Manage HR Magazine | Wednesday, March 13, 2024
Analytics and big data can improve accuracy and granularity in customer demand, sales projections, and sales force quotas, leading to fairer goals and a more motivated sales force.
Fremont, CA: Sales calls have evolved through digital and in-person channels, enabling salespeople to interact with customers and influencers. This has led to longer buying cycles, making forecasting and goal-setting challenging. Companies must develop new compensation models to provide clear motivation for salespeople, as smart revisions have a 50% higher impact on sales than advertising investments.
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Building Blocks of New Sales-Incentive Schemes
1. Role-Specific Incentives
In the digital age, companies require specialist sellers, solution architects, customer-care experts, and advisory salespeople to support frontline sales reps. Companies should set goals and behaviors for each role to motivate employees and use varying compensation models. Frontline sales reps and specialist sellers receive quotas or commissions for meeting sales targets, while solution architects, customer care, and advisory sales are incentivized to provide support.
2. Split Incentives
Sales managers should establish clear rules for engagement, outlining roles, teaming arrangements, and crediting methods to promote efficient collaboration among salespeople. A governance process should be in place to assess team contributions and resolve disputes. Offering "double rewards" may promote cross-regional and cross-functional collaboration but may not be economically optimal in the long run.
3. Presales Incentives
The complexity of products has led to extended sales cycles, requiring a staged compensation approach to motivate salespeople. This approach encourages short-term and long-term focus, allowing reps to collect commissions before the sale closes and offering a large payoff at the final deal closing. A balanced portfolio of deals with long and short sales cycles can also benefit.
4. Omnichannel Incentives
Customers increasingly use human and digital channels to engage with suppliers, causing sales reps and channel partners to be sometimes left out. Leading companies focus on making online or mobile sales an asset for salespeople and channel partners. They reward reps for their involvement in online sales and give credit for their consultation and persuasiveness in the early stages of the buying process.
5. Advanced-Analytics-Based Target Setting
Sales reps' reduced involvement in the sales process makes it challenging for companies to forecast customer demand and set goals. Analytics and big data can improve accuracy and granularity in customer demand, sales projections, and salesforce quotas, leading to fairer goals and a more motivated sales force. Predictive algorithms can estimate demand using internal and external data sets, improving forecast accuracy.
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