More Bucks for the Bang

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Your product line is broad, but your reps want to sell their old favorites. What do you do? Listen to the CEO of a company famous for its acoustic guitars. To grow profitably, Washburn International, in Vernon Hills, Ill., must also sell its other products, such as professional audio equipment. To keep his 18 domestic salespeople tuned in to the full line, CEO Rudy Schlacher offers this incentive: Meet the goal for all product categories and earn an extra 1% commission "override" on all products sold during that month.

After three months, 20% of the reps earned the override; a year later, 75% did -- with Schlacher's guidance. "If they've satisfied one goal, I encourage them to go on to categories where they've met only 40% of their goal and where I have more stock," he explains.

In the program's first year, Schlacher attributes 10% of the company's 31% growth to the incentive program. Inventory turnover went up 20%, saving $70,000 a year in interest costs. Instead of sitting on inventory and back orders, Schlacher says, "I'm able to deliver more product to my customer," resulting in 1997 sales of $58 million.

Copyright 1999 G+J USA Publishing

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