Are Salespeople Profit Eaters?

By Rich Bond

When I was growing up, my dad (who was a corporate controller and later a business owner) always dissed salespeople.  So, I entered the business world with the same mindset.

That only got reinforced in my first finance job after business school at American Can.

My boss went berserk when he discovered that one of the big sales guys had made a deal with Kmart where the cost of the freight was almost as high as the sales price.

It took my boss a while to get the salesperson fired, but he finally prevailed, saving the company potentially millions in profit.

*  *  *

During the 11 years I worked at Seagram, I came to have more respect for salespeople.

I realized that they were Street Smart. They would do whatever was needed to maximize their payout, even if that reduced profits for the company.

As luck would have it, I was moved out of my corporate position into a job in sales.

While working in sales, I was able to convince management that the salesforce needed to be managed and directed differently.

Seagram, based on my recommendation, modified their bonus plan so that the salespeople were rewarded for sales that drove profit increases.

Over time, Seagram effected a huge transformation that resulted in the company being sold for five times what it was worth when I joined the company.

Managing salespeople and programs requires a lot of street smarts on your part, too. You need to be aware of all the ways the salesforce could attain their bonus but still hurt your company.

Feel free to reach out to me if you want to talk about how a smart controller or director of finance can help you manage your salesforce more profitably. richard.bond@bondandcompany.com.

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