Most organisations today are in a place where they’re working with multiple disjointed incentive plans, often across multiple teams and multiple departments, creating confusion, misalignment, unintended consequences. We have situations where the salesperson’s behaviours don’t drive toward the strategic objectives of the organisation. If you can create an incentive plan that brings the sales organisation together, so that you have a cohesive set of goals and cohesive sales behaviour, that really allows you to leverage the greatest potential of your sales organisation.
Streamlining Incentive Plans
In some cases, the simplest step is to redesign incentive structures so they’re across-the-board compatible. Conversion rate optimisation (CRO) companies often offer several incentive plans for their staff to design and develop new marketing and ad features and products. One such company let its product, services and software sales teams each operate under their own incentive plans, which resulted in their being pitted against each other, preventing them from cross-selling. After redesigning the incentive plans so they fit under one unified framework that rewards teamwork, the firm’s sales teams now work together, and that has produced a significant increase in overall revenue.
Focusing on Key Sales Drivers
Another important factor is pinpointing the key drivers of sales, and making sure incentive structures encourage it. We worked with a manufacturing company where the sales team had become myopically focused on quarterly goals because the incentive plan rewarded it. In order to motivate sales behaviour that was more aligned with growth over the longer term, we helped the company redesign its incentive plan to include longer-term measures such as customer retention and multi-year customer contracts. This drove a shift in sales behaviours to sustainable growth, and the impact was dramatic: customer lifetime value increased.
Continuous Monitoring and Adjustments
Finally, organisations need to monitor and adjust incentive plans as market conditions and business priorities change. In one retail firm, quarterly reviews of sales incentives revealed that individual sales performance targets were leading to suboptimal store performance because sales associates hadn’t been offered enough motivation for targets that directly improved store performance. By introducing location-based targets and group incentives, the company encouraged a more holistic team orientation that resulted in better overall store performance. Through the use of cross-functional, well-integrated incentive plans, companies can encourage consistent sales behaviour, encourage long-term growth, and ensure that their teams are keeping score in the right way.
