In 1996 “Jerry Maguire” burst onto the movie scene starring Tom Cruise in the lead role as sports agent and Cuba Gooding, Jr. as his client. A shouted phone call exchange between these two lead characters is memorable even to this day, with Gooding’s character repeatedly saying “Show Me the Money”!
Recently one of my new associates and I had a similar discussion. Only this is the furniture business and the money is not quite the same as the star athletes. My associate is new traveling on the road and has some concerns, rightly so, about making enough money to survive travel costs.
To his credit, he looked at the various lines represented and what the potential for each was over a year’s time. He estimated how many clients he thought he could gather. He estimated how a customer would be worth on an average monthly basis. Finally, he took those two numbers and multiplied them by his estimated average commission. This yielded a guesstimated average monthly check.
On reflection I thought this was a very smart strategy for new and seasoned reps to go through occasionally. A new rep needs to know what it will take to survive, and a seasoned rep needs to know what it looks like to get to the next level. If you consider how much a customer is worth, or how much a factory commission is worth to your business, then you have a measuring stick.
What gets measured gets improved.
You set your goals and revisit from time to time to see if you are on track or not. I do it every quarter reviewing customer performance along with factory performance. Best done with previous year experience if possible. Why is it down? What can we do to improve? Where does this compare to my budget, and what did I calculate wrongly?
Sometimes things seem to be going great if looking at gross commission dollars, but then you realize one customer is way up and three others are down. Figure out why those three dealers are down, correct for it and your business will be the better for it.
If you go out day after day without a financial objective or plan, how will you know if you are digging yourself into a hole or achieving your maximum productivity? Just a little time and effort upfront will Show You The Money!
As always feel free to leave your positive comments below. Thanks