Turn Salespeople into Profit Watchers

 

Manco, a fast-growing distributor of duct tape and other consumer products based in Westlake, Ohio, sells to Wal-Mart and otherbig customers. In the past, its salespeople - like most salespeople - competed for top-line revenues. Profitability was somebodyelse's worry.

Then the company began producing and distributing monthly account books that broke the company's numbers down by everyconceivable category — including profits generated by each salesperson's accounts. At the same time, the sales-compensationsystem was changed to take profitability into account. As a result, salespeople began thinking of ways to improve thebottom line as well as the top.

"Now the sales guys ask me things like why their freight expense is up," says Charlie MacMillan, the company controller. "AndI'll say, 'Well, let's take a look at your freight bill. Hey — you're shipping minimum-poundage loads to the West Coast! It'sgoing to cost more money than if you're shipping a whole truckload.' So they'll say, 'We've got to get more on the order." Inone year, a West Coast salesman cut his freight bill by 14%.

To Tom Corbo, Manco's president, sharing that information is a no-brainer. "People make better decisions once they knowwhat they're being charged for."