BY: TONY MISURA
In the September LBM Journal, the 2014 Sales Compensation and Benefits Study was released, giving business professionals a look at how other dealers manage compensation, benefits, employee pay structures, insurance plans, and more.
From my perspective as a recruiter, there are a lot of factors that go into compensation numbers. Since sales reps generate the revenues for many LBM dealers, let’s take a good look at what the study means for business owners looking to grow their business—ultimately from the standpoint of retaining or recruiting additional sales talent.
Above anything else, it’s crucial that owners understand there should be a clear economic alignment between the sales role and the company value proposition to their customer. This is often difficult for owners to embrace.
So, what steps can you take to gain objectivity to your true competitive advantages and disadvantages? The outcome of the process is to create and understand your unique talent value proposition, which will define your compensation position. The first critical step is to know your competition and in what areas they are strategically and tactically better.
So what is it that you must know?
The following questions are key:
• Market share. How much of the business in your market is your competition getting? How much of it is to builders, how much to remodelers, and how much to DIYers? Since margins can vary widely for these different customer segments, customer base is a key factor.
• Resources. What is your competition doing to provide salespeople with the resources, like insides sales support, estimating and credit/collections, that enable them to set their company apart from other competitors?
• Responsiveness to customer needs. Does your competition have the resources and flexibility to individualize the services it provides to customers, such as installed sales, boom trucks, truss and manufacturing plants?
• Financial stability. Does your competitor’s financial position enable it to truly take advantage of emerging opportunities?
• Culture and values. Would your competitor’s salespeople say that the company values its employees? Is it a place that they love coming to work?
• Compensation. Compared to the competition, are your salespeople the highest paid, the lowest, or somewhere in the middle?