Marshall industries has turned the traditional model of selling upside down — and turned in record financial results. But Marshall still has to sell its ideas to a puzzled industry establishment. The company's principles only look radical, CEO Rob Rodin insists, if you buy the three myths that dominate how most companies think about selling.
Myth #1: Making the numbers is making the grade.
Before 1992, Rodin says, Marshall usually made its sales targets — but he never felt it was making progress. That's because divisions or territories made their numbers at the expense of other parts of the company. "Boston outshipped Cleveland, so Boston is better than Cleveland," Rodin remembers. "Then Boston would lose a big order and Cleveland was back on top. It was all of us working against each other."
The company often made its immediate targets at the expense of future business. "We'd run three promotions a day," Rodin says, "whip everyone into a frenzy. It was fun, exciting. But then strange things would happen. How come in May all those great bookings from April were being returned?"
Myth #2: Commissions mean rewards —and risks.
Before Rodin eliminated sales commissions, he commissioned a study of how much risk went along with the generous rewards. It confirmed what he suspected: the actual risks were minimal.
"Let's say we were paying one group of people a potential incentive of 30% above their base salary," Rodin says about Marshall's old system. "Year after year those people consistently made 29% of their base. Yet goals for sales or inventory turns weren't being met. I asked the obvious question: How can this be? 'Well, this person almost quit, so we guaranteed his income for two years.' For most people, we had already eliminated risk."
Myth #3: The best people make the most money.
Most salespeople who make out financially don't succeed because they're great at selling, Rodin argues. They succeed because they're great at maneuvering for the best accounts. "The skullduggery that goes on with account assignments is unbelievable," he says.
"People who were skeptical about our new system would ask, 'What about my upside?,'" Rodin continues. "I'd ask back, 'What about your downside?' Do you really want a career where your success depends on the short-term health of five or six accounts? Wouldn't you rather be part of an organization where what matters is how effectively you contribute to the work of 1,400 other people?"