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Is Sales Compensation Just for Sellers?

The short answer is no! You should also consider other roles for sales compensation eligibility.

Research indicates that “selling” is moving beyond the traditional sales jobs. Roles, such as pre-sales, sales development representatives and post-sales customer success managers, have elements of selling making them eligible for incentive compensation. Do you reward these jobs for sales success?

Sales compensation pays for “persuasion” success. Helping buyers make informed commitments is the basis of a selling role.

By replacing the word “selling” with “persuasion,” the lens of eligible jobs expands. Selling is the act of informing customers of solution offerings, helping with decision making, securing purchase commitment and ensuring customer satisfaction. A closer look at jobs along the sales path/buyer journey reveals that a number of roles help with some or all of these efforts. Should you reward for these successful persuasion outcomes?

Here is the challenge. Traditional sales compensation practices link incentive pay to revenue outcomes. Not all of these roles produce booked revenue. While some are responsible for securing revenue such as renewals, others contribute to the sales progression, such as securing qualified leads. Do these successful persuasion events warrant sales compensation eligibility even if revenue has yet to be booked?

Digitally enabled selling systems now provide the platform for multiple parties to guide the buyer through the purchase process. What were once silo organizations, such as marketing, sales and service, are now becoming connected, integrated functions with the seamless hand-off of responsibilities from one sales progression task to the next.

In Chart I, some companies are paying for persuasion prior to booked revenue for select jobs such as lead generation representative, business development managers and even territory sales.

Sales Compensation-Brief-December-2020-Alexander Group, Inc

And, the types of measures being rewarded include the following as displayed in Chart II. The top three persuasion activities include number of new opportunities, number of leads and number of meetings.

Sales Compensation-Brief-December-2020-Alexander Group, Inc

Non-Sales Jobs for Incentive Consideration

 While the trend for rewarding “non-sales” jobs is emerging, many still do not provide incentive payments. However, here are the jobs for incentive participation consideration outside traditional sales roles.

  • Sales Development Representative. Sales development representatives seek to identify qualified leads. These leads may be the result of proactive outbound calling, “contact me” web inquiries and inbound inquiries. Consider rewarding on number of new, qualified leads with the incentive modified by close rate. Use an at-risk incentive plan.
  • Business Development Manager. Often assigned to find and cultivate new logos, business development managers refer qualified opportunities to sales resources. Consider rewarding on number of new logos, estimated revenue opportunity, with the incentive modified by close rate. Use an at-risk incentive plan.
  • Pre-Sales Support Personnel. Pre-sales support personnel working with sales personnel assist with configuring the proposal, often ensuring the right technical specifications. Consider rewarding for total closed new (non-incremental) revenue for their assigned sellers. Use an add-on bonus award.
  • Customer Service Job. After-the-sale customer support helps facilitate future purchases and customer satisfaction. Responsiveness, issue resolution and confirmation of customers’ satisfaction are the hallmarks of this role. Consider rewarding for total revenue of served customer population augmented by customer satisfaction ratings or promoter scores.
  • Customer Success Manager. Customer success managers are jobs now employed by Software-as-a- Service companies to ensure customer adoption and potentially the expansion and renewal of contracts. Other industries are adopting recurring revenue models too. This role is key to keeping existing customers and ensuring purchase value realization. Consider rewarding these jobs for customer adoption and, if responsible for renewals, paying incentives for those revenue dollars.

 Summary

Sales compensation is no longer just for sellers. Others who are influencing (persuading) the customer to meet with a salesperson, help configure their purchase requirements, ensure customer satisfaction and ensure solution adoption are all candidates for sales compensation eligibility.

 

David

David Cichelli
Sales Compensation Educator, Author, Speaker
Connect with me on LinkedIn!

 

 

©2021 The Alexander Group – All Rights Reserved – Issue No. 200121

 

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