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OPINION - Salespeople and their accounts

by Chris Conley

NEWS BLOG (WSAU) It may seem unusual for me to defend Clear Channel – the largest radio company in the world. They are facing a discrimination lawsuit, and the company is being treated unfairly.

The trouble is in New Orleans, where Clear Channel owns a group of radio stations. The company made sweeping changes in their sales department during the economic downturn. Advertisers who were spending less money on commercials were reassigned to new sales reps. A group of black salespeople sued, saying some of their most-valuable accounts were given to other people in the sales department. Some of the minority salespeople say their commissions went down by more than 15%, while white salespeople did better. Seven account execs, all minorities, have files a federal discrimination lawsuit.

The lawsuit is based on a flawed assumption that’s common in many sales departments. Very often a salesperson thinks when they go out and close a deal that an account it theirs. It isn’t. The account belongs to their employer. When a salesperson earns a commission on a sale today, that’s no guarantee that they’re entitled to commissions from that account tomorrow.

In the name of keeping good salespeople most companies don’t move accounts from person to person. It leads to needless hard feelings. And most buyers develop relationships with salespeople. Clients tend to spend more with friends.

I’ve worked at several radio stations where there were policies about shifting accounts. At one company, if a client hasn’t bought commercials in 60-days the account belonged to no one. Any salesperson was free to call and try to close a deal. At another radio station, if a client didn’t buy commercials from us but was heard on a competitor’s station, the salesperson had 30-days to sell them something or the account would be reassigned. Accounts could also be assigned for seemingly superficial reasons. Client A likes to play golf; so does salesperson B. Client C is involved in a certain charity; so is salesperson D. And, of course, there are times when a client requests a specific salesperson – management almost always obliges.

The plaintiffs in the lawsuit weakened their argument through their own sales results. When accounts were re-shuffled their paychecks got smaller. They weren’t able to generate more money from the new accounts given to them. Other salespeople, whose commissions went up, had success where the plaintiffs failed. In other words, the account assignment strategy worked.

There’s something else looming in the background of this case. Clear Channel may allow clients to purchase advertising directly via computer, bypassing salespeople altogether. I think most radio advertising will be sold in face-to-face personal selling. But for clients who know they’d like three commercials in morning drive and three more in the afternoon. If the typical commission is 15%, Clear Channel could offer the client a 10% discount for on-line ‘person-less’ purchases and pocket the difference.

Chris Conley
8.22.13