When Owners or Managers Take or Run Sales Leads (with commissioned reps)
In my career, I have dealt with multiple owners/managers who chose to take and/or run sales leads. Most were in small, family-owned businesses, but a few were in multimillion dollar ones as well. In some cases, I knew why, in others, I simply had to ask why.
This blog will delve into the causes and effects of Owners & Managers running leads over a commissioned sales team.
I attempted to try and explain to each of them, that every decision they make as an owner or manager, will impact the team either positively or negatively. Here are many of the reasons why they were doing what they were doing.
Greed: I found this to be the MAIN reason they did it.
They all had comp plans that gave them a nice base, some/most also received overrides on the sales. But they couldn’t resist the urge to “Cherry Pick” a juicy lead here and there. The newbies or reps that were there just for a job, either didn’t realize the ramifications or simply didn’t care. But the savvy, experienced reps there for the money, saw exactly what was going on.
One owner told me he hated Web Quotes (quote requests sent in from the web page) but he regularly took the very largest, and/or most popular product ones for himself. He actually said, “If I sell it, I don’t have to pay commission on it.” Amazing.
In another case, reps were restricted to how low they could quote a system. If they didn’t close the appointment during the in-home appointment, the sales manager tried to hide the fact that in some cases, he’d call the appointment back THE SAME DAY and offer the rep’s client a lower price to get the sale and the commission! Only a rep who followed up on his leads would have caught this corrupt exercise.
Lack of rep performance
When there’s a smaller company and the rep isn’t performing/hitting quota for whatever reason, the management may believe they have to step in and take up the slack. I’ve had reps myself where I had to do just that. The difference is, if I was forced to run the lead, it became a house account. If I ran it with a rep, even if I closed it, the rep ALWAYS got the commission.
Starving the rep out
Many companies won’t admit to this practice, but it happens none the less. When wanting a rep to quit for a multitude of reasons, under performance, disrupting the team dynamic, or the manager feels threatened by a more qualified rep (see The Peter Principle) etc. and not wanting to pay out unemployment, they reduce either the amount or quality of the leads, or both, given to a rep. When this happens, mismanagement of leads distribution will cause additional leads to be ran by management. Many inexperienced reps will simply think leads are slow not knowing any better. The pros will know almost immediately and start looking.
Simple Ignorance
The business owner/manager, not realizing the dynamics of what they’re doing, will run leads because they can, they want to, or they like to. Thinking, it’s my company, I’m allowed to do whatever I want with my leads. True that. You could also scream at reps until they cry. Not saying you won’t lose good people or get sued, but sure. It is your company.
That said, It’s my decades of experience that say many owners/managers simply don’t know what they don’t know. I’ve watched as ignorance, pride, arrogance, you name it, get in the way of their own success. One company, who had been giving the “choice” leads to a favorite rep, promoted that rep due to their success. Unfortunately, being handed leads didn’t equip the rep to manage. And their creation drove the company into the ground within 18 months. Sad.
It’s my opinion that many small to medium business owners look at the short-term ramifications of their actions/decisions, and not the long-term effects. It is why we created Sales a la Carte. There’s a scripture (now, don’t go getting all offended because it is, just try and focus on the concept) that says:
I Corinthians 10:23 New King James Version (NKJV)
“All things are lawful for me, but not all things are helpful.”
All things are lawful for me, but not all things edify.
So, to paraphrase, just because you can or have the right to do something, doesn’t mean it’ll be helpful, build-up or encourage someone. It in fact, may do just the opposite. Please look at the long-term effects of what you’re doing.
OWNERS/MANAGERS NOTE THIS
When a seasoned rep misses quota or the next commission tier by 1 sale, and also knows that his manager has taken and sold 6 deals in his area that month, it creates animosity, loss of respect, resentment, ill-will, etc. towards the manager and the company for allowing it. If you’re an owner and want to say, “But I didn’t know my manager was doing that!” I would say, “Then, you’re a poor manager of your manager. It’s your job to know. It’s your company.” Sorry, no sympathy here. You very well may just have a greedy manager in place, and THEY WILL cost you good reps. Newbies won’t know the difference and professional, seasoned reps won’t tolerate it for long. They’ll leave and find a company who is actually vested in their success.
Sales reps can be quite different from other types of employees. The good ones have certain traits and demeanors that may require a special type of management to get the best performance out of them. When you require reps to bust their butts out there every day for the company, only to watch as YOU, the manager/owner takes the “Lay-down”, the “pushover” or a referral, what do you really expect to happen with any rep with the slightest degree of self-respect or self-worth? Exactly. They’re on the way out. You just don’t know when, and apparently, don’t really care.
Tell you what, if this looks and sounds like you and your company, it’s cool. Just don’t complain when turnover spikes, and your numbers go down. Sound fair?
For the other Owners and Managers, if success matters, if the emotional health of your sales team matters, then I suggest doing some inner reflection on YOUR motives if you’re doing this or allowing this practice at all. If you are, why not have a frank conversation with your team about what they think about it. But if you REALLY want to know, find a way to get anonymous feedback and take it to heart.
It’s your company, your team, your bottom line and as always, your choice. You can do this!
Sales a la Carte – “Just the help you need, and nothing you don’t”
