Motivating the sales force for your next chapter

By Sarah Van Caster

September 23, 2020

This is the third post in a three-part series following our recent webinar series with Slalom Consulting, entitled Restarting a stalled revenue engine.

Selling in 2020 has been a lesson in managing transformative change. Individual sales reps have had to learn new sales techniques—less time meeting face to face with customers, more time in front of a laptop. The sales channel landscape has changed, as certain types of retailers and resellers have thrived while others have struggled through different phases of the coronavirus pandemic.

For sales leadership, revenue expectations and operating models have also shifted dramatically. After unpredictable outcomes in many industries and geographies in the first half of the year, new paths forward are starting to emerge. For organizations that fell short on their early year revenue targets, there is more than one way to get back on track. The question is how to do that in the most efficient way possible.

Sales incentives in the next phase of recovery

Sales incentives are meant to motivate sellers to behave in specific ways. When designed well, they can result in substantial and fast-acting changes in behavior. And when corporate strategy needs to shift, as it has for many companies this year, sales incentives are one of the first operational areas that need to shift along with it

“We encourage and coach leadership to use this time to assess the sales strategy, and how it aligns to corporate strategy and the customer strategy,” said Jessica Kane, Solution Principal with Slalom Consulting. These components of strategy need to inform one another, and ultimately be reflected in the customer experience.

Say, for example, that the economy has made it difficult to find new buyers, and your company is seeking instead to drive growth within its existing customer base. In terms of sales incentives, this might require specific types of commission payments, and new SPIFs or contests. You could consider quota adjustments to cross-sell or upsell targets and eliminate caps to promote expansion deals within current accounts.

This requires tradeoffs within an incentive structure that focuses mainly on short-term results. For example, can you provide quota relief that keeps reps motivated in the short term to avoid attrition in the long term? If sellers face no penalty for deep discounts, they may aggressively pursue opportunities without considering total-cost-of-sale implications, or throw in free services that are costly to the bottom line.

Furthermore, many sales incentive programs are tied to revenue won and sales volumes. This places a major priority on fast-selling products and services, with deals that can close within a short period of time. Can you adjust compensation plans to drive a deeper level of engagement with clients? How do you capture repeat business and reduce customer churn during the next economic downturn?

Finding the right balance

In many industries, sales teams are working harder than ever without getting the results they need. With new scrutiny placed on budgets, the old ways of doing business no longer apply. For companies that have been seeking to make a shift, says Kane, “this is a good opportunity to reset.”

Sales organizations should consider evaluating their incentive compensation programs, and re-balance leading measures such as call volumes and discovery meetings with lagging measures tied more directly to revenue. Activity-based incentives can help alleviate sales budget concerns by promoting low-cost activities that help accelerate deals or build customer satisfaction. Incentivizing activities that advance deal stages can also build sales team morale during a time when many deal cycles are slowed.

Analyzing these programs can be complex, requiring the ability to model different sales expense and growth scenarios side by side, potentially across many sales roles, product lines, or customer segments. Evaluating “what-if” changes in real time using your sales forecast rather than historical data helps leaders make agile, data-driven decisions. A comprehensive sales performance management solution that connects incentive compensation management with territory and quota planning can provide this level of insight.

As you start preparing your compensation plans for the next phase in the global economic recovery, ask yourself: What do we need our sellers to achieve in order to meet our business objectives?

Check out our recent series of 10-minute webinars conducted with Slalom Consulting, entitled Restarting a stalled revenue engine.