Spreading Sales Out: Avoiding Quarter Four Dependence

Spreading salesMany companies have a structure that leads to an uneven distribution of sales and spending throughout the year. The end of each fiscal year can be chaotic because of this system, due to the uneven allotment of business that is received.

Quarter four tends to be the time when a business will spend money and representatives may become flooded with work. A sales management team will have to adjust their compensation plans and workload distribution in order to accommodate this trend.

Managers need to find out when a majority of their customers begin the buying cycle. While this information may help representatives realize when the purchasing decisions are made, it can also show that a sales team may not have any control on when clients decide to pull the trigger on a transaction, according to Barrett Riddleberger, the chief executive officer (CEO) of Resolution Systems, Inc., a sales training and consulting firm.

If the management team does not see an issue with its customer’s buying cycle, it is likely that representatives have control over the situation. This means that these individuals are selling based on necessity, as they have realized that they’re only at a certain percentage of the stated quota and they intensify activity in order to reach the allotted amount of sales, the executive noted.

Sales representatives are not under as much pressure during quarter one as they are in the last fiscal period. Deadlines tend to make people work harder due to the visible end date, according to Riddleberger.

A sales management team has several options in avoiding this problem of delayed motivation. Managers can modify the compensation plan by giving quarterly bonuses, as this may help to install more deadlines throughout the year, noted the executive.

Riddleberger also spoke to the idea of a benchmark, explaining that “you don’t get any commission or a small commission until you hit a certain breakpoint. You have a sell a certain amount to justify your employment before real commissions kick in.”

Errors can be made if the time periods that are designated for commission are too short, as the multiplying factors that control the payout may be affected by low volumes over a small amount of time, Inc.com reported.

The size of the deal can also influence the timing of the sale, as smaller transactions may occur quickly while a larger deal can take much longer to finalize, according to the executive.