Happy Sales People = Happy and Healthy Sales Numbers

Jennifer PernaVice President of Sales

Blue Plate Catering

Overview• How to Motivate your Sales Team

• Encourage Growth

• Develop Performance Based Compensation Structures

• Have Positive Numbers Hit the Bottom Line

About Jennifer• Studied Hotel and Restaurant

Management• Hotel Catering Background• Off Premise Catering

– Salesperson – six years – sold $2.5 million peak year

– Sales Manager – seven years – average annual growth 20%

– Independent Sales Consultant – 2 years

– Vice President of Sales – 5 years

About Blue Plate• Company Overview• Sales Team Composition

– Sales Consultants– Event Producers– Roles and Responsibilities

Develop Individual Sales Goal Reviewed by VP Sales and

Approved/Modified Develop Sales Implementation

Plans Manage Individual Expense Budgets Manage Venue Relationships Sell, Produce, Attend Events Goals range from $500k – $3 million

based on experience

Analyze your Existing Compensation Structure• Have you been Compensating the

Same “Just Because”• Has the existing package retained

your staff– What is your turnover ratio?– Do you ask people why they

leave?– Do you have people that never

leave?• Do you feel your plan is fair – and

does your sales team?– What does your sales team ask

of you?– Do you know what your

competitors are paying?– Geographic considerations –

what is the norm?

Analyze your Existing Compensation Structure• Is it individual based or group

based– Do your sales stars stay if group

based?– Benefits of individual based

• As a manager/owner – how do you feel about the comp plan?– Do your salespeople have a year

end W2 higher than yours?– How does that make you feel?– Can you actually change the

plan – and if so – what will happen?

– How will you explain and are you willing to share numbers? How open are your books to the sales team?

Developing Individual Performance Based Compensation Plans

• Traditional Compensation plans – Advantages/Disadvantages

• Salary– Budget friendly– Candidate pool wider –

traditional hiring process– Doesn’t pay for performance –

tenure based for compensation increases

– Safest plan for sales person– Goals important but not relevant

to compensation

Developing Individual Performance Based Compensation Plans

• Traditional Compensation plans – Advantages/Disadvantages• Salary plus commission

– Hiring process more traditional– Safe plan for business and sales person– Encourages and rewards for growth– Goals defined

Developing Individual Performance Based Compensation Plans

• Traditional Compensation plans – Advantages/Disadvantages

• Commission with Draw– Define draw = loan– Allows salesperson stability– Pays on individual performance– My favorite for off premise catering– Encourages individual goal

development and annual growth

Developing Individual Performance Based Compensation Plans

• Traditional Compensation plans – Advantages/Disadvantages

• Commission only– No “payroll” risk to company– For sales sharks– Should be higher percentage than

commission plus draw due to individual risk

– “Own the business” mindset– Difficult to project goals– Part time options/Independent

option– No benefits to employee

Design Non Financial Motivators/Rewards

• Weekly Sales Sheet• Woo Hoo Emails

– Achieving Year End Goal– Big Wins

• Contests– Miles for Trips

• Blitzes with Instant Rewards– Gift Cards– Trade with Vendors

• Flex Time

Profitability Guidelines in a Competitive Marketplace and Building Your Team

• Work Backwards – stars with your annual budget• Spending time with CFO/Accounting• What is the company profitability goal and how does the sales team fold

into that?

Profitability Guidelines in a Competitive Marketplace and Building Your Team

• What is profitability %? 10%? 15%– What is net revenue goal? (after

commissions and discounts)– How much should the sales team cost?

Define a percentage that works in net profitability after all operating costs and is based on net revenue (range between 8-12% before taxes and benefits)

– Example– Company wants 15% net profitability

with 10% annual net revenue growth; Sales for year 2013 were $5 million

Profitability Guidelines in a Competitive Marketplace and Building Your Team

• How to Develop 2014 Model• Net Revenue Goal $5.5 million• Net Profit $825,000• Sales Team Compensation Budget based on 8% = $440,000• Sales Team Compensation Budget based on 12% = $660,000• How do you “spend” the budget and how do you achieve $5.5

million???– Where are your sales people pacing now?– Where were they in 2013?– Are they capable of more growth?– Does the Existing compensation plan work as is?– What are your existing commission percentages now?– Does that include event production support?– Do you want to build the team?

Reasonable Growth Expectations

• Factors– Geography– Company History– Company Capabilities– Market Segments– Company Initiatives

• New Salesperson (1-2 years) 50-75% first few years– $250,000 - $500,000 goal year one– $375,000 - $875,000 goal year two– $600,000 - $1.5 million goal year three

• Established Salesperson (3-5 years) 10-25% annual– $750,000 - $2,000,000

• Seasoned Salesperson (5+ years) 0-10% annual– $1,000,000 - $3,000,000

How to Broaden Your Sales Team Base

• Year one salary – company investment• Year two salary plus commission• Budget

• Network• Build from Within

Remember

Happy People, Making People Happy

Jennifer PernaVice President of Sales

Blue Plate Catering312.239.2846

jperna@blueplatechicago.com