Ray Was No “Norma Rae”
I started my career as an accountant for a nationwide distributor of industrial chemicals. Yes, a clerical job. My boss was named Ray, and he was the vice president of the largest region in the company.
One of my early responsibilities was payroll for both hourly and salaried employees, including Ray. I knew how much money everyone made. We would prepare the payroll checks, and I would sign them and then take them to Ray as they required two signatures.
I quickly discovered that one of the salespeople in the Peoria branch was very well paid, a huge amount by my standards, and even more than his direct branch manager. I recall someone in our department commented in a venomous tone: “No SALESMAN should make that kind of money. That’s not fair!”
When I took a stack of checks into Ray’s office, I asked him how it was possible for a salesman to actually make more money than his boss. It turned into one of those treasured conversations that affected the rest of my life.
His first comment was, “I wish we could find a hundred more like him. I would love to pay every one of our salespeople that kind of money.”
I was dumbfounded. Ray went on to explain that the salespeople were paid commission based on their gross profit contribution to their branch. The particular salesman in question had started in a small territory, worked hard, and now he was responsible for over one-third of the entire branch’s gross profit, even though they employed five salespeople.
Ray then said, “Don’t fret over what we pay him; look at the money he’s bringing in for the company. If we had a hundred more as good as he is, imagine how much money our company would make.”
I thought for a minute and asked, “If we paid him 75% of what he currently is making, do you think he would quit his job?” Ray showed a great deal of patience as he explained that this was a very competitive business. If we didn’t pay him that kind of money, our competition would quickly hire him away, and he would take most of his good customers with him. He also pointed out that we really do not determine how much money he makes; like all the salespeople on the team, he determined his own earnings by how much he sold.
By then it was now well past 5:00 PM, and the clerical staff had gone home. I had to wait around until Ray finished signing all the payroll checks. He liked to chat in those relaxed, after-hours moments when the machines were turned off and the phones stopped ringing. Somehow he sensed what I was thinking: These salespeople were all making a whole lot more than the accounting people.
He continued to say:
“Denny, sales is the fairest profession in the world. It makes no difference how much education you have, what your ethnic background is, or where you are from. It pays on one thing, results. If you get the job done, you get paid. The better you do your job, the more money you make.”
Ray added that they’d offered the salesman in question a promotion, but he’d turned it down. He loved what he was doing and did not want a pay cut.
Then Ray pulled out an article from a business magazine. It was about a survey of the top 500 US corporations showing that 62% of the top management had, at one point in their career, some real sales and marketing experience. I asked Ray why he thought that number was so high.
He said that many people don’t realize just how competitive business works in a free market. Competition is stiff. There are always competitors trying to improve their products, or their production methods to lower their cost. They want to take away your customers. Understanding how to thrive in a competitive marketplace is mandatory if you want your business to survive. That cannot be taught in a classroom; you have to experience it in the marketplace, and salespeople have a front-row seat.
Ray said that you could make more money quickly in sales than in any other part of the business. If you wanted to move up the corporate ladder, a successful track record was a huge plus. He didn’t want to hurt my feelings, but he could hire good accountants anytime. They were a dime a dozen. Finding a good salesperson was a much bigger challenge, and you had to pay them well to keep them.
Within a month, the job of credit manager opened up, and I jumped at it. I wanted to learn what it was like to visit customers and see how our products were used. Not long after that, I abandoned accounting altogether and jumped into sales. I never looked back. [Go to Page 3]