A CEO told me a story about a salesperson who asked for a raise. She asked the salesperson, “Why do you deserve a raise?” “Because I made less this year than I did last year,” explained the salesperson. “That’s because you sold less this year than you did last year,” said the CEO. “I know. And I want you to make it up to me,” said the salesperson.
This salesperson is no longer working for this organization.
So how and when should a salesperson ask for a raise? Understanding your boss’s point of view will help you position your raise as a good thing for the company, instead of a good thing for you. Here are seven points to consider before negotiating a better deal:
1. Make Sure You Have Clout
The salesperson in the example above didn’t have leverage. Coming off a bad year or quarter is the wrong time to test your value. With clout, you could find yourself with a better offer from the company or on the free agent market.
A better offer from another firm validates your claim that you’re worth more to the company you’re working for. If your boss wants to keep you, you have the clout to establish the parameters of your raise. However, if you use the “here’s what I’m worth to another company” ploy, you have to be willing to leave.
2. Watch Your Timing
Don’t even think about asking for a raise until you’ve been there a year or more. Your value to the company increases when you have some customer relationships you can leverage for increased sales and referrals.
3. Ask for Small Increases in Your Base Salary Based on Inflation
If it’s been a while since your base pay was adjusted, this ploy might work. However, the trend today is for lower bases and increased incentives. This lets companies reduce fixed expenses while rewarding you for meeting company expectations.
4. Be Willing to Take an Expanded Role in the Company
You have both a job and a role as a salesperson. Your job is to sell and make your quota. Your role is to mentor that new salesperson and be part of the team.
Your role means supporting your boss in sales meetings, not rolling your eyes and sighing when the new demands come down from corporate and not promising clients things your production people can’t deliver. Bosses bend over backwards to keep salespeople with with good attitudes and look for excuses to fire the malcontents.
5. Negotiate for Perks That Don’t Cost the Company More Taxes and Benefits
Companies don’t have to pay workers’ compensation and FICA on an extra week of vacation, a trip, or increased car or cellphone allowances. It’s income to you, but not as costly in cash outlay as a raise.
6. Ask for Extra Incentives After You’ve Made Your Quota
That’s the easiest thing for your boss to give you. Imagine getting an additional 10 percent, or even 20 percent, on everything you sell once you’ve made your commission. This works because your boss has to deliver a number to his boss. Once you help deliver that number, you’ve got more clout, and people will want you to stay.
7. Make It a Win-Win Situation for You and Your Boss
In the scenario I outlined at the beginning of this article, the only winner would have been the salesperson. The boss didn’t get increased performance for increased pay. Show that you’re willing to take on more responsibility. Be willing to do some of the work before you get paid to demonstrate that you deserve the increase.
Asking for a raise is just like asking for an order. Practice your presentation. Be as prepared for this meeting as you would be for a presentation to a major customer. Arm yourself with facts and figures on your performance. Position the raise as a benefit to the company. And finally, make sure your boss sees you as a winner and not a whiner.