OEM Management

December 2, 1995 in Radio, Television, News and Articles

by Dave Kurlan
Reprinted from the Winter 1995 issue of Smart Selling

Smart Selling MagazineOf course OEM stands for original equipment manufacturer and some of you sell to them while others are OEM’s. I have my own definition of OEM, which stands for or-else-management, or management by use of “or else’s.”

Everyone in sales management knows that salespeople are motivated by money, incentives, prizes, contests, recognition and bonuses. What most managers haven’t accepted is that if monetary incentives alone were enough to get all salespeople to consistently perform to our expectations, we wouldn’t have to devise additional incentives, like contests, prizes and bonuses. The commission alone should be motivation enough! Unfortunately, some salespeople are making more money than they need. Some of them are doing quite well, while others never needed much to begin with. More money, trips and prizes won’t necessarily get them to work any harder, or any smarter. So while money only works as an incentive up to a point, I’ll still take ten of the rare salespeople who are motivated purely by money. Tell them how much they can make if they sell X number of Y’s and they’ll get out there and sell Y’s until you run out. The good old days!

Since the commission is obviously not enough, and running weekly and monthly contests dilutes their potency, there has to be another motivation, an X factor. That’s where OEM comes in. It’s human nature to be motivated by fear and salespeople have more fear than most. While the stereotypical image of a salesperson is to be tough-skinned, fast-talking, bull shitting, high-pressured, and not trustworthy, real salespeople are the total opposite. Most are wimpy, too honest, and scared to death of being rejected!

Most are very motivated by fear. Fear of not making money, of not being able to meet the mortgage payment, of losing the deal, of losing your approval. So why not take advantage of this fear and turn it in to your most powerful management tool?

You must be very clear when implementing OEM. You must tell the salesperson exactly what you expect him to do this week. For example, you might say, “Ted, I’m not happy with your activity for the last several days.” (OK, so you let it slide for a bit longer than a week, so you might have to say…for the last two years!). Here’s what I need you to do this week: 30 dials per day, 15 conversations with decision makers per day, 3 appointments booked per day, 3 new sales interviews per day, 7 referrals per day and 1 proposal per day. And Ted, these are all minimums! OK? Ted says “OK boss!”

Now you’re excited and you call me and you say, “Dave, I did it! I told him exactly what he had to do!” And I say, “Good. Or else what?” to which you reply, “Huh?”

It’s not enough to clearly tell the salesperson exactly what he must do. You must also add an or else to it. You must also be ready to enforce the or else. What are some of the consequences for failing to perform to expectations? It depends on what you’re already giving them, but it could certainly include any of the following: Or we won’t pay your expenses this month; we’ll take away your car’ you’ll pay your own gasoline charges’ we’ll reduce your base salary’ we’ll reduce your commission percentage; we’ll take away the XYZ account; we’ll reduce your territory; you’ll have to perform 100 sit ups in front of the other salespeople; you’ll be replaced.

The last one is your last resort. There are obviously dozens more from which to choose. Most importantly, you must offer an or else and you must follow through. Experience shows that once a follow through as promised with an or else, it won’t happen again! Once they know you’re for real and the punishment is for real, they’ll find it much more comforting to perform. After all, isn’t that what you hired them to do in the first place?

Now here’s your homework. Determine what your weakest salesperson should be doing that he isn’t doing now. Tell him what you expect, when you expect it, and how you expect it. Tell him what happens if he doesn’t do what you expect. Follow through. If you don’t, you won’t have this column to read any more!

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