“I bet your sale staff listens to WIIFM in their car going to work
every morning”
There they are, rockin in their cars. You pull up to the light next
to your best sales associate and see them just a singing!
You both get to work at the same time and as you walk into the
store, turn off the alarm; you finally ask “So, what station do you
listen to so intently in your car?”
“Oh, I listen to WIIFM five days a week.”
You respond with “Hm, WIIFM, never heard of that station. What is
it?”
“All of here at the store listen to it. Surprised you never heard of
it. WIIFM stands for What’s In It For Me!”
Sales staff responds to rewards. Many jewelers think rewards (aka
commission) brings out hostility in people. You’d be surprised how
many people help you in your life are on commission and you don’t
even know it. They are trained that way.
Recently conversed with a jeweler who paid what he thought was a
good wages, good benefits and treated this staff member “like
family”. Need to go home early? No problem? Need to go to kid’s
recital? Of course! We’re family.
But you can’t “spend” family at the grocery store.
My question was “Does the associate have any way of earning extra
money?”
“Yes, we give bonuses.”
“If I work for you, how much of a bonus can I earn?”
“You don’t earn them; it’s based upon how well I think you’ve done
this year.”
That’s not an incentive plan, that’s a gift."
One store I visited had a low closing ratio. They moved old
merchandise into a sale case to get rid of it. I asked them if they
got compensated to sell the older merchandise. The answer: “Nothing
extra, just their regular commission.”
Sales staff needs an incentive to do something they don’t want to
do. Selling old, outdated merchandise is no fun. I usually like to
increase the commission in selling old merchandise. But the sales
manager told me he likes spot cash better and it worked to move old
merchandise in the past.
“Let’s do it!”
So we came up with this one spiff plan to sell from the old case:
-
Sell anything in the case, up to $300 and that night we will pay
you in cash $25.00. -
Sell anything in the case, from $301 to $500 and that night we
will pay you in cash $40.00. -
Sell anything in the case, above $501 and that night we will pay
you in cash $50.00.
People like to get rewards instantly, not wait until the end of the
quarter.
This store pays a good commission rate and also has monthly goals
for the staff. Very organized in this way. My question:
“Does the staff get anything extra if they sell more than their
goal?”
No.
SO we immediately instituted this addition to their plan:
- If you exceed your goal by 20%, we will increase your commission
by 20%.
So here’s how it looks. Let’s say they are paid an hourly wage plus
5% commission. If the sales goal for the month is $20,000 a 5%
commission pays $1000.00
If they exceed the goal by 20% (they sell $24,000) we’ll increase
the commission rate from 5% to 6% (that’s a 20% increase).
So the commission on the $24,000 in sales would be at 6%, or $1440.
At 5% it would have been $1200. That’s an extra $120 for doing
better than expected.
For an extra $120 you got the staff to give you an extra $4000 in
sales. Win/Win.
I’m betting as a jewelry store owner you also listen to WIIFM!