Should You Pay Building Product Reps for Performance?

Posted On: 
Oct 9, 2017
Should You Pay Building Product Reps for Performance?

“Pay for knockouts, not for punches. Pay for sales revenues generated, nor for sales calls made. Pay for packages delivered, not for miles driven,” says author Jeffrey Fox in his book How to Be a Fierce Competitor. Should your company be paying for outcomes or activities? Let’s examine a few scenarios.

Brand Awareness

Some product manufacturers still used the tired old marketing method of placing ads in magazines. In a previous post, we discussed why magazine ads are worthless and have the worst ROI for manufacturers. Is that $5000 fancy ad that you just paid for going to magically persuade the top specifiers in the country to select your product? Think again, buddy. Should your marketing and sales team be paid bonuses for the amount of ads they buy in magazines? Or should they be paid bonuses based on brand awareness that has tangible metrics that anyone can analyze and wrap their brain around? Bottom line- ditch magazines, newspapers, and anyone who says you should invest your hard-earned dollars in such misguided misadventures.

There are several winning alternatives compared to magazine ads that will rot in landfills. If your company seeks significantly higher ROI, then online courses and webinars are your answer. A AIA continuing education, course will outperform a magazine ad any day of the week. In addition, an online AIA course provides metrics such as the participant’s name, email, and other contact information. Why would anyone in their right mind blow $5000 on a magazine ad when they could spend half that amount and educate 300 architects in an hour about their product? As P.T. Barnum once said, “there’s a sucker born every day.”

Performance Is Outcomes

Jeffrey Fox states that “performance is outcomes, not the activities that cause the outcomes. Hours open, sales calls made, miles flown, time invested, seminars given, products sampled, are not outcomes. They are business-getting activities, actions, tactics.” Fox brings up an example we can all relate to. Don’t pay a house painter $50 an hour to paint your house. Pay for the painted house.

Building product reps need to have their performance goals clearly defined. Product reps that perform, generate revenue for the company, and obtain new customers should be rewarded. Performance is not how many contractors a product rep visited. Performance is not how many bids went out. Performance is not the number of requests for AIA lunch and learns. Performance is outcomes.

Rewarding performance will shine a light on the real stars in a company. Paying the best performers motivates other team members to step up their game. If you can’t perform, then you better find a different job than peddling paint, insulation, or heated towel racks. If your company has a bunch of unmotivated, lazy, sales guys that spend more time sitting at their desk playing fantasy football than hitting the streets, shaking hands, and locking down specs, then they need to walk the plank. Management needs to praise and encourage the star performers in a company. Rewarding the star performers will only create more. Does your company reward sales and marketing employees by performance or activities? What obstacles has your company experienced motivating product reps to perform?

For more information or to discuss the topic of this blog, please contact Brad Blank