My friend and fellow blogger, Anne Clelland, reminded me recently that I had asserted a universal truth about salespeople. She challenged me to post it so others might refute me, so here it is (Rule Number Two, below), and more. Comments are open. I'd love to hear your opinions.
There are exceptions to the following rules, I'm sure, but not very many IMHO. I'm willing to risk stating them in boldface type; but I've done dumb stuff before. Here goes...
Number One: For purchases that involve personal risk of any sort, people prefer to buy from other people. Personal risk takes a variety of forms, of course. The cost of the item relative to the financial resources of the buyer is almost always a discriminating factor. The look and feel of a publicly visible item as compared to the buyer's self-image also plays a part. And so on. The point is this. Buyers want to trust an actual person to be selling something that will not harm or seriously disappoint them. And they want someone to blame if the deal goes sour.
For most prospective entrepreneurs this means that you probably have a human sales force in your future. Given that, I recommend that you pay close attention to the other two rules.
Number Two: Commission salespeople are perfect optimizers of dollars per working hour. They all adopt behaviors that maximize their income for whatever time they choose to invest. If they sell multiple products, they will bias their energy toward the ones that have the highest potential return to them. Salespeople who do not act in this manner commonly find it useful to make fresh career choices.
The bias of the sales force is useful information for you, the business owner. If your sales force ignores one of your products, it is probably a dog, or at least badly priced. Or the commission rate is too low. Or the sales cycle is too long.
By the way, any salesperson who is not on some sort of commission is really just an order taker, and should actually be replaced by a "computer network with pretty graphics."
Number Three: Commission salespeople typically do not maximize their total income. Unlike teenagers at a pizza buffet, they stop when they are full. They do follow Rule Number Two and maximize dollars per hour invested in selling. But when they have made "enough" money, they take off and play golf. The definition of "enough" varies widely, of course; but the phenomenon is real. They want the time on the golf course more than they want the extra money. Behavioral psychologists call it satisficing. They are maximizing their happiness per hour.
Some companies fight the golf option by increasing the commission rates at higher levels of sales. Others simply accept it and hire additional salespeople.
So - what do you think? Have you observed these same behaviors?
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