'Tis the Season for SandbaggingTweet
Its worth repeating my post from last December about the December Sales Problem.
December is a hard sales month for companies for several reasons: The month is really only 2.5 weeks long before your prospects shut down. Budgets are often used up. Vacations make it hard to get deals done. Prospects are more focused on their Holiday party then they are on your solution, etc. The list is long, and very intuitive why its hard to get sales done. However, as I’ve posted before, December can actually be an amazing month for sales.
But very often the biggest December sales problem is inside your own company… Its the sandbagging sales team. Get into the mind of a salesperson for a minute… Sales plans typically reset in January, and each salesperson is in one of two camps.
The first camp has already made quota, and wants to make quota next year – and even though they are probably in accelerated commissions right now – want to make sure they hit quota two years in a row – and set themselves up for accelerated commissions next year as well as any challenges and bonuses that may come along. In other words, they’ve already impressed you this year and in the “what have you done for me lately” mentality – they are already thinking about next year.
The second camp hasn’t made quota, and probably doesn’t see a way TO make quota in this hard month. So, they sandbag the deals until next year. These sales will be recorded and then their quota will re-set in January. Since they were below quota this year, they know that they have to crush next year or risk their jobs – so they too, will be thinking about next year.
What this means is that NOBODY is thinking about December. None of your sales team really cares about December. They have moved on to the next year.
So… what are you to do? Take this thought process into consideration and be creative about how to solve it. In last year’s post I offered some suggestions that I’m going to repeat:
- Sales challenge for December. Put a big carrot out there for achieving a particular goal in December. Cash is best since you are combating the thought of cash for next year but a trip or other prize can work as well.
- Increased commission rate. This is a simple but effective one. Bump all commission rates up in December in order to negate the sandbagging.
- Quota Relief for the following year. Another idea which can be successful is to offer quota relief for the following year based on sales in December. So, perhaps you drop a person’s next year quota by $0.25 for every dollar they sell in December. This makes it easier for them to hit their accelerators in the next year.
- Immediate payment. Typically salespeople have to wait to get commissions. I’ve heard of some companies offering to pay immediately on December sales as an incentive because in January they will wait on the payment scale. (This can create issues for customers that don’t eventually pay – which is why I’ve never done it – but I figured it was worth a mention because it was mentioned to me)
The challenge of avoiding sandbagging salespeople in December is a very tough one. As business leaders and entrepreneurs, we want the best numbers we can get in December, and for the year. As salespeople, we want to bring in sales in a way that can maximize our personal income. Marrying these two ideas is always the compensation challenge and in December this is a bigger problem. I’m certainly curious to hear about how other people have solved the problem.