The Problem with Safety Nets
I was watching David Rubenstein interview Noubar Afeyan, the co-founder of Moderna, when David asked Noubar why so many start-ups were founded by immigrants.
Noubar replied that if you were uprooted from your home, especially forcibly as he was from his native Lebanon, you have no sense of entitlement. He said that a sense of entitlement is only possible if you are rooted.
It’s an interesting thought: those have a sense of entitlement are less likely to be motivated to optimize their performance. Entitlement gives rise to dependence. Disadvantage evokes self-reliance.
I’ve experienced this myself.
When I was doing sales coaching as my side-hustle, my results were poor. My corporate job was a safety net, and as long as I had it, I didn’t make a true effort to drive business on my own.
Once I left my corporate job, I woke up with entrepreneurial terror every night, but that made me motivated. As a result, my revenue the first month on my own was more than twice what I had brought in during a year of side-hustle.
The Success Slump
The truth is that your team likely has a number of safety nets they cling to. This is especially true of successful salespeople. Once they earn enough money to be comfortable, they are less interested in the steady diet of rejection that prospecting brings.
This often leads to sales slumps.
The Success Slump is one of the top sales leadership concerns I hear from clients. Things like:
- Our senior salespeople are comfortable in their current accounts.
- A rep who made $250K two years in a row, doesn’t seem motivated to go to $500K.
- Our firm just had its best year ever, so everyone on the sales team is coasting.
While you can’t take away your team’s safety nets, you can change the game.
The Solution: One Example
I worked with a company in which salespeople get paid a small base salary. They have to prospect to create new accounts, but once they get a customer, they get an annuity that lasts as long as the customer does.
Eventually, they hit a tipping point where they have enough income that they no longer want to do the grueling prospecting.
As a remedy, the president changed the compensation plan so that it allowed them to get their annuities, but only if they made a minimum new customer goal. If you have a month where you go below the minimum, you didn’t get your annuities.
This change caused a lot of griping, but no-one quit, and it immediately fixed the problem.
Note to owners:
The fact that the compensation plan is renewable annually is important. While I recommend a simple, well-thought-out and stable compensation plan, you are not perfect. Business conditions change and you need to be able to make adjustments.
Note to first line sales managers:
If you don’t control the compensation plan, consider what you do control, such as territories. If senior reps may say servicing their current customers is a full-time job and they don’t have time to prospect, let the too-busy sales person know you will help by reducing their territory.
If you need help shaking up your team’s safety nets, or getting through a sales slump, please give me a call at (703) 966-0192 to discuss options.