Is your sales force an asset that will help the company rebound when the COVID-19 crisis abates?
Sales leaders seek to protect sellers’ pay during the COVID-19 crisis. 82.2% are planning some type of sellers’ pay adjustments according to results from the Alexander Group’s COVID-19 Sales Comp/Quota Survey. Conducted during the week of March 23, 2020, the survey had responses from 203 sales departments representing 340,000 sellers in the US. Sales leaders have yet to identify the amounts and techniques.
The following factors will influence how much pay protection companies will provide to sellers:
Companies are considering a variety of pay protection techniques:
What about companies facing dire conditions? Or, what about the reverse? Those companies experiencing a sales spike because their products are in high demand due to the COVID-19 crisis.
Those facing dire conditions can attempt to weather the storm by taking on debt, others might need to suspend all incentive payments, reduce base pay or reduce headcount through terminations and layoffs. Those expecting sales windfalls due to the COVID-19 crisis have different choices: allow earnings, redo payout formulas or cap earnings.
A significant drop in sales revenue can have a major impact on the sales force, including turnover caused by reduced earnings or company initiated terminations. Most companies consider their sales force a long-term asset possessing unique institutional knowledge about products, customers and company practices. The loss of the sales force due to turnover or terminations will directly impact a company’s ability to rebound from the COVID-19 crisis.
This is the second in a series about the impact the COVID-19 crisis is having on sales compensation/sales quotas.
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