Gas Prices Spike | Sales People Take Action

LEAPJob polls sales people on the impact of rising fuel prices

Jeremy Miller

Gas prices are soaring! They have gone up 20% since January 2008 and 30% since June 2007. The rapid rise at the pumps is directly impacting sales people and their wallets.

In June 2008, LEAPJob polled 700 sales people on the impact of rising fuel prices. The results have been striking. Companies' car expense plans are out of date, and sales people are responding. We have seen a grassroots change as sales people have reduced their driving habits to deal with rising fuel prices. And based on the respondents' feedback, companies aren't even aware of it.

Companies have failed to keep up with the times. Over 65% of respondents said their companies have not updated their driving expense plans since 2006. This is amazing. The average price of gas in Toronto in June 2006 was 94 cents, and in just two years it has spiked to 131 cents per liter. A sales person driving 500 kilometers per week is now paying an additional $185 per week or $9,620 per year. A car allowance of $500 to $600 per month is light. It doesn't even cover the cost of gas!

Sales people have responded. Over half of the respondents have reduced the number of trips they are taking. This is a remarkable thing for a sales person to do, because it is their job to visit customers. If they are making fewer trips then they are seeing fewer customers. This will directly impact how they sell. By reducing their activity levels, sales people will have to be far more strategic in their selling activities if they want to achieve their quota.

What blew me away in this survey is companies still say, "It's business as usual." 70% of companies have not adjusted their expectations for how much sales people drive. Are they aware that half their sales reps are reducing their driving habits? Are they aware how their outdated expense plans are impacting their sales people? Companies really need to step up, and respond to the spiking fuel prices.

Gas prices are top of mind for sales people, and employers will see this when they try to recruit new sales talent. 78% of respondents said the driving expense plan is an important part of their total compensation. Sales professionals are negotiating better expense plans when they accept a job. They want to make sure the plan is fair, and they won't be paying out of pocket for an outdated plan.

I can only hope that gas prices stabilize, but the signs suggest they will continue to rise. If we continue on this trend traditional sales models are going to change. At some point it is going to be too costly to maintain an outside sales force. In 2 years we have seen a 30% spike in driving costs. If it doubles again, do you think sales people will still be on the road?

Highlights from the LEAPJob Gas Survey:

  1. 53.5% of respondents are reducing the number of trips or sales calls they will make, while another 20% are waiting to see if their employer will improve the expense plan to account for higher fuel prices.
  2. 61% of respondents said the price of fuel will have a direct impact on their next vehicle purchase.
  3. Companies' expense plans are out of date. 65% of companies have not adjusted their driving expense plans in the past two years. 23.5% of companies have adjusted their per kilometer allowance, 4.6% of companies have adjusted their monthly car allowances, and 6.8% of companies have adjusted both.
  4. Most sales people are waiting for their employers to respond to rising fuel costs. Only 28% of respondents are negotiating higher expense plans with their employers. 47.9% said they are not looking for a new job even though their expense plans were obsolete. That being said, nearly 25% said they will look for a new job over this issue, and 27.5% are on the fence.
  5. 78% of respondents said the driving expense plan is an important part of their total compensation. Expect new recruits to be negotiating higher expense plans.



Jeremy Miller is a Partner with LEAPJob, a sales recruiting firm in Toronto, Canada. LEAPJob recruits sales professionals and sales leaders for many of Canada's most recognized companies. Their clients range from the Top 50 Employers to smaller organizations building their first sales force. You can reach Jeremy at Jeremy.Miller@LEAPJob.com or 905.281.3090, Ext. 22. For more information on LEAPJob please visit http://www.LEAPJob.com.