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Redeveloping sales compensation programs

With uncertainty looming on how to cascade top-line growth targets down to sales reps, many media sales firms are making changes to sales compensation to accommodate market fluctuations while building stronger customer relationships. From parroting sales best practices across geographies to altering the AE/AM role to work within a team approach, media sales is pivoting away from simple sales compensation plan changes based on component guidelines to full-on program redevelopment that includes guiding principles that are aligned to company goals.

Are your sales compensation programs best equipped to drive revenue?

Geography, New Markets & Team Selling: What’s the Best Approach?

For the first time in the 20 years of Alexander Group’s annual Sales Comp Trends Survey 100% of media sales firms with a global presence are looking to make changes to their sales comp programs. Why? Developing a consistent sales model across markets brings new opportunities to reach global audiences and build global account relationships. To work together effectively, media sales is challenged with developing the sales strategies that transfer knowledge and best practices while incentivizing collaboration for team selling. Many companies have successfully developed global cross-functional teams to manage this unique problem and ensure consistency across markets.

The team approach is especially useful when growing market share and entering new markets. Starting with the team targets avoids initial competition until there’s a better understanding of what revenue numbers to aim for. We start with quarterly team-based targets until the market starts to mature; then we move to a more hybrid approach.

New Goals, New Expectations

In 2020, many media sales firms moved away from a pay-for-performance sales comp program; however, it slowly began to make a return towards the end of the year. There’s still (at least) one imminent question: while recognizing selling strategies have changed, how do we ensure we’re rewarding top performance? And further to that–what is top performance as it ties to overall firm goals?

Some media sales firms have opted to move their sales teams from quarterly bonuses to a long bonus structure to change mindsets to be more long-term and forward-thinking vs. individual, transactional wins: quality sales vs. quantity. A key goal of a successful sales leader needs to be establishing strong relationships with clients. Those deeper relationships are the ones that win at end of the day. Many sales leaders have made the shift to focus on client retention through recent economic disruptions. To do this, media sales firms simplified compensation schemes from multiple roles, teams, offices, etc. down to a handful of targeted, global programs.

On the flip side, companies in a high-growth, early-state business might trend in the opposite direction by creating shorter term sales compensation plans given the nature of their business. A target could be out of date within months if they were acquired or lost. Changing sales from annual commission schemes to quarterly helps address some of those early-stage challenges. If this is the approach you take, it’s important to be nimbler with shorter-term incentives that can change based on macro factors, including pandemic and acquisition of new rights.

Regardless of which path is best for you, it remains necessary to take performance and productivity activities (e.g., first time visits, onboarding, pacing, etc.) into account when compensating. When stakes are high, reviewing activity and pace are essential to get the conversion needed, as well as a requirement for different skills and roles.

Proliferation of Roles

It is clear that media is no longer focusing solely on the AE/AM. New roles are developing across the commercial organization to support customer segmentation by account size and industry, which is leading to changes in responsibilities and compensation.

The client solution/customer success role is evolving at a quick pace as it migrates into a higher-end consultative approach. While many media sales executives view the AE position as more valuable, others argue that Customer Success has pushed the envelope, putting pressure to transform AEs to not just renew but to also upsell advertisers. Providing a value proposition for customer campaigns leads to opportunities.

As advertiser demands continue to escalate, media sales firms are implementing innovative strategies to accommodate new markets, geographies and client expectations. With this comes the need to redevelop sales compensation programs to align to new coverage, roles and overall revenue goals.

For more information on how to best build your sales compensation program to incentivize the right productivity and performance for your sales team, sign up for our upcoming virtual Media Advisory Council session on sales compensation. Please contact an Alexander Group Media Sales practice lead for details.

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