There they are, rockin in their cars. You pull up to the light next to your best sales associate and see them just a singing!
You both get to work at the same time and as you walk into the store, turn off the alarm; you finally ask “So, what station do you listen to so intently in your car?”
“Oh, I listen to WIIFM five days a week.”
You respond with “Hm, WIIFM, never heard of that station. What is it?”
“All of here at the store listen to it. Surprised you never heard of it. WIIFM stands for What’s In It For Me!”
Sales staff responds to rewards. Many jewelers think rewards (aka commission) brings out hostility in people. You’d be surprised how many people help you in your life are on commission and you don’t even know it. They are trained that way.
Recently conversed with a jeweler who paid what he thought was a good wages, good benefits and treated this staff member “like family”. Need to go home early? No problem? Need to go to kid’s recital? Of course! We’re family.
But you can’t “spend” family at the grocery store.
My question was “Does the associate have any way of earning extra money?”
“Yes, we give bonuses.”
“If I work for you, how much of a bonus can I earn?”
“You don’t earn them; it’s based upon how well I think you’ve done this year.”
That’s not an incentive plan, that’s a gift.”
One store I visited had a low closing ratio. We moved old merchandise into a sale case to get rid of it. I asked them if they got compensated to sell the older merchandise. The answer: “Nothing extra, just their regular commission.”
Sales staff needs an incentive to do something they don’t want to do. Selling old, outdated merchandise is no fun. I usually like to increase the commission in selling old merchandise. But the sales manager told me he likes spot cash better and it worked to move old merchandise in the past.
“Let’s do it!”
So we came up with this one spiff plan to sell from the old case:
- Sell anything in the case, up to $300 and that night we will pay you in cash $25.00.
- Sell anything in the case, from $301 to $500 and that night we will pay you in cash $40.00.
- Sell anything in the case, above $501 and that night we will pay you in cash $50.00.
People like to get rewards instantly, not wait until the end of the quarter.
This store pays a good commission rate and also has monthly goals for the staff. Very organized in this way. My question:
“Does the staff get anything extra if they sell more than their goal?”
No.
SO we immediately instituted this addition to their plan:
- If you exceed your goal by 20%, we will increase your commission by 20%.
So here’s how it looks. Let’s say they are paid an hourly wage plus 5% commission. If the sales goal for the month is $20,000 a 5% commission pays $1000.00
If they exceed the goal by 20% (they sell $24,000) we’ll increase the commission rate from 5% to 6% (that’s a 20% increase).
So the commission on the $24,000 in sales would be at 6%, or $1440. At 5% it would have been $1200. That’s an extra $120 for doing better than expected.
For an extra $120 you got the staff to give you an extra $4000 in sales. Win/Win.
I’m betting as a jewelry store owner you also listen to WIIFM!
David Geller
Director of Profit
www.JewelerProfit.com
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