QR code below or click 'Read Original' to register.

Add friend with note 'Conference Registration'.

Click the link below to review the highlights of the first and second FMCG + Internet conferences:

2016 'FMCG + Internet' Summit Forum

-END-