The True Cost of Incompetence

Leaders often think that the cost of having an incompetent salesperson on the team is the wage paid to that person. But there is a lot more to lose. The salary is just the beginning.

Let’s say you pay $50,000. In Australia you add 9.5% superannuation so now you’re at $54,750. For this exercise we’ll ignore payroll tax and other on-costs.

Business lost through incompetence

Now let’s look at loss through incompetence. Is it reasonable to expect that an incompetent salesperson will lose 1 listing a month? That’s conservatively 6 sales lost per year. At an average selling fee of $15,000, that’s $90,000 per year. Add that to the lost salary and now your losses are $144,750.

In 1993, the average production of a salesperson was $135,000. In 2019, despite a recent boom, there was no evidence that it was much higher. It’s fair to say that incompetence is alive and well!

Real money

It is easy to dismiss these losses because you never see the money. Only the salary is money that you had, and then paid to your incompetent salesperson. You never had any of the other money, hence the tendency to not take it into account.

But you’d better believe that this is real money, even if you didn’t get it.

Imagine I walked into your office with a briefcase containing $145,000. I tell you that this money is all yours at the end of the year, BUT I will be deducting the equivalent of one selling fee every time I detect business lost through incompetence by one of your salespeople.

A salesperson walks into the office after two hours on a listing appointment. “Did you get it?” you ask? He replies, “No, but I’ve got a good relationship with them. If they list with anybody, they will list with me”.

And right then, I reach into your briefcase and remove $15,000. Would you believe then that incompetence is costing you real money?

This is the point – money you had, but lost, always hurts more than money you missed out on, but never saw. It’s the same money, and it buys the same things, IF you can get it.

Four incompetent salespeople can easily cost an agency $600,000 in expenses and lost income. Do you want some of this for yourself?

Then train your people. Make incompetence a thing of the past in your agency.

Gary Pittard