May 9, 2019 | Written by: Kevin Gray
Categorized: Sales Performance Management
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The story your sales team tells your customers is the front-of-the-line growth driver for your company. The most current research is in general agreement that a good sales pitch is backed up by a well-crafted story. Communicating your sales message through a story can create trust, drive interest and retention, and emotionally motivate your customer to act.
Enabling your sellers with skills like storytelling is vital to success. But equally vital is taking away the barriers that impede their success. The number one way to do so is to employ an incentive compensation system that works—a system that is easy to understand, instills the right behavior and provides transparency to sellers and their management, as well as timely and accurate payments. Has your team implemented a system that allows your sellers to focus on the task at hand: spreading their sales story? Below are six ways your sales compensation system might be getting in the way:
- Slow, methodical Excel entry and calculation
Many companies rely on Microsoft Excel spreadsheets and complex formulas to calculate sales compensation by hand. Because this is a time-consuming process, reporting often lags significantly behind activity and is more prone to inaccurate payments. Managing these intricate manual spreadsheets and trying to play catch-up to seller activity consumes the time and focus of your sales operations team, preventing them from concentrating on the external marketplace. It can also cost your organization millions in overpayments.
- Anxiety over proper sales compensation
In addition, compensation calculation errors can often result in mistrust on the part of the sales team, which wants to be certain they are receiving appropriate compensation for their wins. Often, sellers will create “shadow” compensation reporting systems to ensure their compensation is being correctly calculated. Again, this is time spent in manual entry rather than engaging with the customer base.
- Lack of communication with other regional departments or HQ
Approval is a key aspect of the sales compensation process. When that process is bogged down through a series of exchanged emails, corrections and the associated lag time, sales operations’ time is wasted. Some companies such as Getty Images ask regions to provide input on how to define targets and calculate targets over actuals. Without an effective SPM solution, these methods further complicate the process with an additional round of manual approvals and emails, and create a complex system of differing spreadsheets and formulas. The development of a successful SPM system can increase communication and, as Getty Images learned, produce a system that encourages regional sellers to step outside their comfort zones.
- Limited introductory training
Part of managing an effective sales team depends on hiring talented sellers. Even the most natural sellers, however, will not generate the desired company growth without adequate onboarding and training. The Gartner Magic Quadrant for Sales Performance Management notes that modern SPM solutions include “training systems that feature crowd-sourced knowledge, social interactions and mobile access.”
- Outdated or insufficient ongoing educational support
Training of the sales team does not stop after onboarding. Crafting a good sales story demands an intimate understanding of product offerings and new releases. To this end, enablement sessions to introduce new products or sales incentive plans, as well as announce new regulatory requirements, are a must for a fully effective SPM plan.
- Poorly allocated sales resources
As a company grows, so too does the complexity of its sales organization. To continue feeding that growth, organizations must develop a territory assignment plan that allows sales operations to tailor assignments, compensation and exceptions to territory definitions and product offerings. A well-organized system to manage geography, payee, product and customer variances leads to better-allocated resources and fosters trust at the geographic level. A system that is overly complex, inefficient or burdensome leads to confusion, waste of resources and lost time.
One, a combination or all of these setbacks may be preventing your sales team from focusing on what is crucial to growing your business: the customer. To improve your sales strategy and engender company growth, implement a more effective sales performance management system. When these issues are resolved, your sales team can refocus on crafting the narrative of your brand, and using that story to build a loyal customer base.