Jay Abraham used an unusual approach to increasing clients for one of his consultancy clients …
One particular client paid its sales staff 10% of the profit. So, if the company made a $1,000 profit on a sale, the sales person would receive $100 and the company would get $900.
He made them calculate …
It turned out the first sale, on average, resulted in about a $200 profit for the company. Of that $20 went to the sales person and $180 to the company. On average, the client bought 5 times a year for 3 years. So Basically, each time that company got a new client, they were receiving $3,000 in cumulative profits.
Jay’s solution … Instead of giving the sales staff 10% of the profit for a new, first-time client, he recommended to give them 100% of the profit on the first sale.
Naturally, the company’s management thought he was insane!
But, he went on to explain that by giving the sales staff 100% of the profit on each FIRST sale, they’d be ten times more motivated to sell to NEW clients.
Naturally, to make sure that the sales staff continued to give excellent after-sales service to their clients, you’d continue to give them a percentage of the profit (eg 10%) on follow-up sales.
The company went ahead and implemented this plan … and sales tripled in 9 months!
Source: Extract from Jay Abraham’s best seller … Getting Everything You Can Out Of All You’ve Got
I’d love to have your input and questions … as I’m sure many others would, so let’s have your comments below.
QUOTE OF THE DAY …
“Identify the “fatal flaw” in your sales team’s performance; what is holding them back?.”
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