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Diana Ceballos 03.17.2022 6 min read

Why is seasonality important for retailers to manage sales commissions

The definition of seasonality in the retail business has evolved — primarily shaped by the pandemic — over the past two years. Seasonality, according to Nutshell, refers to fluctuations in sales revenue caused by external factors that occur on a predictable schedule around the same time(s) every year. In simpler terms, it means analyzing historical data to know when your business will do well and when it won’t. 

But this is easier said than done. Factors like the pandemic, the Russia-Ukraine conflict, rising inflation, and unpredictable markets have added a spin to things. Now, retailers must grasp the nitty-gritty of seasonality so that they can turn the knowledge into a competitive edge. 

Understanding seasonality ensures that your business forecasts selling trends better. You can then equip the sales team with the right tools and enablers to make the most of the market fluctuations. 

For example, your B2C business usually faces a 3-month slowdown every June to August. Focusing your attention on the sales team and gifting them with flexible compensation plans will boost their morale and help beat the downturn. 

No two branches are the same; they face different customers, different scenarios, and varying seasonality. Similarly, the same commission management process will not work for all branches. Flexible compensation plans give sales teams the freedom to adapt their work to market fluctuations. If off-season sales are low in one part of the country, offering incentives for closing deals there will encourage sales professionals to go the extra mile. Similarly, if Key Performance Indicators (KPIs) are flexible and tweaked to factor in slowdowns, then sales staff realize the company is empathetic. It will boost collaboration and confidence.

 

What is causing the change in retail seasonality?

The incessant rise of online shopping, the pandemic, changing consumer behaviors, and non-traditional weather have contributed to the changing seasonality in the retail industry. 

To combat this, sales professionals need to be equipped with resources that can turn the deal in their favor. An effective sales compensation software that enables commission automation, provides easy integration with Point of Sale systems, enables simple goal creation process, and allows commission tracking and reporting to compare sales viz-a-viz commissions paid allows the sales team time to focus on deals. The sales team gets full visibility of its commission payout process and is free of mundane tasks like logging and reporting sales and commissions.

 

How can sales teams make the most of seasonality?

Start by planning your sales and tailoring the commissions accordingly. By laying down your company’s sales goals, you give your team a sense of purpose. Offering bigger compensation for tougher deals; tailoring incentives based on locations; different compensation plans for off-season motivate the sales professionals.

Simple, one-size-fits-all compensation plans do not work anymore. Flexibility in terms of branch-wise sales or tracking goals and sales by different KPIs will push the sales team even during the off-season.

 

Why is seasonality important when managing sales commissions? 

If your sales team is raking in high commissions in December and nearly nothing in March, the frustration behind going to work during the slowdown is understandable. It would be impossible to stay motivated.

This is precisely why factoring in seasonality helps maintain balance in sales commissions. A transparent sales commission tracking software gives the sales staff full visibility about their performance and helps keep the morale high.

Modern selling requires cutting-edge tools. At Blitz, we believe a distinct approach to sales compensation would help factor in seasonality and bring success to your organization. To find out more, contact us now.