Here are some observations of the sales environment in China:

    Firstly, let's look at the 2 most common problems that sales people have:

Sales people who slacken and don't work hard

    This happens even when sales people are paid a relatively low basic salary, and a decent commission.  The reasons are varied.  One possibility could be sales people are paid a relatively low basic salary could be already sufficient for the sales person to pay the bills.  Sometimes pure commission or an even lower allowance may not attract any sales person to join at all.  Any basic salary that is lower is likely to make the candidate choose another profession.  However, for some sales people, having that basic salary is at times sufficient for them, and they don't have the drive to generate even more income.

    As for the commission, new sales people tend to have deals that are smaller first, and hence lower commissions are given.  Some sales people may feel the huge income disparity between the haves and have-nots, and may not want to work their way from making small deals to bigger deals.  They want instant gratification.  They want the big pay-offs now.  While there should be no stopping rookie sales people to close major deals, they will have to learn, on the job, how to generate results in the right way.  Trying to close big deals when one is not ready is likely to bring disastrous results.

The other bigger problem is when sales people gave customers away to the competition, possibly one owned by themselves. 

    In China, competition can be very intense.  This applies to the market for talent as well as the market for your products and services, that is if you are a sales manager in China.  It's very common for your competition to poach your sales people, especially if they are good.  And if they are real "good", they may negotiate for a higher commission at the competitors' (without having to pay the basic salary), and still enjoy the basic pay that you are paying.  Then the sales person usually passes the smaller deals to u, and net the big fat commission to the competitors. 

    Other times, some sales people just formed their own company which is reselling a competing product (and most likely much cheaper than yours).  They will then offer their "alternative" to customers who are price sensitive (which happens to most customers)

    Although such sales people are caught (and fired) sooner or later, the damage to your company is already done.

Harsh Management

    Again there are 2 common aspects of how sale managers treat their sales people badly:

    One interesting fact in China is that there is this media company that replaces 25% of its sales team each month.  While staff turnover in China is high (averaging 18 months per employee), sales staff turnover is pushing this rate to the extreme. 

    Part of this reason is sales manager views non-performing sales people as expendable, and are far more willing to hire new batches of sales people if the old ones aren't moving.  While in theory, this is OK, these sales managers don't give enough training and guidance to their sales people, and hence in due course, sales people fail.

    The rationale for not training sales people is since sales people tend to change jobs sooner or later, why train for the competition?  Besides, since they are paid a basic salary, they should get their own help if they want to stay in the job.

    While this stick may terrify some sales people from slackening and "goofing off", there are some undesirable effects consequentially.  One of which is sales people may be pressurised to cut prices, even at the expense of their own commissions, to close sales.  In some cases, sales people tend to over-exaggerate the benefits of their products at unbelievably low prices.  In extreme cases, sales people fake contracts, either asking the client to sign but cancel the deal later, or down right fraud.

    Another undesirable effect is the quick burnout rate even among the good performers.  Coupled with those non-performers, the staff turnover amongst sales people is tremendous.  As a rule of thumb, the replacement cost of a new sales person is about 3-6 months their monthly salary (given that time and resources are required to search, select, hire, orientate, handover etc.; and even damage done to customers if they are not well-trained)  The cost of replacing good sales people is much, much higher.

    The 2^nd problem is even bigger, involves political factors in the company, and is hard to resolve.  While it is true that when a sales manager spends more time with the best performers, these performers will produce much better (and worthwhile) results than if the time is spent on non-performers.

    However, this must be done with some level of perceived fairness.

    It is very common that the distribution of leads, lists, territories, industries and other resources in China are haphazard at best, and downright biased in many cases.  While it is virtually impossible to make sure everybody gets equal treatment, it's still the sales manager's job to make sure that the sales people perceive such distribution as fair. 

    Again, good sales people may leave if they perceive that they are not being treated fairly, and in worse cases, may conspire with competitors.

Creating a Better Sales Eco-System in Your Company

    While a lot of Sales Managers in China see themselves as "slave drivers", whipping all sales people to make sure they generate enough sales, and leaving those who could not follow pace for "dead", such practices will definitely end up in lose-lose results, as costs of selling (hiring and firing costs) increases, while sales people's performances tend to peak, and then decline drastically. 

    As the old saying goes: it takes 2 hands to clap.  Sales managers may want to consider the following:

    In the end, sales managers and sales people have just only one goal: optimise sales results for the company.  By optimising, it means that the results are sustainable, and the costs are kept low.  While this may be difficult to achieve in a place like China, the sales team that is able to do so will be streets ahead of its competitors.  Still, should you need more assistance in this area, feel free to contact info@psycheselling.com  All information shall be kept in confidence.