Expedient Consultants

KV's ChanakyaShaala┬« 

The Right Compensation

The biggest problem which small entrepreneurs face is marketing. And among various components of Marketing, attracting, retaining and handling sales force is the problem almost every small entrepreneur faces. Whenever I suggest small entrepreneurs to employ quality sales force, their standard answer is “Let’s appoint sales persons/sales agents who can sell our product on commission basis or on small salary plus commission basis”. And my counter question to them is “Which came first, egg or hen”?
Sales is the only function of an organisation which generates revenues. Rest all the functions are expense heads. Then why be frugal while appointing sales persons? Chanakya says that if the treasury (funds) is inadequate, salary may be paid in kind like forest produce, cattle or land, supplemented by a little money. However in case of virgin lands, all salaries shall be paid in cash until the affairs of the village are fully stabilised. All small enterprises are like virgin lands, and it is the duty of the entrepreneur to develop such virgin land. You can grow and taste the fruit if and only if such land is ready to grow fruits. 
Promoting the products of a small enterprise with a lesser know brand is the most difficult job for a salesperson. We at Expedient Consultants conducted a comprehensive research on this subject. Most of the sales persons preferred to join leading organisations where lesser push/effort is required to sell the product. Sales people who normally are available to join a smaller organisation are the ones who either don’t have the capability to join a bigger organisation, or the ones who join the smaller organisation as a stop gap arrangement. People in the second category are often found missing from their allotted sales territories on Wednesdays, when new jobs are advertised in Job Columns. One of the other main reasons for their joining the leading organisations is financial stability. This aspect as per the sales persons is missing in smaller organisations. 
When a small organisation starts looking for sales persons, their job should be to market their organisation to capable sales persons rather than to choose among the lesser capable / cheap salespersons. And the only way they can do so is by offering attractive fixed salaries, better then the leading organisations. When a capable sales person joins a small organisation, he brings along with him his selling skills/ experience as well as contacts. Effort of the smaller organisation should be to establish their product on the basis of previous goodwill of the salesperson. I have experimented this with many of my clients in small scale, and the results have been excellent. 
Thus, my advice to all the entrepreneurs in small scale is to keep a spare budget for sales force. Attract and employ quality sales force. Spend on them for the first two/three years even if the output is less. Pay them good fixed salaries, and try to use their goodwill to the maximum. Once a name has been established for the organisation, only then start the trend of paying them with a mix of fixed salary and incentives. Till then it will be almost impossible to retain them. 
© Kujnish Vashisht, Expedient Consultants

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