Blog

Four Ways to Improve Sales Force Effectiveness

Monday, March 1, 2010  4:10 PM

Bookmark and Share

By: Emilia De Simone, Director, Consulting Services

sales compensation blog In the face of a highly competitive business environment, increasing the effectiveness of your sales force can significantly improve the financial performance of your organization. How do you improve sales force effectiveness? There are many moving parts that ultimately combine to form a sales organization which is driven to succeed. The following is an overview of some of the moving parts:
  1. Clear and Well-Communicated Business Direction and Sales Strategies
    • A sales organization cannot perform effectively without understanding the business objectives and sales strategies of the organization. Many organization do not invest in the time and effort required to communicate company direction and business priorities. This creates confusion among the sales force in that they cannot make the connection between the intent of supporting programs and processes and what the organization requires from their efforts.
  2. A Sales Organization Structure Aligned with the Objectives of the Business
    • To be effective a sales organization must have clearly defined roles and responsibilities that align with the sales activities required from the field. The sales organization structure should take into account market and channel objectives addressed in the sales strategies; product and account management strategies; how business development will be addressed; the technical or sales support required; etc.
  3. A Sales Compensation Plan that Drives the Right Behaviours
    • Sales compensation should support your business model and essentially be aligned with the goals and sales strategies of the organization. An effective sales compensation plan should communicate what you value as an organization and where you want sales people to spend their time and effort. Sales compensation costs can be very costly to an organization; ensuring you have the right sales compensation plan and performance metrics in place that drives the right sales behaviours is essential for financial success.
  4. Defined Sales Processes and Performance Management Practices
    • Once you have identified plan performance measures it is essential to have sales processes in place which enable efficient tracking and monitoring of performance. Further, identifying performance issues early in the performance year enables management to address concerns and coach staff to ensure financial expectations are met.

Labels: , , , , ,

Perspectives on 2010

Thursday, December 31, 2009  11:53 AM

Bookmark and Share
sales compensation blog

While everyone is looking back on 2009 and reminiscing about what has happened in the past year, I thought that it has limited relevance for 2010. From a business perspective, most companies would love to forget 2009 as a time of restructuring, downsizing, re-strategizing or worse yet closing down. Rather, I - being a serial optimist - would like to look forward and present a few proactive thoughts about things that readers can do to constructively influence the performance and results for next year.

Critical to sales success in 2010 will be the need to drive new business growth and account retention. Further, ensuring that salespeople achieve or exceed their targets is also paramount to climbing back to the performance levels that preceded last year's recession. Having said this, sales management is usually not about personally delivering sales, but rather creating the environment that allows salespeople to be successful. How then do we do this for 2010?

First, you have to step back from the minutia, issues, customers etc. and look at the bigger picture. If you could fast forward to December 31, 2010, what would that look like? Creating that vision for yourself and your staff is essential for setting goals and objectives that are realistic and achievable. Further, having the end point sets expectations and allows people to strive and celebrate when they are reached.

Some additional elements of managing for success in 2010 are:

  • Preparation - For the next few weeks/months we will still be somewhat in retrenched mode (although with the New Year will hopefully come new budgets and decisions to spend) with some time available. Use this time to prepare and position your sales force for success. What do you need to do to remove roadblocks to sales execution or provide the tools for salespeople to sell more effectively? This might include information, resources, templates or training. Having a competent sales force has been proven to be the greatest factor in developing sustained competitive advantage.
  • Focus - Salespeople by their nature are positive and well meaning when performing their work. They have to be to deal with the rejection and frustration that often comes with performing in the sales environment. However, if their activities are unfocused and scattered, they will not achieve optimal performance and their level of frustration will escalate. Assist them in creating focus both through better direction on where to spend their time and effort and through sales incentives and compensation that reward them for delivering on the things that you value and want to pay them for delivering.
  • Channel Strategies - Clarity in articulating which sales channels and activities are strategic to delivering the sales vision for 2010 will assist salespeople to behave and execute actions that will increase expected outcomes and elevate close ratios.
  • Planning - Most customers have fewer people who can interact with salespeople on a regular basis, which means, unless it is a large/major account with dedicated resources, the amount of time and influence that your salespeople have with the customer is less than it was in the past. This means that with limited opportunity, their information content, presentation and solution to meet the needs of the customer better be spot on, or you will be in trouble. Therefore, more time on planning, assessment of the customer and their situation as well as quality in the alternatives, selection of the preferred alternative to offer the customer and how and what is presented will determine your success.
  • People - Getting performance and successful execution from its people is the only way for an organization to achieve targets and expectations. What do your people need to be successful in 2010? They need clear direction, performance management, proper incentives and rewards, coaching and mentoring to improve delivery and they need good management.

While all of this might sound like common sense and the "motherhood and apple pie" of management, we rarely allow ourselves to sit down and address these needs in a way that not only aligns with the business but translates into changes in behavior and sales activity. Instead, we prefer to be busy rather than effective.

If you believe in it are taking a few moments to set some resolutions for the 2010 New Year as I am, resolve to be a better manager and leader through thoughtful realization of the things that are within your control.

All the best for a happy and prosperous New Year.

Labels: , , , , ,

Where Will Compensation Levels Land Next Year?

Monday, December 7, 2009  3:21 PM

Bookmark and Share

By: Matt Tyre, Director, Client Services

sales compensation blog

Game planning your incentive compensation program is very difficult in a fluctuating economy; it's hard to predict whether the economy will steadily climb or have some setbacks for 2010. So, how does this impact your program?

You can protect your company, customers and employees by instituting policies and providing increased communication to your sales force. These protective measures are important to all parties involved in the compensation process.

What you can do is introduce legal terms and conditions in the plan document to sales people and ensure that the company reserves the right to adjust targets where necessary. Assessing and establishing targets is very difficult in the most stable sales environment. Therefore, when the market is in a state of flux, it is even easier for the company to miss, and either set targets too high or low. Communicating to your sales people upfront that the company has a right to make changes if required avoids issues with your sales people questioning why the targets are changing in the future. Of course, this could impact a sales person's compensation payout negatively in their eyes. However, as a company you are protecting your sales person from under payouts if the targets are set too high in a flat economy. The protection for the company, in this case, is against large win-falls for sales people if targets are set too low and the economy corrects itself and shows in the positive territory for 2010.

You don't want to de-motivate your sales force with the wrong incentive plan. This will impact how they interact with your customers. These cases can be avoided by simply stating a policy to change the targets to appropriate levels as required. The message can still remain positive in the communication to ensure there is buy-in to the new policy. Leaving the company open to potential issues with your incentive compensation program can be very costly.

Labels: , , , ,

Reward vs Incentive Program - Which is Which?

Monday, November 30, 2009  3:15 PM

Bookmark and Share

By: Matt Tyre, Director, Client Services

sales compensation blog

I had a lengthy discussion today with a company about the differences between a rewards program versus incentive program. I decided to write about it as i thought this might help others who would like to know the difference between these closely-related programs.

The two types programs are listed below with differentiating factors and examples to help paint a more vivid picture.

  1. Rewards Program
    • Is a type of incentive that is typically an annual or longer-term program
    • Usually results in a onetime bonus payout at the end of the year
    • Doesn't greatly impact daily behaviour
    • Example: Bonus on annual company performance
      • Provides a longer term line of sight
  2. Incentive Program
    • Are types of compensation that track, and payout, for short-term performance (bi-weekly, monthly, quarterly)
    • Payouts are recognized upon achievement of the measure
    • Typically bonus and/or commission
    • If designed and communicated efectively, they can greatly impact daily behaviour
    • Example: Monthly commission on margin with a modifier on new accounts
      • Provides a clear, short-term line of sight that can be impacted by daily activities. This incentive tells the sales person to meet margin performance objectives that they can impact and focus on new accounts. When properly communicated, sales people know where to spend their time and effort.

These programs provide two very different sales cultures within an organization. Your industry vertical, regional location and/or your existing sales culture, would also help define which program is better suited to your company.

Labels: , , , , ,

Are Your Sales People Working in a Black Box?

Tuesday, November 24, 2009  11:25 AM

Bookmark and Share

By: Matt Tyre, Director, Client Services

sales compensation blog

Recently I was asked by a customer 'how many of my sales people should hit target?' The easy - although unrealistic - answer to this question would be 100%. However, many factors contribute top the success of a sales team, thus making an exact number harder to predict.

An organization could ultimately be setting targets too high and that could be the culture in their industry or company. When you have this culture, companies tend to set stretch targets and the mindset of sales people is that they desperately need to push to meet individual targets for their team to hit their numbers. Sales people in this environment typically do not have visibility or full transparency to performance targets and actual performance. The sales people are pushing to meet whatever goal is communicated by management and these figures move around. This is what we call working in a black box. In this scenario you will almost certainly see underachievers. Communication from sales management is that they will compare peer-to-peer performance versus defined metrics not against their personal targets.

In other cultures, if the plan is designed with reasonable goals that don't fluctuate up and down, with traceable results, then 60%-70% of your sales people should be on target with the plan.

Not all employees and new hires will have the competencies to be successful, and consideration should be made to focus efforts on the hiring process. Companies that invest in this process, and scrutinize recruits beforehand with online competency tests are increase their chances for having a successful sales team by weaning out those candidates that may be a wrong fit within the organization.

Training your sales people to improve sales performance and opportunity is another element that will contribute to better overall performance. The constant reminder of a winning process can never be a waste of time. Frequent meetings to talk about wins and how successful sales people achieved wins can help other sales people follow in this process.

Lastly, mentoring top sales people can help contribute to the overall team success. Deploying the top performers to work with employees in the bottom 30%-40% will only help the entire sales team. The saying 'You're only as strong as your weakest link' may be cliche, but definitely applies in the context of the success of a sales organization.

If your sales people are not achieving results in the 60%-70% range, then they should be put on a development plan to improve their performance, or ultimately be replaced in the organization. Often, the mindset of the sales person that is underachieving is that they would want to move on as well if there is no mutual reward for the individual and the company.

Achieving this mark is important for an organization. If the sales force is motivated, successful and meeting objectives than you will see a positive work environment. If this is not the case, you will find the reverse effect.

Labels: , , ,

What Affects Sales Motivation?

Tuesday, November 10, 2009  3:53 PM

Bookmark and Share

By: Matt Tyre, Director, Client Services

sales compensation blogRecently I participated in a study conducted by a business school that looked at influencing factors that motivate sales people. Motivation factors could be positive or negative as viewed by sales people. For example a Pay & Rewards can be motivating if performed effectively by companies or the opposite can occur. Sales people may be completely demotivated based on a poor program that doesn't provide expected pay & rewards for performance and results. The choices by organizations impacts the total rewards mix and the success of the company and sales force.

So what are motivating factors affecting sales people (in order)?

  1. Pay & Rewards
  2. Achievement
  3. Personal Life
  4. Relations with Customers
  5. Relations with Colleagues
  6. Work itself
  7. Job Security
  8. Status

What were standouts from the list that had more positive influences in motivation was Personal Life and Relations with Customers. These two factors clearly showed that sales people are motivated and find little issue in these areas.

Personal achievement does motivate sales people, but almost equally will demotivate if underachievement is a trend within your company.

What factors are de-motivating the sale force?

  1. Recognition
  2. Growth Opportunities
  3. Company Policy & Admin
  4. Career Progression
  5. Responsibility
  6. Working Conditions
  7. Relations with Supervisor
  8. Supervision

Not providing enough recognition for individual or team achievement can make for a negative work environment. Recognizing your sales people is one of the largest motivating factors and can influence the desired behaviours that a company seeks from their employees.

Company Policy & Administration ranked in the top three demotivating factors, however the majority of the feedback was negative, making this a bigger issue. Many companies have cut back resources and stretch resources thin over the past decade. One of the impacts is sales people responsible for their own administrative tasks and proposal which tie up much of their time and keep them from performing selling activities. As organizations have put this pressure on their sales people, they need to consider the competencies required for these administrative tasks, as well as the impacts of sales people not actively selling to perform administrative tasks.

Survey Author: Beaumont, Paul, Anthony - DipS, MCIM, Chartered Marketer (Mature Student, MA Sales Management, Portsmouth University)

Survey participants: 632

Labels: , , , ,

Will Money Buy Happiness for Sales People?

Tuesday, November 3, 2009  9:20 AM

Bookmark and Share

By: Matt Tyre, Director, Client Services

sales compensation blogIn the mind of great sales people you may think that compensation is the primary driver in attracting, motivating and retaining their talent. I was in discussions with a Sales Executive recently and we were talking about what would attract a sales person at the senior management level to make a move from their current position. To be honest, I was not shocked to hear that monetary compensation was not their only motivator. Looking at a balanced total reward mix (compensation, benefits, recognition, work life balance, and career development opportunities) was more important to experienced sales people. Younger, less experienced sales people will typically look at money as the main attraction. Senior sales people seem to be more selective on what will attract them to make a move or stay with their current organization.

Here are some key motivators that came up in my conversation:

  1. Work flexibility - working from home and flex hours
  2. Less travel
  3. Reduced distance from home to the office
  4. Other monetary benefits - stock options, deferred profit sharing programs
  5. Desire to have a leadership role
  6. Willing to take slightly less in monetary compensation if some of the above concessions can be made.

You can see that work life and career-advancement opportunities seem to play a prevalent role in the discussions, more so than money. Sure, if you're offered an obscene amount of money most sales people will strongly consider the option, however it just goes to show that money doesn't by happiness and that to get great sales people to work for your company you must look at the total reward mix to attract them.

If you are in a senior management role, what would motivate you to make a move?

Labels: , , , , , , ,

Who Really Owns Sales Compensation? Poll Results

Tuesday, October 27, 2009  11:51 AM

Bookmark and Share

By: Adam Johnston, Marketing Coordinator, Sales Resource Group

We recently posted a blog posing the question, "Who Really Owns Sales Compensation?" We followed this article with an informal poll and the results were slightly predictable, however still very interesting. Of 35 responses, 62% indicated that Sales is responsible for the compensation program. Also, more respondents noted that Human Resources(15%) should own the sales comp program than Finance(6%).

What I found most interesting, however, was the number of respondents that believed there should be a shared responsibility for the sales compensation program. In our poll, 18% of those who participated believe there should be a shared responsibility between all functional departments (Sales, HR, Finance and IT).

While not completely scientific, it was still interesting to see the overwhelming belief that Sales should hold responsibility for the compensation program. I think the strong support for shared responsibility, in our poll, hints at the belief that while Sales should be held accountable for the compensation program, each department should have a hand in it's development and administration.

Labels: , , ,

What is a Sales Compensation Framework?

Thursday, October 15, 2009  10:08 AM

Bookmark and Share

sales compensation blogSales compensation programs need to have consistency across an organization as a whole. Typically a framework is developed to create the alignment across multiple business units and within the job functions. With this approach you provide the individuality that each business unit needs, but holistically the company has a similar structure in their comp plans.

There are two levels in the framework process. First is looking at the company as a whole and then looking at each business unit's:

The second level is taking this information and looking at the key elements in each business unit. Some elements included in Sales Compensation Frameworks:

  • Sales Roles
  • Pay Mix
  • Metrics for Measurement
  • Performance and Payout Frequency
  • Individual/Team Measurement

When designing a framework you can take a basic excel spreadsheet and build a table. The table should be presented in a way that you can compare the jobs and the differences in mix, individual or team metrics, and the performance and payout frequency. When you build your framework you should see some consistency in some of the measure/metrics, except the variability by role and level of responsibility. An example would be to have a sales rep focused on individual gross margin sales and a manager being rewarded on the sum of all sales for their sales reps and for their region in gross margin sales. The consistency in the design will unfold and should ultimately tie back to the business goals and objectives for the company and their business unit.

Labels: , , , , , ,

Who REALLY owns sales compensation? You Decide!

Wednesday, September 30, 2009  10:38 AM

Bookmark and Share

We posted a blog recently trying to justify the role of each department in the sales compensation design and communication process. We received several observations and mixed opinions; now we would like to hear from YOU! Who do you think owns the sales compensation responsibilities?

This poll requires the latest version of Adobe Flash Player 10. If you cannot view this poll please download the latest version of here.

Labels: , , , , , ,

Who Really Owns Sales Compensation?

Thursday, September 24, 2009  2:50 PM

Bookmark and Share

By: Matt Tyre, Director, Client Services

Tuesday was an exciting, and illuminating, day of discussion at the Toronto Board of Trade. Sales Resource Group hosted a sales compensation planning session for the upcoming year and some interesting discussion came out in the seminar-closing round table. Many questions were asked about different industry issues and trends; sales compensation bloghowever one question seemed to be the hot-button topic of the day, who owns sales compensation; Sales or HR? With a varying group of professionals from industries such as office supplies, retail, telecom and financial services, the response was one that didn't settle the debate concretely. The mix from the group was exactly 50-50. So it seems that sales compensation is an entity that's ownership hovers between Sales and Human Resources. Some groups were transitioning the ownership from Sales/Sales Op's to HR, which doesn't set any trends, but may be an indication of where some organizations believe the responsibility belongs.

The relationship between both HR and Sales is critical in the success of the incentive compensation program and executing sales strategies. As companies invest millions in incentive payouts it is important that the roles and accountabilities are defined. The key is to ensure that all departments provide value in the process and have responsibilities for the outcomes. Ownership lies with each group fulfilling their obligation to the process and knowing what they are accountable for.

Here is a list of key responsibilities by department:

HR

  • Compensation Plan Assessment
  • Compensation Plan Recommendations
  • Compensation Plan Framework Development
  • Conceptual Plan Design
  • Compensation Plan Modeling
  • Final Plan Development
  • Plan Document Communication
  • Plan Communication to the Field Sales people (in collaboration with Sales) – Supporting Role

Sales

  • Develop Sales Strategies and Communicate to HR
  • Review and Approve Recommendations - Ensure Alignment with Strategies
  • Review and Approve Framework - Ensure Alignment with Strategies
  • Review and Approve Conception Plan Design - Ensure Alignment with Strategies
  • Provide Targets to HR for Document Communication
  • Approve Final Plans
  • Plan Communication to the Field Sales people (in collaboration with HR) – Lead Role
  • Review Performance vs. Targets

Finance/IT

  • Access to Data
  • Confirm Available Metrics for Plan Designs
  • Costing of Incentive Program (Finance)

HR/Sales Op's/Finance/IT (Depending on the organization)

  • Calculate Commission and Bonuses

Obviously, responsibilities vary by organization. The list provides guidance to what departments own which elements in the process. As you can see, mo individual department owns the design process; instead it should be a collaborative effort to ensure the strategy of the business is met. Where it becomes unclear in most organizations is who owns the calculation process. Who manages calculations, adjustments and approval of the calculated incentives? We have seen this vary from all departments (HR, Sales, Finance, and IT) but whoever owns it, is accountable for providing timely and accurate calculations to the sales force. This critical piece may require involvement from all the groups to complete the fulfillment of payouts, which is the most important aspect to the sales person. If your sales people are delivering on the desired behaviour of the plan and the payout process is managed effectively you will have a positive sales environment for your company.

Labels: , , , ,

Knowing Your Role

Thursday, September 17, 2009  9:10 AM

Bookmark and Share

By: Matt Tyre, Director, Client Services

sales compensation blog

In the world of sales and incentive compensation we design plans for roles and positions. I have heard over the years different titles used to describe functions in a role, with much inconsistency. In HR, the Compensation Analysts are responsible for job matching and finding market data to determine what level the company is paying it's sales people relative to the market. They look at their company role/job title as a starting point to try and match it to a job title in a survey and then they can narrow down the search by reviewing the descriptions. This is usually a daunting task because few companies have consistency in the titles and descriptions of their roles to that of their competitors. The Comp Analyst's objective is to analyze the companies roles and match them up to a position in an industry survey. The problem is that there is no standard that every company follows. Most companies don't use role titles correctly, simply because they don't know any better. Let me give you an example to explain the confusion, if you are given the title of "Sales Rep" and the company tasks you with managing recurring accounts, does that description fit the job title? The answer is, no it doesn't; ladies and gentlemen, you are an Account Manager.

I would like to provide you with three role/position titles to possibly help you get closer to standardizing your compensation structure.

  1. Sales Representative - Typically a "Hunter" role, looks for new accounts, territory oriented, may have some accounts that they manage, but have focus on delivering a stream of orders
  2. Account Manager - Typically more of a "Farmer" type role, retention focused and nurtures the relationship with their accounts to grow the installed base.
  3. Account Executive - Generally handles larger accounts and bigger opportunities in the market place (with bigger target expectations as well). Often has a combination of both account management and new accounts, with a greater focus on new business development.

Sales and HR need to be in sync to make sure there naming conventions have common terminology when compared to the market standard.

Labels: , , ,

Why is ICM Viewed as a Burden and Not a Blessing?

Monday, September 14, 2009  9:36 AM

Bookmark and Share

By: Matt Tyre, Director, Client Services

sales compensation blog

Like a kid on Christmas morning, this is the time of year when everyone is getting really excited about starting the planning process for their new incentive compensation plans that they will develop for next year (You can almost hear the sarcasm in my keystrokes, no?). All joking aside, the reality is that incentive compensation is an effective way to motivate sales people and reward for performance. The burden of this exercise is the time and effort invested by many people in a company to get to the end result. The burden of endless meetings, market data analysis, costing, modeling, plan design, target setting, approval process, and final communication to the field, is a daunting task for everyone. The burden weighs on Sales, HR, Finance, and in some organizations IT. The issue is that most sales management teams don't embrace this challenge and associate the impacts that the incentive program has on driving the business. The compensation plan supports the sales strategies of the business and acts as a conduit to enable the sales force to reach milestones that are important to the company. The blessing is seeing sales people focus on the reward that is driven from their commission or bonus plan and in turn drive the business in the right direction.

This may come across as stereotypical of sales managers, but some seem to have other priorities before dealing with the annual incentive compensation responsibilities, and this task shouldn't be ignored or neglected. I know Sales Management needs to focus on many other elements within their job function but the attention to this one detail is a testament to your management ability. The impacts of poorly executed incentive compensation will impact your bottom line, and to put it bluntly, I am sure that is the forefront of your business objective.

Below is a list of exercises that I feel are generally the foci of Sales Managers:

  1. Target/Quota setting
  2. Recruiting and Training
  3. Evaluation
  4. Budgeting
  5. Expenses
  6. New Business Development
  7. Account Management
  8. Forecasting/Funnel Management
  9. Recognition Programs
  10. Compensation Plan

I am sure I missed a few elements, but the point is that the priority for compensation won't be on the top of the list and that is to be expected. BUT, you might be surprised with the impacts on the business if this one sales function is executed properly. Embrace the burden and see how your sales will be positively impacted.

Tomorrow's Blog: The 7-Year Itch Between HR and Sales

Labels: , , ,

The Trickle Effect of Poor Sales Incentive Compensation

Wednesday, September 9, 2009  10:51 AM

Bookmark and Share

By: Matt Tyre, Director, Client Services

Every year Sales and HR organizations invest time to develop incentive programs for their sales people with positive intentions. Here are three situations that can arise and result in negative impacts on the program.

  1. Rolling out compensation plans late
  2. Communicating plans poorly
  3. Complicated or incorrect plan design

Rolling out plans late in the year
What are the most common reason that plans are rolled-out late? Well, as sales compensation administrators might tell you, it is often the decision making process that stagnates the green light for plan approval. The approval process in some organizations has to go through multiple departments and levels of management, which slows down the communication of the plan to the sales force. Issues could also stem from target setting, to the lack of urgency. Some sales organizations don't connect the level of importance of the sales compensation program as the direct link to supporting the sales strategies. The impacts of a plan being rolled out one-month late, for example, is that your sales people lacked reinforcing direction for one-twelfth of the year that should drive the behaviors the company is expecting. One-month's lack of focus equals trickle effect number one.

Poor communication is common
The communication of a plan is as important and the design itself. It needs to be clear, understood and positively reinforced so the impacts produce the desired results. Consider this, for example, a new plan is rolled out and the sales people have not bought into the plan. It is beginning to create negative behavior within the organization. This behaviour runs juxtaposed to the original intent of the incentive program and creates an inefficient working environment. It is hard to measure the impacts of a mass exodus of sales people and customers hearing negative condemnation of the company. However, such could be the result of trickle effect number two.

Complicated or incorrect design leads to a myriad of issues.
Finally, a simple plan that can be understood easily by a sales person will deliver desired results. A complicated plan that confuses a sales person will create no behavioral change and in turn is a waste of resources - both time and financial - to the organization. sales compensation blogIf you want your sales people to focus on sales of widgets, pay them for widgets sales. If they can impact margin, incent them to focus on margin. Metrics that are key foci for sales management, that you want to have your sales people focus on, must be within their ability to impact. For example, many organization want to focus on margin, but if the sales person in unable to impact the result, it shouldn't be in their plan. Build plans that are within the sales persons' control, where they have the ability to influence the results and recognize a reward. Poor results stem from a lack of focus, and lack of focus stems from complicated incentive plans. This illustrates trickle effect number three.

The trickle effect theory outlines that each time a negative-reinforcing element in your sales incentive compensation plan occurs, it happens at a a cost to the business. The goal is to avoid these mistakes to ensure an effective incentive program and achieve desired results. When incentive compensation is managed effectively and is supporting the strategies of the company, positive results ensue.

Tomorrow's blog: Incentive sales compensation, burden or blessing?

Labels: , , , , , ,

Top 5 Words to Have in your Sales Compensation Vocabulary

Tuesday, September 8, 2009  9:28 AM

Bookmark and Share

By: Matt Tyre, Director, Client Services

Here are 5 HR/Sales incentive compensation terms to communicate more effectively with your sales people in your plan documents.

  1. Target Total Compensation (TTC) - at 100% performance what a sales person can earn.
  2. Interpolated - paying in between performance tiers.
  3. Strategic Initiative/MBO - qualitative or quantitative performance measure.
  4. Threshold - meeting a minimum expectation of performance to earn an incentive.
  5. Holdback - holding back a portion or all of an incentive until performance milestone is achieved.

Labels: , , , , ,

Half a World Away... Same Issues

Friday, August 14, 2009  10:31 AM

Bookmark and Share
By: David Johnston, President, Sales Resource Group

I am writing this blog from my hotel room in Kuala Lumpur, Malaysia. Having taught in Asia several times, I am still amazed that in vastly difference cultures and organizational philosophies, that when it comes to sales, the problems that companies face are the same as those in North America. In particular, the struggles to set targets that are fair and reasonable so that salespeople are focused and motivated. Further, there is a lack of good performance management systems and the ability to track and hold salespeople accountable. Finally, the capability to assess the quality, performance and accountability of their Sales Managers underlines their concern about economic recovery and positioning themselves for future sales success.

Performance management and the systems to track and accurately, consistently measure actual versus targets in a timely and simple fashion is the holy grail of business today. Particularly in sales, during the current global recession, it is the optimum time to create and implement the capability to position the organization to take advantage of any pending upturn in the economy. However, the commitment to finance and resource such projects must become a high enough priority to make it happen. Research has shown that salespeople well managed, through effective performance management programs perform better and deliver improved revenue and profit performance... anywhere in the world. That is how I see it... how about you?

Labels: , , , ,

After 20 Years

Tuesday, June 23, 2009  9:52 AM

Bookmark and Share
By: David Johnston, President, Sales Resource Group Inc.

May 29th, 2009 marked the 20th anniversary of my entrepreneurial leap into my own business. There have certainly been ups and downs caused by economic factors, some questionable decisions and the need to meet the financial obligations that come with running a company. When I sat and reflected on the past two decades of work, there were several things that I realized about both myself and the experiences that I have had. These are:

The principle of enjoying what you do is paramount to performance and perseverance. I truly love what I do! It challenges me. It provides me with rewards and recognition that make me feel good about the work and the results that I achieve. Money and prestige while nice are secondary to looking forward to what you do each day.

Working with people that you enjoy and have a bond with is essential. I work with people who are intelligent, committed, loyal and trustworthy. It does not get much better than that. We care about each other, look out for each other and while sometimes we fight about issues, there is no question that we have each other's back... especially in times of need. This applies to clients as well. The personal and deep relationships that we have with our clients makes each day something to look forward to. When their issues are tough and require collaborative effort, we both rise to the occasion.

The need for an active, inquisitive mind and a strong work ethic differentiates those that think about what needs to get done and those that get things done! Experience and information (formatted... not data) are now the tools that enable people to solve problems quicker. It is much harder now though to sort through the plethora of information that is passed to us in "real-time, on-demand" to make immediate decisions. Long hours and perseverance are a requirement now for success.

While I am sure that I won't be sticking around for another 20 year anniversary, I do look forward to the next several years as we endevour to be a resource to clients who need help with their sales compensation.

Labels: , , ,

First Blog Post/Website Launch

Wednesday, April 15, 2009  9:53 AM

Bookmark and Share

Welcome to our new blog and website,

This will be an ongoing, informative blog concerning a wide-range of topics. Sales Resource Group executives, sales people and developers will contribute to this blog periodically to provide prospective on sales, compensation or technical issues facing numerous industries.

Also, the team at Sales Resource Group Inc. is excited to announce the launch of their new website. We have significantly upgraded many sections of the website, as well as added additional sections to provided clients and prospective customers with a wealth of knowledge from our sales compensation experts.

These upgrades are all part of our attempt to be a full-service solution and industry leader in the sales and incentive compensation industry. Please take a moment and navigate through our new site to experience all that Sales Resource Group has to offer.

Thanks,

The SRG team

Labels: , ,