Steve MarleyPrincipal,ZS Associates
Chad AlbrechtPrincipal,ZS Associates
Mike MartinPrincipal,ZS Associates
Justin LaneManager,ZS Associates
I have been reading several books on the topic of behavioral economics in preparation for an upcoming conference presentation on behavioral economics and its relationship to sales compensation. I found many fascinating studies showing how humans respond to economic incentives in certain environments—results that may have parallels to your sales incentive program.
The topics and studies that most interest me are the ones validated not only with human studies but also primate studies. When the primate studies show the same finding as the human finding, it shows that there are some elements to our behavior that are innate to our very being and cannot be explained by a local culture or any other phenomenon – it is in our DNA.
If your company launched a new product that has not lived up to expectations, chances are that the bonus plan has not lived up to the rep’s expectations, either. What should you do, if anything?
I have to admit, I’m not a huge basketball fan. As a Canadian, I grew up watching and playing hockey (yes, the stereotype is true for me!). While growing up in Canada, I noticed college sports also don’t achieve the popularity or business-like marketing appeal you see with college sports in the United States.
Social selling is the use of social networks to drive revenue through external customer engagement and internal collaboration. As new selling models, such as social selling, change buying and selling behaviors, it is imperative for organizations to determine how they should react.
For most decisions in life, it’s usually easier to say “yes” than “no.” But often you have to say “no” to something in the interest of saying “yes” to something else. For example, to spend more time with your family, you might have to say “no” to more volunteer work.
About a year ago, I wrote a blog post – “Why Rank Plans Can Bring Out the Best – and Worst – in Your Sales Force” – about the risks of internal competition that can result from a rank plan. I still believe that risk exists, especially with smaller sales forces where helping a handful of people could have a significant impact on your rank spot. However, from my recent conversations with sales leaders, I have heard some compelling arguments for “selective competition.”
Well, we are one month into the 2014 calendar year, and undoubtedly some of us are already considering changes to our sales compensation plans.
I have worked with some companies that have taken a “set-it-and-forget-it” approach to their sales compensation plans. However, that approach requires a certain culture and focus when the going gets tough. In my experience, most companies evaluate plans and tweak them for atypical or extreme situations with some regularity.
Inside Sales is truly becoming a formidable force. In the last 10 years, the number of inside salespeople has grown at a double digit compound annual growth rate (CAGR). While most companies agree about how inside sales can be a cost effective, highly efficient way to increase sales, they do not universally agree on how to incent them.
This year, my wife and I made a New Year’s resolution to eliminate the clutter in our house. I do not consider us to be messy people. I think we just have too many little things and no place to put them.
I find a similar feeling occurs with some companies as they kickoff their 2014 incentive plan.
When meeting new fellow sales compensation practitioners and clients, one of the first things I do is ensure we are all speaking the same language. That is, that we’re using the same words to describe the same things. One of the most common set of words to clarify is “quotas,” “goals” and “objectives.” In some companies, an objective is the salesperson’s individual quota, while in other companies an objective is used to describe something more akin to an MBO. Fortunately, these three terms can be reasonably easily interchanged with minimal confusion.
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