BY NICK BROWN
When it comes to motivating credit union sales teams, there’s still nothing that quite measures up to a carefully thought-out and well-structured sales compensation plan. If your CU is looking to improve its sales results, these strategies will help your compensation plan accomplish the purpose intended of it.
Recently I connected with a credit union that was looking to improve its sales results. The leader I was speaking with lamented that sales in the past had struggled significantly, and while the CU was doing better now, there was still much room to improve.
Knowing that opinions of what great sales look like can vary in the industry, I asked this frustrated leader to define for me what “struggled significantly” meant. “Well,” he said, “for example, a few years ago we hadn’t sold a single GAP policy for an entire year. So we decided to up our incentive to $100 and see if that helped the team want to sell better. The next year we sold one.”
My next question was: Are you still offering that incentive and are you hiring?
Seriously though, as sales leaders, haven’t we all been there? We have a struggling team and we think, Well maybe if I just increase sales payouts, I will get better sales results! Unhappily though, we often learn that increasing payouts alone rarely leads to increased production for a struggling team.
Sales compensation and sales team motivation can be a complicated topic at times. So why do we still use them? The fact is that carefully thought-out and structured sales compensation plans are one of the best tools we have as sales leaders to universally motivate our sales teams. They have stood the test of time, and despite efforts to disprove their legitimacy, they continue to produce results. That being the case, let’s explore a few things you can do to help your credit union’s compensation plan accomplish its purpose.
Understand Sales Compensation Strategies for the Different Performance Levels
The reason my credit union contact’s incentive strategy did not work is because it failed to appeal to the level of sales employees he had. For any sales team, you will typically have three categories of sales employees, who are differentiated by their level of sales production. They are:
- Star Performers: salespeople who are always exceeding goals, targets and expectations
- Core Performers: the majority of most sales teams whose production tends to meet expectations
- Laggards: the bottom of the sales producers who tend to be satisfied not reaching expectations either consistently or never
According to Thomas Steenburgh and Michael Ahearne in their 2012 HBR article titled “Motivating Salespeople: What Really Works,” “Some salespeople have greater ability and internal drive than others, and a growing body of research suggests that stars, laggards, and core performers are motivated by different facets of comp plans.”