Many executives pay draws to bridge sales earnings when sales people first join the company. This strategy is intended to help them attract top talent by keeping the sales person’s income consistent when starting a new job. However, is this strategy truly paying dividends for the company? Or, is it flawed?
There’s the recoverable draw which is a loan to the sales person. Every day the sales person comes to work, he accrues debt. Nothing like working hard to owe more money today than yesterday.
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The other type is the non-recoverable draw. This is free money given to the sales person for some duration of time. If you have a pulse, you get the money.
Is this strategy hurting you?
While the intent behind paying draws is understood, the ultimate goal of getting a fast, high return on the new-hire investment is not necessarily achieved. Why not invest those Rands where they can impact both the top and bottom line? Invest them in sales onboarding.
Often, sales onboarding only includes curriculum. That means training is provided to the sales people without measuring mastery. What if you had an assessment part of sales onboarding during which the new sales person’s information and skills mastery is evaluated.
Imagine concluding sales onboarding with a written exam and a sales call simulation. Based on performance, sales people are eligible for a bonus.
Consider this instead
Investing in sales onboarding does three things for the company:
- It gets sales people focused where you want them to be — on getting up to speed, fast!
- The onboarding exam and simulation show who is ready to sell and who is not – so you can see who needs additional coaching.
- There are no advance commissions paid (above the salary) unless onboarding expectations are met which means the sales people have skin in the game.
This strategy is a winning proposition for both the company and its new sales people.
