Maximizing Sales Impact: Leveraging Role Relationship Hierarchies in Incentive Plans

Role Relationship Hierarchy is a system to establish how different functions of an organization connect to one another (specifically, responsibility, contribution, and control over sales performance). With respect to sales incentive plans (SIPs), this hierarchy makes sure that incentives are distributed fairly and strategically based on the contribution each role makes to revenue generation and growth.

Think of the following scenario: An SDR uncovers a promising lead, which is nurtured and closed by an AE. The AE’s manager is responsible for strategic direction and support and the Sales Director is responsible for aligning the rest of the team with the corporate agenda. This time, lead generation by the SDR, close by the AE and manager are all part of the outcome. With no hierarchy, incentives may tip to the advantage of the AE without considering the SDR and manager.

Organisations should structure these relationships in a healthy SIP to make it clear who drives what part of the sales funnel. This avoids out of balance incentives that would drive employees away or lead to unhealthy competition. – e.g. a large enterprise deal close, for instance, may get 60% of the incentive, SDR 20%, Sales Manager 20%, so on.

Tips for Implementing Role Relationship Hierarchies in SIPs:

Clarify Role Role Functions – Define exactly how each role is going to participate in the sales process including who will get leads, nurture and close them.

Fairly Credit – Measure performance based on data, so throughout the sales cycle every role gets proper recognition and reward.

Incentivize Teamwork – Create overriding incentives to build cooperation between SDRs, AEs and managers in a collaborative approach.

Adjust for Variety – If it is a complex sales, where there are multiple touchpoints, think about levelized incentive according to the progression stage so you’re never losing motivation.

Check and update – Check and update the hierarchy and incentive plan often as sales strategies, markets, and job descriptions change.

Employing a strong role relationship hierarchy provides organizations not only with motivation but also with long-term performance and accountability, so that the right people are being rewarded when they need to be.