Many store managers face the problem of staff burnout who work on the sales floor. Previous motivation schemes for salespeople - “salary +%” no longer work today, and therefore new ways are needed to motivate employees to work better, more and sell more effectively. SR expert in fashion business development management Maria Gerasimenko shares her knowledge and tells what motivation schemes are effective today, how to implement a new motivation program and accustom a sales team to it.
General Director of Fashion Advisers, business coach, expert in the field of management and development of fashion business. Main areas of activity: building business processes in the fashion industry, assortment matrix management, visual merchandising, sales and service management, development and implementation of loyalty programs.
Online school: school.fashion-advisers.ru
Clients often come to us at Fashion Advisers with something like this: “The salespeople are burned out. They don't have the slightest desire to work. They simply guard the goods and reluctantly respond to customer questions. We tried to hire others - a month later everything was the same! What to do?" To my question “What is your motivation program?” I get the answer: “Like everyone else – “salary + percentage”!”
It seems to the manager that he has given the seller a bait, and he becomes almost a business partner. However, in reality everything turns out to be somewhat different.
“Salary +%” in the language of an employee sounds something like this: “The main thing is that you go to work and be in the store, and there, come what may, if you sell something, you will receive X% of sales.”
Such a payment scheme for work is a relic of the past. What should we replace the usual scheme with, and most importantly, how to implement a new motivation program with minimal stress for the team? We'll talk about this in this article.
How much should employees be paid?
The volume of the wage fund (WF) is determined based on the economic model of your business. In other words, the entire turnover is 100%, they include: purchase of assortment (30-40%), rental of retail space (20-25%), marketing (5-10%), logistics (3-7%), taxes and, of course, wages. The weight of the store team's salary usually ranges from 8-15% of turnover and includes payment for all elements of the motivation program.
The exact weight of the payroll relative to the store’s turnover depends on the economic model, seasonality and regional salary levels.
IMPORTANT! If you want the best to work on your team, I recommend studying the salary range in your region. The salary in your company should be at least 10% higher than the regional average.
Thus, if the store’s turnover is 1 rubles, then about 000-000 rubles will be the wage fund, which you will subsequently distribute between the store manager and sellers.
Typically, 20-30% of the payroll is the manager’s salary, and 70-80% is the salary fund of the sales team. If your store does not yet have a manager, then in any case there is a person performing his duties. This could be a senior salesperson or yourself.
Elements of the motivation program:
1. Salary is the “fixed” part of the salary that an employee is guaranteed to receive. It is tied only to the number of hours worked and nothing else. Of course, there should be a salary, but you won’t get far on salary alone.
2. Sales plan - it is impossible to reach the goal if you don’t know where to go. “Sell as much as possible! I believe in you, you can do it!” - this no longer works. Specificity and accuracy are needed.
To do this, you must have a plan for store performance indicators: a sales plan in rubles, pieces, conversion, average complexity of a receipt, NPS (assessment of the quality of work by customers) and an assessment of the quality of work by a secret shopper.
By the way, you can learn how to correctly calculate a sales plan, even if you have a new store, no statistics or pronounced seasonality, from my video tutorial at Fashion Advisers School. There you will also find ready-made calculation tables in Excel.
Salespeople who sell a lot should also earn a lot. Thus, a percentage of sales is established, which increases when the sales plan is exceeded, and decreases when it is not met.
For example, a salesperson’s personal sales plan is 500 rubles, monthly salary is 000 rubles. The bonus will be calculated depending on the fulfillment of the sales plan and salary: by what percentage of the sales plan is fulfilled - this is the bonus the seller receives.
It has much in common with a progressive percentage with one difference - in the first case, we multiply by the percentage of plan completion, and in the second, we calculate in advance a fixed amount of remuneration for achieving or exceeding the plan.
IMPORTANT! Choose one of the motivation program options: progressive percentage or bonus. Both cannot be used at the same time!
Additional part of the motivation program
If we connected the “Come to work” and “Sell” functions with the help of salary, progressive percentage and bonus, then we still have to connect “Carry out the necessary actions”, “Strive for indicator X” and “Talk to customers according to the standard”. A bonus for an additional motivation system will help us with this.
1. Bonus for achieving the target conversion rate. Conversion can be calculated both personally for the seller and for the store as a whole. The bonus is a fixed amount and, as a rule, ranges from 1 to 000 rubles.
2. Bonus for achieving the target average complexity of a check (UPT). Just like the conversion bonus, it can be both a personal and a general indicator. The bonus amount is within the same range as for the conversion rate.
3. NPS (net promoter score). Evaluation of the quality of the store by the buyer. Should be within 90-95%; if the indicator is met, the employee or team receives a bonus.
4. Assessing the quality of service by a mystery shopper. Mystery shopping is a powerful tool for assessing the quality of service in a store and monitoring compliance with service standards. An employee who receives over 95% from a mystery shopper deserves a bonus.
5. Additional responsibilities. If your employee performs additional duties (store cleaning, visual merchandising, mentoring interns, etc.) - additional payment is also due for this.
6. Competitions. Competition for the greatest complexity of the receipt, sale of certain categories, “hot” list (for example, sale of stale goods indicated in the list of priority goods of the week). Typically, the intermediate results of the competition are written down by the store manager on a motivation board located in the utility room.
The grading system is a relatively new motivation system and our final tool, which is increasingly being used in sales force management.
Grading is a grouping of positions according to certain characteristics, characteristics, grounds (definition of “weight”, classification) in order to build a motivation system. The essence of grading is to compare the internal significance of positions for an organization/company (internal value) with the value of this work on the market (external value). The grading system is recognized in many countries as an effective way to calculate official salaries, and in recent years it has been implemented by Russian companies.
In total, there can be from 3 to 5 grades for a sales team, for example: trainee, consultant, senior consultant and leading consultant.
It is not necessary for representatives of all of the listed grades to be present in one store. Even if you have only 1-3 stores, each of which has two salespeople working in shifts, you can motivate them with grades. This will allow you to adequately assess the capabilities and competencies of each employee, and pay appropriate remuneration for their work.
Employees, in turn, will be motivated not just to “sell more,” but to develop in their profession, and most importantly, learn to sell correctly and efficiently.
Assigning a grade is a kind of test of an employee’s qualifications. And if the seller’s high qualifications in our case are confirmed, he should really be paid more and given additional privileges.
When developing a grading system, it is important to take into account many aspects that are directly related to the work and salary of an employee:
1. Grade conditions and possibilities to change it:
• how often can you upgrade/confirm your grade;
• who makes the decision to change the grade;
• personal sales plan;
• compliance with the conversion rate;
• compliance with the check complexity indicator;
• compliance with the service quality indicator.
2. Salary. Regulations for calculating salaries and bonus components, as well as how they differ in each grade. For example, an employee with the highest grade can be a mentor for a trainee and receive an additional 3% of his sales.
3. Fines. Each company individually determines the need to introduce fines for employees. If you impose penalties, it is important that employees are informed about them in advance. I will give examples in which cases it is possible to apply a fine:
• violation of labor discipline;
• concealment of cases of loss of goods;
• store conversion <10%;
• complexity of the store receipt <1,8;
• mystery shopper assessment <80%.
4. The knowledge and skills of employees. Depending on the grade, the employee must have certain knowledge and skills. They are usually checked in the format of an examination interview or through testing. Sample list of knowledge:
• history and characteristics of the brands the company works with;
• dimensional grids;
• assortment of a store, warehouse;
• ability to resolve conflicts;
• sales psychology;
• sincere service;
• knowledge of software (CRM, 1C or other software necessary for work).
5. The intangible benefits of each grade. This may be a priority in choosing a vacation, an extra weekend, the size of the discount on store products and much more.
How to properly introduce a motivation program
Many companies postpone changes to the incentive program due to fear of mass layoffs and the problems associated with this process. Which is logical and understandable. People do not like changes, and are always wary of such events.
Your task is to convey to employees why this will be beneficial for them, useful for the company, and what it will look like step by step. This way, change won’t be a sudden cold shower for the team, but just a step that they need to climb.
Algorithm of actions:
1. Do not scare the staff in advance until you have a new motivation program ready.
2. Explain to employees the meaning of each performance indicator, as well as the tools and actions that a salesperson can use to influence the values of these indicators.
3. When achieving planned performance indicators, the team’s salary should be higher than before.
4. Planned performance indicators must be achievable.
5. When you are ready for implementation, warn that for the first 1-3 months you will be calculating your salary using the new “pencil” scheme, but actually paying according to the old calculation method. This way, sellers will be able to psychologically prepare in advance for the introduction of a new motivation program, and will no longer perceive the changes with hostility.
In our experience, a balanced motivation program results in an increase in store sales from 20 to 45%. At the same time, it is important that as sales increase, salespersons’ salaries also increase.
If you are still on a “salary + percentage” remuneration scheme, and you have been waiting for a sign to start introducing changes, then this article is that very sign! Whatever motivation program you choose for your staff, the main thing is to devote time and attention to your business: observe, analyze and, most importantly, feel what is right for your company and employees.
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