In some cases, the collapse in revenue during the COVID-19 crisis was breathtaking. Select industries, such as travel, entertainment, restaurants and retail, felt the full brunt of the stay-at-home order. Other industries were sideswiped too; normal orders for commercial and industrial goods and services were curtailed. Falling sales meant less revenue for sellers to book for sales compensation credit. Some organizations had to take draconian measures, including seller layoffs and terminations. Others less affected, hunkered down with partial pay protection programs for the sales force. However, the opening of the economy is going to provide great selling opportunities for those with the right products, the right pricing and the right sales force. Sales compensation needs to help accelerate these emerging revenue prospects.
Two Alexander Group surveys on sales compensation/quotas (March 30 and April 20) revealed that more than 80% of the companies were implementing pay protection methods to replace some or all lost target incentives for sellers. The most popular methods include pay guarantees (percent of target earnings), quota adjustments and formula changes. Some companies did a combination of these three techniques. The intent of these pay protection techniques is to replace a portion of the target incentive. The challenge had nuances. Not all sellers were impacted the same. Some solutions required a case-by-case assessment of the crisis impact on sellers’ earning potential. Management provided adjustments accordingly. One final observation suggests that sales management did not replace the full 100% of the target earnings, but instead some portion of this amount.
During the slowdown, sales departments have been active with customers using digital gatherings, demos and one-on-one virtual customer meetings. In some cases, business continues to transact at historical levels, but, in many cases, buying decisions were “put on hold.”
Now is the time to reset for the rest of the fiscal year. Sellers need to reactivate suspended opportunities and find new revenue. Select a date. July 1 is a good date. It marks the beginning of the third quarter for companies with a calendar fiscal year. Use this date as a leadership opportunity to fully reengage the sales force and their selling efforts for the remainder of 2020. Give it a theme: 2020 Second Half Sales Success Program. Develop a complete return-to-market sales strategy, including special pricing, buy early incentives, well-crafted value propositions, inspirational/aspirational sales leadership messages and updated incentive plans.
First things first: Discontinue all pay protection programs. They create a psychological crutch. The sooner you are past augmenting incentive pay the better.
Let’s get on with the job of increasing sales results.
Use these best revenue incentive solutions to accelerate sales revenue.
July 1 is arriving soon. Your sales team wants to succeed. Give them something to rally around. Give them strong leadership, commitment to revenue growth and provide rewards that reflect their post-pandemic sales success!
Sales Compensation Educator, Author, Speaker
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©2020 The Alexander Group – All Rights Reserved – Issue 200520
READ ALL ISSUES:
Sentinel Charts to Monitor Programs
Sales Comp: Linked Formula Design
Sales Quotas: Friend or Foe?
Sales Comp: Breaking the Rules
New Fiscal Year Sales Comp Plan
Sales Force Trends
Test Your Knowledge
You Can’t Hide From It
Getting the Mix and Leverage Right
2021 Sales Comp Hot Topic Findings
Should Reps Be Paid on Profits?
Sales Comp Starts With Job Design
Sales Compensation Victims
Global Sales Compensation
Are Salespeople Coin-Operated?
2021 Sales Comp Trends Findings
Is Sales Comp Just for Sellers?
Sales Comp: Rewarding Sales Profits
Pay Equity and Sales Compensation
2021 Sales Compensation Planning
Avoiding Common Misunderstandings
2020 Sales Comp Hot Topic Findings
What COVID-19 Found in the Shallows
Best Revenue Recovery Solutions
Save the Sales Force
Sales Seek to Protect Incentive Pay
Should You Protect Sellers’ Pay?
Use the Right Measures!
Are Comp Plans Industry Specific?
Careful About That Threshold
Commit to the Money, Not Mechanics
Should You Change Your Comp Plan?
Are sales comp costs variable?