Sales quotas can be a double edged sword for wine distributors, often putting sales reps and distributor at odds over the goals. A dynamic distributor that represents brands with some traction in the market, or with the potential for broad sales volume, will usually have some quotas, ideally hitched to an incentive bandwagon. This would indicate a sufficiently robust portfolio to enable the sales reps to make a decent living, but quotas can often conflict with their customers own needs.
I am aware that there are as many disparate situations as there are distributors and wines, and for purposes of this subject I’m eliminating large wholesalers with enormous national brands. The assumption with these companies is that the entire portfolio is based on quotas and, although it can be a great proving ground for some, it is not the scenario I wished to explore here.
One of the customary reasons for incentives tied to goals is a push from a brand owner to establish and build a particular market, to make it stand out in the sales reps’ minds and ultimately achieve some success amid a very crowded field. This can mean an income boon to the sales rep. The right wines can also open previously unavailable ‘A’ accounts, or certain price points can open other doors to case stacking in stores and glass pours in restaurants.
The downside is when the wines are impossible to sell despite threats and intimidation from the sales manager and begging and pleading with accounts. Again, there are so many reasons for this – price increase, vintage issue, decline of the category, prior commitments by the retailer to other quota related wines – any of which the distributor could look upon as a temporary situation. But while he is trying to keep the supplier happy and mark time until things improve, he is making the sales rep’s life miserable. Another challenge is a distributor, even a small to medium-sized one, which has all quotas (with or without incentives) and nothing else. This reduces sales calls to moving boxes and a disingenuous attempt to convince the retail buyer to purchase whatever is in the book, just to reach an arbitrary target. The retail account only has limited time and will start to avoid the sales call, and the rep will become discouraged by having been reduced to a box mover, where the wines themselves have become immaterial.
Placements and volume incentives with a monetary reward are typical motivators for the sales rep, because they are, after all, commission-based, but if everything in the book is a quota they lose interest and start to feel they are chasing an unrealistic sales goal every month. Quotas ideally should be established for a period that is long enough to see results, but short enough to avoid having the incentive taken for granted. One wine a month can work for rotating wines in a brand, e.g., but ideally a quarter gives salespeople a satisfactory period to allow buyers to accommodate the wines in their schedule, and for the sales rep to accumulate a healthy bonus bump. It is also a good opportunity for vendors (hopefully in financial collaboration with the distributor) to establish a competition between reps or territories for such achievements as the following:
- Most new on-premise (restaurants) placements
- Most new off-premise (stores) placements
- Number of case stacks fulfilled
- Most glass pour placements
- Establishing new accounts
- Establishing new territory
- Opening a chain account placement
These are just broad examples. Incentives can and should be tailored to meet such factors as the population and potential of the individual market, or the ease or difficulty of selling the particular wines. A program could run a whole year if it is tied to a trip to the winery abroad. Key to any program is accountability and making it enticing and specific enough that a good segment of the sales force jumps on board. Something nebulous, such as a reward at the end of the quarter for “most wine sales” or “biggest jump in sales” can backfire. Ambiguous or undefined goals could result in very few people accepting the challenge and having, e.g., to pay out a large gift that exceeds the supplier’s profit made on the overall sales.
Esoteric varieties, high priced, low priced or unknown wines all play a part in designing a program. If budgetary constraints are an issue, make it something fun and interesting. If possible for new wines, a market visit by the vendor can generate enthusiasm and give the sales team the selling tools they need for a successful launch. Whatever you choose, it has to make sense for all concerned. And ideally the distributor should contribute to the supplier’s financial commitment, both to attract the sales rep’s attention with a higher incentive and to make the distributor a partner in the outcome. And vice versa. If the distributor is the one who wants to set goals, then solicit the supplier’s help, both in designing the program and contributing to the incentive.
There are lazy sales reps, ones who only service accounts for reorders, who cannot be relied upon to follow through on commitments and put in a minimum number of hours. Those aren’t going to be motivated by goals or quotas or much else, so there’s no point in spending time and effort on them. The best salespeople, the ones you need to keep, are self-starters who aspire to build their wine knowledge base, gain experience in the industry for future advancement, introduce their accounts to new wines and see their hard work pay off with strong income growth. Therefore, for a distributor to succeed with quotas, they must be realistic and balanced with the ability for the sales rep to have some stimulating self-determination in their sales with a diverse portfolio. The good sales rep chooses to feel they are not just “pushing” the latest quota (whether they like the wine or not) but they also have some latitude and flexibility in the field to present wines that interest and excite them, and that they are learning and growing in the process. It’s a collaborative process.
Finally, if a sales rep can see that the quota period ended with solid placements on which they can build a brand, it is a further incentive to sell the wines beyond the quota timeframe – the goal of both supplier and distributor. Quotas should ultimately be about longevity for a brand’s relationship with the distributor, not one budget period.