Tell Me Something I Don't Already Know
Here’s Mitch Little describing the reaction of sales prospects when he tells them how his sales force works: “They look at me like I have a hole in my head.”
Not the reaction you want on a sales call … or is it? Who in corporate life isn’t weary of hearing the expected? We all yearn for surprise; we all want to scream: “Tell me something I don’t already know!” So having people think you’re crazy might not be a bad sales technique.
What is it that Mitch Little, vice president of sales for the semiconductor company Microchip, says to prospects that makes them stare at him with incredulity?
He tells them that his salespeople do not work on commissions. He tells them: “We are the only noncommissioned sales force in the industry. We are here to serve, to help customers solve problems.”
Based on my conversation with him, I’m betting he’s certain to toss in, with feeling, this statement: “Our purpose is, one, to serve customers, two, to serve shareholders, and three, to serve one another.”
I’d heard about Mitch Little from one of my favorite business writers, Steve Chandler, who told me about the no-commissions sales and that Little had received an award from Selling Power magazine as its Global Sales VP of the Year.
No-Commission Strategy
Even so, I was skeptical about separating sales from commissions, suspecting that Little had created some euphemism to replace the word, leaving the monetary incentive in place.
However, when pressed on the subject, he responded that his salespeople are “no different than the design engineers or the marketing people. While there is a small percentage of income that comes from bonuses, those dollars are tied to companywide goals, to profitability and costs and so on.”
When asked how he keeps his salespeople motivated, he chuckled at my question the way one does when dealing with a slow learner. “We recognize the salespeople the same way you recognize normal people, the way you recognize any people for doing any job well.”
Salespeople as normal? Maybe the customers are ready to accept that, but are the salespeople?
Little replied: “The normal sales call has the customer mind-set of, ‘Tell me about your product, give me your lowest price and go away.’ We break down that wall. Once the customers understand that we really are there to serve, they start asking for our advice and our expertise. We become part of their planning process — ‘What are we working on five years out?’”
I wondered if top salespeople, the ones who’d succeeded under the old structure, would find this tedious or limiting. For instance, does he have trouble hiring?
“I’ve never seen it as a disadvantage,” he said, adding, “but we hire the right type of person — we don’t look for a cowboy who wants to do it his own way.” The result is very low turnover and surprisingly low costs.
Lower Costs, Higher Sales
Little said, “As a public company, I can see my cost of sales, as compared with competitors, and we’re in the lower half.”
How can you spend more time with customers and still keep your sales costs down? “We don’t have to waste time on the games,” he said. “My peers spend 40 percent of their time on figuring out how and what to pay, on arguing who gets paid or what.”
And it isn’t just sales managers’ time spent on the games, of course: Add in all the time typical salespeople spend calculating commissions, plotting how to get credit for sales and checking the reports from headquarters to make sure they got everything they were entitled to.
In fact, if you’ve been a salesperson, or worked around them, just think of the time spent daydreaming about commissions, sitting with the calculator and working out, “If I sold ‘X’ Company ‘Y’ amount, that would mean I’d get ‘Z.’” Take that time, convert it to helping customers, and you’d see a transformation in the profession.
So that just leaves one last question, Why isn’t everyone doing away with commissions?
Little reminded me that he makes no secret of the strategy and its success: “I give a dozen talks a year, and some of my peers say, ‘I’d love to do it that way, but my management won’t try it.’ That’s because most management thinks that the only thing that motivates salespeople is greed, and if that doesn’t work, nothing will. They’re wrong.”
Then he laughed and added: “It’s a huge, huge advantage. I hope my competitors don’t figure it out.”
Dale Dauten is the founder of The Innovators’ Lab. His latest book is “(Great) Employees Only: How Gifted Bosses Hire and De-Hire Their Way to Success.”
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