Solution Selling Compensation Strategies That Work

a business man is chasing a huge carrot dangled in front of him

One of the most challenging and important responsibilities of sales leaders is to design a compensation plan that gets the desired results in a way that makes sense for the individual sales reps, the sales team and the company as a whole. Certainly, a major goal for most sales leaders is to ensure that the sales compensation plan would help to maximize sales revenue. But how do you create a compensation plan that drives revenue without sabotaging other important (and often conflicting) goals such as target client revenue, win-rate, customer satisfaction, portfolio mix, high quality and profitability.

It is not hard to imagine that salespeople who are measured and rewarded on revenue growth alone, may be eager to pad their pockets with cash by selling to anyone who will buy rather than wisely discriminating about the customers the company hopes to profitably help and hold onto for the long term. For example, a recent client changed their go-to-market strategy to sell comprehensive solutions to large accounts and to move away from selling transactional products to anyone who would buy them. Their compensation plan did not change. Sales reps were bonused on meeting or exceeding revenue targets. So while the change in strategy made sense strategically, the compensation plan did not help to incent sales reps to follow the new plan. Accordingly, they kept selling what they were used to selling and predictably missed their targets.

It is also not hard to imagine salespeople who are measured and rewarded on revenue having a conflict with delivery teams who are measured and rewarded based upon profit. For example, a recent client found that their delivery teams where cutting corners at clients to meet tight budget parameters. This created dissatisfied clients and higher account churn – which eventually negatively impacted revenue.

Smart sales leaders think through (with their teams) any unforeseen consequences of whatever incentives you offer as carrots to your sales force to minimize problems and to motivate the desired behaviors.

The good news is that you don’t need to be an expert at solution selling training to identify a simple example of an incentive program gone wrong. We have all had a favorite store where we knew we could get attention and help in finding just the right item. I certainly did. Then, suddenly there was a drastic change in the way I was treated. Instead of a clerk with time to spend helping me, they hurriedly answered my question and went to help someone else before I could find what I needed. My retail “helper” was impatient and looking over my shoulder to grab the next customer before I was truly served. What had happened? I learned that sales clerks were no longer being paid according to how well they served the customer but by how many customers they talked to in a given day. The unforeseen circumstance? They lost me as a loyal customer. I’m sure that is not what their new pay plan intended to accomplish.

Before you implement a new rewards and recognition program designed to incent your sales team, be sure you:

• Are clear on the purpose, desired behaviors and consequences.
Know what your customers value about the way you do business. Are they interested, for instance, in service before, during and after the sale? Know, too, what would make a real difference in your revenue. Should you focus, for instance, on a different type of customer or, perhaps, on fewer but larger deals?

Identify your sweet spot and make sure you don’t jeopardize the opportunities to capitalize on that sweet spot by incentivizing the wrong behaviors in your sales team. Choose what behaviors will promote your sales strategy and be sure those are the behaviors you reward.

• Understand what would truly motivate your team.
Sure, there are tangible rewards for performance above and beyond like cash bonuses, company-paid vacations and company cars. But research has shown that often the intangible rewards are just as effective. Consider giving a day off or allowing more flexible hours. Regardless of what carrots you offer, make the award public whenever it makes sense. Thank each honoree in front of others so they have the recognition they deserve. Make sure that the rewards on offer are equal to what you are asking people to achieve.

• Set agreed-upon guidelines.
The best sales compensation plans are those designed collaboratively by both sales managers and team members. This way the strategy, goals, roles and rules are well-known to everyone and accepted as fair and worthwhile upfront so you reduce misunderstandings or conflict as you implement the plan.

Are your rewards motivating the “right” sales and service behaviors?

Download our free sales toolkit now to learn more.

Share:
Facebook Twitter Google+ Email LinkedIn
Files under:  

Comments are closed.

LSA custom designed a Management Development program that is absolutely “on target” for our technical managers. Their facilitator has done a superb job delivering the material in a way that is fast paced, highly interactive, and fun. She presents practical solutions to the people situations that our managers face every day. I regard LSA as an excellent partner that understands our business needs and a virtual member of our HR department.

Judith Onton
Vice President Human Resources

We recently contacted LSA Global to assist us with a unique training request. We gave LSA a very short deadline and LSA custom designed a training program to meet our exact requirements within the limited time allotted to them. We found their facilitator to be well versed in the subject matter and very credible; the design provided practical and valuable information to our team of managers. I highly recommend LSA Global, particularly in the area of management training.

Julaine K. Souza
Senior Vice President

I am very impressed with the quality of work and talent. LSA did a great job of listening to my needs and providing the exact management training program expertise I needed to get the job done.

Don Pryor
Director, Business Planning & Analysis

Hyperion has a commitment to lifelong learning. LSA helps us provide the right business sales training, management training programs, and leadership development programs at the right time to meet the needs of both individuals and departments. I especially appreciate their ability to listen to my needs and recommend the appropriate facilitators, solutions and content.

Sarah Parks
Senior Project Manager

Hyperion

I consistently look to LSA Global when I need custom programs put together for my client groups. I can always count on LSA to do a thorough needs analysis and to put together spectacular programs that are well received. Their management development and performance management expertise and professionalism make them one of my top-rated learning and development partners.

Stephanie Webb
HR Program Manager

Rambus

We partnered with LSA Global to help us invest in our people in the areas of performance coaching, diversity, and inclusion. They focused on helping us succeed and were very flexible in meeting our specific needs. LSA Global exceeded my expectations from a speed, quality, and value standpoint. I would recommend LSA Global to anyone looking for a true business partner.

Anita Luckinbill
Director, Human Resources

I had been working with LSA for many years with my prior company. Currently, I’m with a company who hadn’t done much basic management skills training. After identifying and presenting a program recently, our managers are excited and talking in the halls about the great experience. LSA saves us time in delivering the right training for our needs.

Phyllis Moracco
HR Director

LSA Global’s consultant brought a fresh perspective to our behavioral based interviewing strategy for two key executive positions we needed to fill, and their consultant helped us develop questions that produced a much deeper understanding of candidates’ capabilities. I am confident that the two new executives joining our organization have the right skills to add significant value. Throughout the process LSA was also very responsive in dealing with short lead time requests.

Because of the unique nature of our business, Excel is a core application in our accounting organization. After three attempts to find an Excel consultant who is capable of helping our finance team integrate advanced applications into our work processes we found LSA and Alex. He was not only a “Real” Excel expert but was masterful in helping us identify where to use Excel applications in our processes to increase our group’s efficiency.

SPO Partners & Co
Kim Silva, CFO

Our company engaged LSA to do a specialized “train the trainer” program, and the consultant’s performance outdid our exceptionally high standards for such a program. Very crucial to the success of this program was the work done upfront to discuss our needs and to interview key members of our organization so that the program specifically met our goals. Our facilitators continue to comment on the success of the program. Thanks also for the follow-up.

Frank Abbott
Chief Financial Officer

LSA provided top notch solutions right when and how we needed them. They exceeded my expectations from a speed, quality, and cost standpoint. I recommend them to anyone looking for a true business partner in the Learning and Development arena. The breadth and depth of their expertise has helped us hit tight deadlines across multiple projects.

Fortune 500 Financial Services Company
Director of Infrastructure & Technology

VNUS Medical has been very pleased with the effective management development programs that LSA Global has delivered for us over the last four years. The programs have been universally facilitated by experienced and best in class instructors. The knowledge gained by our management team has been put into practice very quickly. VNUS is very happy to be working in partnership with LSA because they consistently deliver excellent programs that receive exceptional feedback from our management team.

Cindee Van Vleck
Director Human Resources

We signed up with LSA early on–as their 22nd Member! Since then, our organization’s learning needs have increased and decreased and increased again with the changing times. The beauty of the LSA business model is its flexibility…when we needed to supplement our own internal resources, we used LSA services knowing that we could depend on the outstanding quality of the leadership development and management training programs they provide.

Margie Bunting
HR Manager

SeaTel has found our partnership with LSA Global to be very valuable and beneficial. We turned to LSA to customize a supervisory/leadership solution to meet our needs. LSA delivered a customized top quality solution. I’d recommend LSA Global to any company looking for a best-in-class training and consulting partner.

Kortney Riddle
HR Manager

What a personal and professional pleasure it has been to Partner with LSA. They are truly a strategic partner with Wyse. For more than 5 years, LSA has been engaged in delivering various training and development solutions for Wyse, from custom on-site programs targeting specific core competencies, to working individually with clients to build job skills, and offering invaluable services to me and my team as we continue to build our learning programs. LSA’s representatives do more than sell a product, they offer a full service solution: they understand our business, our strategic initiatives, and the needs of our customers.

Jeff Rangel
Director of HR

Each program is preceded by an assessment of the participants. The course is then designed to fit the specific parameters and needs of the group. The highly interactive delivery is provided by recognized experts in their fields. On the spot coaching is provided during the program and each participant receives individual follow-up after the course. Courses can be delivered in-person or virtually. Given the nature of Cisco’s business and the way we operate, these remote workshops are a must for anyone who joins our company. Their work is eye opening. Great content and fantastic delivery.

Frank J. Kuypers
Business Development Manager

Evaluate your Performance

Toolkits

Toolkits

Download key published insights and tools from industry experts highlighting best practices in the areas of talent, strategy and culture.

More

Health Checks

Health Checks

Want to know how you stack up against leading organizations?  Receive a complimentary benchmarking analysis courtesy of an LSA Expert.

More

Whitepapers

Whitepapers

Get up to speed on timely solutions critical to your business. Published by LSA Experts based upon client feedback and key industry trends.

More

Methodology

Methodologies

First we identify the key metrics you want to improve. Then we assemble a dedicated team of elite experts who have successfully solved similar problems with similar clients.

More

Blogs

Stay up to do date with the latest information on how we help high growth companies align their culture and talent with strategy.

More

Case Studies

Client Case Studies

Real world consulting and training approaches from LSA projects, providing insights on how your company can outperform the competition.

More