Sometimes, when chatting with friends, we inevitably talk about the pros and cons of losing salespeople in a company. The chaos in traditional channels is undeniable, with a mix of good and bad elements, disorderly competition, one person finishing and another starting, without forming a stable competitive landscape, and naturally without a good competitive environment.
Why is the development of the entire channel hindered? Products have to go through distributors; what are the bottlenecks in distributor development? What factors prevent them from becoming larger and stronger?
These distributors, after earning their first pot of gold by going it alone, have developed into companies, with varying numbers of sales teams, but they find that the carriers of the channel and network have shifted from themselves to the salespeople.
One distributor lamented: "Even if all my goods and property disappeared overnight, as long as I keep all my people, I will still be the 'leader' in this market. But if everyone leaves, then apart from some money, I have nothing."
In fact, this passage talks about how in the fierce market competition, the competition between distributors is not about products or prices, but rather the fundamental competition is the confrontation of channel network organizational capabilities, which is ultimately completed by the salespeople. These salespeople are the masters of market relationships, and thus the most critical factor in channel competition. They are the bridge between enterprises, distributors, and terminals. Only through them can the channel operate and be maintained normally. Without these salespeople, the distributor's channel network ceases to exist, and thus loses its foundation for survival.
Every movement of salespeople is a harm to the terminal network. The terminals have worked hard to familiarize and accept the original salesperson, but today a new face appears, and tomorrow who knows who will come next, ultimately damaging the trust of the terminals in the distributor and increasing the difficulty for the terminals to accept the product.
Therefore, a stable and efficient direct sales team is the key to market development, but now achieving this goal is becoming increasingly difficult. Some distributors have become regulars in the talent market, even having fixed seats, with recruited direct salespeople coming and going like a carousel, needing constant replenishment due to poor stability.
Reasons for the frequent mobility of direct sales personnel
The fundamental reasons for the mobility of distributor salespeople are as follows:
1. Income
Distributors, in order to maximize their profits, severely deduct from direct salespeople and often break promises regarding compensation. The income of direct salespeople is generally base salary plus commission, with very low base salaries, and in some cases, no base salary at all. Some less capable and inexperienced salespeople cannot survive, while highly capable sales elites earn too little. Correspondingly, their labor intensity is high, with generally no holidays, work occupying personal time. When salespeople feel that their efforts are not rewarded proportionally, there will be personnel turnover.
Case Example: Old Zhang has considerable strength in the local market, with a good network and capital. Through his efforts, a liquor brand quickly became popular, and he made a lot of money. After the product became popular, price transparency increased, and although the volume of goods was high, there were few profits. To save costs, Old Zhang reduced the commission for salespeople and delayed bonuses to control turnover, holding them as collateral. Salespeople's income decreased while their workload increased, leading to dissatisfaction. Before leaving, some salespeople took away some of the funds to compensate for their losses, causing Old Zhang's business to rapidly decline.
Harm: When these salespeople leave, they often feel unbalanced psychologically, thinking that despite their hard work, they did not earn enough money and want something as compensation. When management is not strict, incidents of salespeople absconding with funds may occur, causing dealers to lose both wife and soldiers.
2. Competition
Distributor salespeople directly face the terminals. Due to various constraints, these direct sales talents cannot be trained overnight. An experienced excellent direct salesperson is hard to find. Recruiting competitors' salespeople not only strikes against competitors but also brings along the terminal network. Therefore, these direct salespeople become the target of recruitment by various businesses and companies, resulting in high mobility.
Case Example: Distributor Old Li is considered a notable figure locally. Starting from scratch, he earned his first pot of gold by delivering goods on a tricycle. His career thereafter went smoothly, with five or six delivery trucks and more than ten direct salespeople. Recently, he registered a company, originally planning to just manage the collection of funds from home and let the salespeople handle other matters. However, within half a month of relaxation, several salespeople reported that a nearby trade company was recruiting with very favorable conditions. Old Li thought the salespeople were trying to negotiate better terms and ignored them, dismissing them with a few words. Soon, some salespeople quit, and Old Li remained unaware, thinking it was normal personnel turnover. However, when several salespeople jointly resigned, Old Li realized the trouble was big. Terminal orders, complaints, and questioning calls came nonstop, forcing him to rush to the talent market. Upon arrival, he saw his own salespeople standing in front of the competitor's booth, making his mind "buzz."
Harm: Their biggest bargaining chip when joining competitors is the ability to use the terminal resources and good customer relationships to defame their former employer and poach from their old boss. These salespeople work hard for competitors, quickly changing the market landscape because they know your network and channel vulnerabilities well. When they target you, you will suffer greatly.
3. Environment
Some distributors use family-style management, treating insiders and outsiders differently. Direct salespeople receive no respect, causing personnel turnover.
Case Example: Old Wang manages his business in a family style, with himself as the boss, his wife as the accountant, and his younger brother-in-law as the warehouse keeper. There are also distant relatives and fellow townsfolk involved. In such an organization, two groups are artificially formed: insiders and outsiders. Insiders and outsiders are treated differently, with varying levels of intimacy and benefits, naturally leading to conflicts. The problem is that the insiders' business level is not high, so external recruits must be heavily relied upon but also guarded against. Just at this time, a salesperson absconds with funds. Instead of finding the reason in the management system, Old Wang concludes that outsiders are unreliable and lets his relatives supervise the salespeople closely, suspecting them like thieves. No salesperson can survive under such suspicion, and the team quickly collapses.
Harm: These people leave full of resentment, deliberately defaming their original unit and harming their reputation. They intentionally damage the terminal market upon departure, harming the merchant's image.
4. Status
After salespeople achieve a certain level of income and performance through their own efforts, according to psychologist Maslow's theory of needs, the only need left should be "a sense of accomplishment." Generally, companies can satisfy this need through promotion, but distributors only offer monetary incentives, making it difficult to meet this requirement, leading to personnel turnover.
Case Example: Old Luo is a leader in fast-moving consumer goods. What he relies on and takes pride in is not the advantageous network or good interpersonal relationships, but his two salespeople: Xiao A and Xiao B. These two salespeople have followed him for many years, and he personally taught them the business. They worked hard and contributed significantly to the growth of the business, known as Old Luo's "two generals." Old Luo did not neglect them, giving them the highest bonuses every year and an extra substantial red envelope. What Old Luo least expected was that they would resign. Old Luo strongly opposed it, trying his best to retain them, but they were unmoved and left without notice. Old Luo soon learned that the newly opened wholesale store in the east of the city was their doing. Old Luo was heartbroken, accusing them of ingratitude to anyone he met, but his business suffered greatly in the competition with the new wholesale store.
Harm: People leaving for this reason are usually of high caliber and capability and will develop in familiar industries and markets, using the resources and information they have mastered to start their own businesses, actually cultivating a terrifying competitor for the distributor.
5. Quality
Direct salespeople were previously only assigned the role of delivery, where enduring hardship could make one a qualified salesperson. However, with intense competition now, the market is much harder than before, requiring higher qualifications and marketing knowledge from salespeople, such as negotiation skills, customer management skills, in-store negotiation skills, etc., which are vastly different from the past. Low-quality salespeople cannot adapt to the needs of the job, and there are also factors like values.
Case Example: Mr. Wei's sales team was bloated, inefficient, and had numerous problems, including frequent incidents of salespeople absconding with funds. He hired a professional manager, Mr. Zhang, with a large sum of money to take charge of the entire business. With rich management and business experience, Mr. Zhang discovered that the root cause of the problems in Mr. Wei's sales team was the overall low quality of the salespeople. On average, these salespeople only graduated from primary school, with poor communication skills. Some were even ex-convicts or people with criminal records. These individuals banded together, exploiting various loopholes for their own benefit. Mr. Zhang established a comprehensive workflow and evaluation system, strictly regulating the salespeople. As a result, those with poor sales abilities lost their livelihoods, and others lost their side incomes. These salespeople put aside their differences and united to fight against Mr. Zhang. Unable to endure any longer, Mr. Zhang resolutely punished a few, triggering a collective resignation to intimidate Mr. Wei and even threatening physical attacks on Mr. Zhang. Before leaving, they deliberately disrupted the market, forcing Mr. Zhang to leave quietly.