Sales compensation, when leveraged appropriately, can be the difference between winning or losing in the digital age. Today’s dynamic media landscape requires integrated print media companies to continually question and reinvent their go-to-customer models. These companies generate revenue from both print as well as digital offerings. Thus, they must leverage every sales management tool available to remain competitive. The sales compensation program is one of the most effective management tools for driving change in selling behaviors.

One approach that works exceptionally well in this environment to align strategy, job objectives and sales compensation is the digital link. A linked design is simply a way to align goals that may be at odds with each other. This is important because the shift to selling digital solutions is a great challenge for integrated print companies. Digital solutions are generally far more complex, both during and after the sale, than traditional print solutions. As such, they are outside the comfort zone of many incumbent sales representatives. Digital solutions often require a smaller monetary investment than traditional print offerings on a spend-per-campaign basis. This dynamic causes friction between total revenue (i.e., “what keeps the lights on”) and digital revenue (i.e., “the future of the business”). Digital is the undeniable future of media advertising; sales compensation is a mechanism for balancing priorities. Leveraging the digital link can be a great strategy to position the sales force for success.

In the following illustrative example, ABC Media has created a sales compensation program for their core sales representatives that includes two measures: one for total revenue weighted at 70 percent and one for digital revenue weighted at 30 percent. The measure weightings reflect the balance placed on total revenue versus digital to sustain a profitable business while keeping an eye on the future. Revenue leadership sets goals independently for each measure; every dollar of digital revenue attainment also counts toward the total revenue measure. In order for sellers to maximize their above-goal earnings on total revenue, they must achieve their digital link. In this case, the link threshold is set at 100 percent of the digital revenue performance goal.

Link or Sink chart

The digital link communicates to the sales force that while total revenue is important and highly weighted, achieving the digital performance threshold is necessary in order to maximize earnings potential. The link can also work inversely if the sales compensation program design more heavily weights digital versus total revenue. Of course, sound strategy and sales compensation design alone are not sufficient for successful change adoption. Therefore, there are a few ‘musts’ to ensure the success of a linked sales compensation program. Organizations…

  • Must obtain buy-in from sales management, particularly the first-line sales leaders, in advance of roll-out of the new program
  • Must provide tools (e.g., Excel-based calculators) to illustrate how the linked design works and how to win with the new program
  • Must keep in mind that sales compensation is only one element of effective sales management. It will not solve for all challenges
  • Must clearly communicate to the sales force what has changed and why, as well as answer the question, “What’s in it for me?”

Read about more insights on leveraging sales compensation in order to thrive in the digital age.

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Categories:

Insight type: Article

Industry: Media Sales

Role: C-Suite, Sales and Marketing Leadership

Topic: Digital, Sales Comp