Today’s guest blog is from Mark Donnolo, Managing Partner with SalesGlobe, and Michelle Seger, a Partner with SalesGlobe.
These are unpredictable times in sales. We see it with our clients across all industries. And we’re seeing it in the results from the COVID-19 Sales Recovery Assessment we developed to help companies evaluate and plan for a post-pandemic future.
In round table discussions with sales executives, we’ve heard plenty of talk about sales compensation. Companies are at looking at ideas such as paying spot bonuses, lowering goals, and raising commission ramps.
Let’s review some of what we’re hearing, along with advice to help organizations respond to the fears and plan for recovery.
Address Sales Organization Fears
Reps are concerned about compensation. But since no one knows how long this will last, here are alternatives to consider:
- Shifting the Focus: Help the sales organization concentrate on the longer-term process of building the pipeline, not the immediate sale.
- Booking Deals Further Out: If customers can’t buy now, book deals for a timeframe beyond the curve.
- Working on Strategic Account Planning: Get the team together for each strategic account; discuss what you can do for those accounts in the short-term.
- Understanding What your Sales Team Needs: This could include flexible schedules, childcare, or help with elderly parents.
Help Customers Through the Crisis
For customers as well, fear is at the root for many. Help them work through it. Directions to explore may include:
- Focusing on helping, not selling. Shift your team’s focus away from transactional short-term gain; working with customers on their longer-term business strategy goes a long way toward building trusted advisor status.
- Recrafting the value proposition. Show how your company can support your customers during this crisis. Get your sales leadership team together and sharpen your on-the-street messaging.
- Implementing special pricing, offers, and policies. Shift payment policies to ease the customer’s financial burden. Better to make this investment now and help your customer than to take a zero with no future benefit for your organization.
- Communicating with customers on a regular basis. Reinforce what you’re doing to help them. Reach out when you have nothing to sell.
Find Real Growth Opportunity
There may be an opportunity out there that your sales organization hasn’t uncovered. Directions to explore may include:
- Optimizing territories. Focus on a smaller set of more lucrative accounts and shift under-covered accounts to reps that have sales capacity to improve overall productivity.
- Selling virtually. Companies have been shifting from in-person meetings to video conferencing as a norm. It’s exciting to think that post-crisis you could increase your team’s productivity by focusing travel on impactful face-to-face meetings and redefining how to increase the value of customer interactions.
- Change your offers or partner with other organizations. Consider modifying your offers or products to better fit evolving customer needs.
- Form a customer ideation team. Determine how your company can help customers and find new opportunities.
Assist the Sales Team Financially
With the fears and concerns described above in mind, you can take a look at the sales compensation plan. Consider:
- Creating short-term bonuses for attaining key milestones. What keeps your business moving ahead? It may be creating proposals, testing prototypes with customers, or building pipeline. Link milestones to progressive bonuses
- Adjusting sales quota timing. Instead of reducing quotas, consider weighting them toward the backend of the year to allow reps time to catch up once we pass the COVID-19 curve.
- Adjusting sales quotas. If catching up isn’t possible by year-end, consider reducing quotas as a back-up measure. You’re setting a precedent. This has to be within your compensation governance so that you don’t set the expectation that it will happen again unless there’s a situation of a similar magnitude. Instead of making a broad quota adjustment for the organization, do it in a targeted fashion based on each territory’s situation.
- Lowering performance thresholds. If your sales compensation plan has performance thresholds, consider lowering that threshold point to ease cashflow. If a large portion of your organization performs at or around quota, by lowering thresholds, you are essentially creating a pay advance for compensation they will ultimately earn.
- Modeling your compensation solutions. Once you create targeted sales compensation solutions, financially model them under a range of scenarios so you understand your risks and expected investment
We hope these suggestions help you come up with practical solutions. Your response to the crisis will set the tone and settle your team to concentrate on moving ahead and helping their customers solve their problems.
For more insight and ideation around this challenge, contact us at email@example.com or firstname.lastname@example.org.