Learn how organizations and sales structures are changing and aligning strategy, people, behaviors, and goals to meet their targets in 2020 with Findley’s Tom Hurley and Dan Simovic.
Over the past few months, our clients have been talking about sales incentives. The pandemic has disrupted the marketplace, forcing organizations to rethink their business development strategies, revisit sales goals and incentives, and potentially restructure the sales organization. It is primetime to get serious about sales compensation planning and design. It’s about more than “best practices”. It’s about “best thinking” based upon changes in the market and how your organization can adapt to the sales function. The topics include:
How effective were you in selling your products and services? How effective are you now in selling your products and services? The answer has probably changed – because the market most certainly has changed, too.
It has taken years of strategic and tactical work to cultivate an effective sales organization with a customer base that values your products and services. In the span of a few months, the pandemic has done more than simply threaten the viability of your sales function. For many sales organizations, it has triggered a tsunami-like setback that demands your attention.
Social Distancing = Customer Distancing
Selling products and interfacing with customers looks completely different than it did this time last year. It will look different going forward. Similar to “social distancing,” we have “customer distancing,” mandating a movement to a more “virtual” commercial organization. This economic disruption has particularly impacted outside sales organizations. You can no longer grab lunch with a client, readily schedule a visit with decision-makers, or conduct presentations in front of key team members.
You can still sell, but your approach needs to evolve.
Seven Market Strategy Factors
Most organizations need to rethink the go-to-market pay strategy and commensurately align expectations to a wildly different set of market realities.
This assessment needs to incorporate seven key areas. They include:
1. Understanding how existing customers and prospects have been impacted by the rapid market changes
Although more organizations will find that their businesses have been impacted negatively, some are experiencing positive impacts. In some industry segments (protection equipment, disinfectants, pharmaceuticals), sales could even become easier, albeit more competitive. Not all of your customers (or prospects) will have been impacted in the same way.
You’ll need to consider the pandemic’s impacts on:
Availability of capital
Shipping and logistics
2. Identifying which customers use more than one product or service
You will need to adapt your sales strategy and approach to accommodate customers who are impacted positively in some areas of their business and negatively in others. One size will not fit all.
3. Rethinking the Customer Experience
Customer behavior patterns have changed. The decision-making and buying processes have transformed into a growing reliance on technology. Do you have digital content that provides the brand experience that you want your customers and prospects to have? Does it communicate the value of your products or services? Can you innovate your service delivery model to meet your clients’ needs – and stay competitive?
4. Determining how to personally engage customers in a meaningful way – at a distance
This is not an easy task for some outside salespeople who are not accustomed to a more impersonal and transactional sales process. Some are more accustomed to long-term relationship building and will be challenged by the new approach. It’s a lot easier to say “no” over the phone than it is in person. This will require establishing new processes and building new skills and competencies that will be necessary to be successful.
5. Re-examining what you’re measuring in your commercial function
Changing the selling approach necessitates a complete re-evaluation of the established measures within your commercial function. It’s time to revisit the old metrics and adapt the approach to managing performance in light of revised metrics.
6. Aligning the organizational structure to the new market realities
This inherently means adjusting all commercial roles, responsibilities, reporting relationships, and accountabilities to optimally support the customer and ultimately increase new client acquisition.
7. Adapting the sales incentive plan to align with new behaviors and expectations
This effort will focus on thoroughly linking sales behavior to incentives. How will you retain your top performers? Some organizations may not have done this prior to the pandemic; it’s an absolute necessity to evaluate it now.
Addressing these seven areas is the starting point for aligning your sales organization with the current situation. With the market shaken by the COVID-19 pandemic, it’s the right time to adjust your approach. You can’t stop the wave, but you can do more than just ride it – you can get ahead of it.
Findley has structured an approach to facilitate a complimentary rapid assessment of your sales organization, and provide some deeper insight into the areas that you need to consider in refocusing your organization to succeed in today’s market realities. To learn more or to schedule a complimentary session to discuss your sales organization challenges, contact Dan Simovic with the form below.
The COVID-19 pandemic continues to severely impact the global economy as the world stays locked down. Countries are continuing to mandate quarantines and social distancing practices to contain the pandemic. The impact and magnitude of this crisis on the economy has created great uncertainty. A question many companies are struggling with today is how to handle their sales force, especially since the majority of these employees earn their living through incentives and commissions.
It is important to recognize that although we are weathering the same storm, not everyone is in the same boat. Sales team members who rely on face-to-face interaction and extensive travel had their world flipped upside down as it came to a startling halt. The ability to foster relationships, generate new leads, and demo products is limited to phone, emails, and video chats. Other sales team members are falling into windfall situations selling products in high demand industries, such as sanitizers, cleaning equipment, and personal protection equipment. Both circumstances can cause the sales incentive plans to deliver pay at levels that were not planned and require a review of plan designs.
Assets and Business Strategy
Before diving into revamping a sales incentive plan, it’s important to first think about the overall business strategy. How has the crisis impacted your company and is it time to re-pivot the strategy? In addition, it is important to check-in on the most important assets of any company, its people. Below are questions to consider:
How has demand for our products changed?
Do you have a pulse on your talent?
Is the company providing the right tools and technology to maximize employee potential?
Are we structured properly support the “new” environment?
How has the crisis impacted employees mentally?
Are channels of communication open and transparent?
Sales Incentive Plans
Once you review the business strategy and determined the “new normal”, it would then be an appropriate time to redesign or tweak the sales plan to ensure that it continues to align with the overall strategy. It is clear that in more cases than not, sales forces are taking financial hits. According to recently published surveys, it is expected that over 70% of companies expect COVID-19 to negatively impact on sellers’ pay by at least 5%. Companies need to determine how they want to intervene and adjust their employee’s potential earnings.
Some key avenues to explore are:
Paying draws to make sales employees “whole” or “partially whole” so they do not suffer from a financial hardship;
Using historical performance measures and results rather than current year sales;
Reducing quotas based on a revised business outlook;
Enhancing rewards through team goals rather than an individual focus;
Adding sales performance incentive funds (“SPIFs”) where possible;
Addressing windfall or bluebird situations, where the terms and provisions of incentive plans do not adequately reflect the possibility of unusual situations, such as the COVID19 pandemic, that may result in excessive and unwarranted payments due to sales team members;
Ensuring high performers have the opportunity to earn previous pay levels and provide retention elements into their pay mix as they may be poached by competitors; and
Pausing a sales plan completely and allow for discretionary payments based on business development activities.
We are living in a world where there is more uncertainty than ever, but we must hope that there is a turn around the corner. When the economy starts to come back, companies who are proactive at retaining their sales talent will come out of this stronger and on top.
Questions or need help evaluating your organization’s sales incentive plan options? Please contact Jen Givens or Tom Hurley by filling out the contact form below.