Pressing sales reps to stretch themselves beyond simple volume-based sales incentives not only yields better long-term results for the brand, but also helps transform reps from simple functionally-focused assets to strategic-selling powerhouses. Here’s why and how.
Far too many beverage producers continue to focus their sales incentives on depletions/cases sold. This in spite of the mounting evidence suggesting focus on leading indicators is superior to focus on lagging indicators. The difference between leading and lagging indicators is something we’ve covered in detail in a previous post earlier this year. To reiterate why this rear-facing focus is best replaced by a forward-looking one, let’s examine the facts.
As an incentive, “deplete ‘X’ number of cases of Brand ‘A’ during time period ‘Y’ seems like a legitimate goal. It is specific, measurable, achievable, relevant and time bound. This is why it is such a popular sales goal among suppliers. Yet, many brand owners and executives report this strategy falls short when sales numbers come in. This is because the way these numbers are made is not sustainable. It erodes profit and does nothing to increase the long-term health of the brand.
GreatVines’ Tim Jones says, “The right way to goal sales reps is to focus on the leading indicators of success. Incentivize the behaviors and activities that are your brand’s strategic sales drivers, rather than the lagging indicator of number of cases sold. This ensures the cases are sold in the right way.”
Jones shares experiences from his years as a young beverage sales rep and market manager which colored his perception of the industry and prompted him to work towards the goals that would one day inform the GreatVines Beverage Selling Solution. Jones recalls, “Back in my days as a rep, I made lots of great bonuses and cashed in on incentives that were volume based. It wasn’t until I was given responsibility for not just the immediate results, but the longer term success of a company, that I developed an appreciation for the right way to sell cases. Keep rewarding your sales people. Just don’t be afraid to focus those goals and incentives on the leading indicators!”
Tim responded to the argument put forth by some suggesting that sales reps wouldn’t be receptive to incentives based on leading indicators such as:
- Displays installed
- Drink Menu features
- Staff Trainings conducted
- Retail Ads and Catalog Features
- POS Placements/Merchandising
- Cold Box placements
- Target/Key Accounts Sold
“Good sales people will work hard to achieve their goals” says Jones, “even if they aren’t volume based. If a rep expresses displeasure at being asked to achieve these qualitative goals, it can be indicative of a poor work ethic and help to isolate poor performers on your team. With the proper strategies, tools and processes in place, sales will execute these activities, the brands will sell through and the volume will come. The numbers do not lie and your sales reps will quickly embrace the strategy once they’ve tasted the success it drives!”
For more detailed information on how to incentivize sales reps using leading indicators, check out GreatVines white paper, “Not Just More, but Better Sales – Moving Beyond “Depletions” as the Measure of Sales Success”.