Sales Compensation Center Practices to Retain Young High ... - How to Retain Young...How to Retain...

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Sales CompensationHow to Retain Young High Potentials and Motivate Top Performers

September 21st, 2017

Igor Uroic, Principalo) 404.443.5354c) [email protected]

Joshua Meeks, Directoro) 404.443.5359c) [email protected]

mailto:[email protected]

mailto:[email protected]

© 2016 The Alexander Group, Inc.® 2

Agenda for Today’s Meeting

2017 Sales Compensation Trends1

Engaging New Sales Talent2

Designing Engaging Sales Jobs3

Designing Engaging Sales Compensation Plans4

2017 Sales Compensation Trends


Future Of Sales Compensation Program

0.0%

4.1%

9.0%

11.0%

75.9%

Not applicable

Reduction in the use of salescompensation

Robust program expansion

No major changes expected

Normal upgrades and alignments

Future of Sales Compensation(n=145)

75.9%Will continue to make normal

upgrades and alignment changes to

their sales compensation program


Sr. Management Support For The Sales Comp

Program

46.2%Report high support from

senior management for

the existing sales

compensation program


2017 Sales Compensation Program Changes

93.1%Made changes to their

sales compensation

program for the 2017 plan


Sales Compensation Program Plans

0.0%

1.4%

4.3%

5.7%

7.8%

8.5%

76.6%

Cancel the sales compensation program

Reduce the number of plan participants

Reduce the extent of at-risk pay

Reduce upside opportunity

Don't have/not applicable

Reduce the number of eligible jobs

No curtailment planned

Program Curtailment(n=141)

7.7%

11.9%

12.6%

12.6%

14.0%

58.0%

Don't have/not applicable

Increase the number of eligible jobs

Increase the extent of at-risk pay

Increase the number of plan participants

Increase upside opportunity

No expansion planned

Program Expansion(n=143)

76.6%Have no plans to curtail

elements of their sales

compensation program

58%Plan no expansion to

their sales compensation

program

*Multiple selections permitted for these questions

Engaging New Sales Talent


An Impending Talent Shortage is Upon Us

Companies will lose 40 percent of their senior

talent by 2017

46% of employers in the United States are

having difficulty filling positions

Sales roles are the #1 hardest-to-fill positions

Sales Jobs are projected to grow 18.8 percent

between 2010 and 2020

– U.S. Department of Labor

– U.S. Bureau of Labor Statistics

– Manpower Group 2016/2017 Talent Shortage Survey

– Korn Ferry Institute, The Talent Forecast (2017)


Group Discussion

Who are these generations?

What is Important to them?

What is unique about today’s work environment?

What is true about all 20 somethings?

How are 20 somethings different today?

Is their anything we should change about work?


What Do Talented Sales People Value

*Source: Glassdoor Sales survey, 2014

72%

65%

48% 46%

38%

Salary &Compensation

Career GrowthOpportunities

Company Culture Relationship w/Manager

Senior Leadership

71% are likely to accept less

money to work at a company with

a great culture

78% are likely to accept less

money for the opportunity to work

at a company selling something

that is particularly compelling

Top 5 Workplace Factors that would cause sales professionals to leave their jobs:


Sales Compensation Trends For Millennials

92.2%Report that they do not

provide special treatment

for millennials

0.0%

0.0%

0.7%

0.7%

0.7%

0.7%

0.7%

0.7%

2.1%

2.1%

2.8%

2.8%

92.2%

Increased guarantees

Greater use of team measures

Other

Not applicable

Easier quotas

Improved signing bonuses

College loan payments

Greater use of guarantees

Enhanced recognition events

Higher base pay/lower incentive

More frequent rewards

Enhanced engagement methods

No special treatment

Millennials(n=141)

`

*Multiple selections permitted for this question


Augment Management Systems with Programs

Individual Needs Supplemental Programs

Education / Learning

Connectivity

Uncertainty

Performance Feedback

Recognition

• Blended Learning (Online & Classroom)

• Gamification

• Collaboration Tools

• Consistent Leadership Communication

• Job shadowing

• Job rotation / Special Projects

• Instant informal feedback

• Virtual Reinforcement

• High Potential / Leadership Development

• President’s Clubs


How do we Enable Organizations

Define sales jobs to

effectively communicate

with sales talent

Job Clarity#1

Develop career paths to

show sales talent what the

future could look like

Create Career Paths#2

Create and align sales

compensation plans with

sales jobs.

Sales Compensation#3

Designing Engaging Sales Jobs


Evolution of Sales Organizations

BASE Growth

HIGH Growth

LOW Growth

Reposition

GrowSelect

Markets

Grow; KeepCustomers

Launch NewProducts

ControlPricing

ReduceCosts

Grow

GrowReallyFast

Phase I

Start-Up

Phase IV

Optimization

Phase II

Volume Growth

Phase III

Re-Evaluation

Re-ThinkProduct &

MarketStrategy

Role Clarity Ultra SpecificAmbiguous Generalized Well-defined

Flexibility MinuteHigh Moderate Limited


Determine the Type of Selling

Alexander Group Sales Strategy Matrix


Identify Key Sales Roles


Job Summary Call on end users in highly strategic accounts

to generate end user demand.

Develop deep industry expertise if assigned a

vertical and / or across product portfolio

Get product on an approved vendor list or

certified / “spec’d in” with accounts.

Lead and manage the persuasion steps of

the sales process including qualifying key

buyers with new products and services and

developing and closing the sale.

Understand end user needs to uncover

additional opportunities within accounts.

Develop strong relationships with key senior

decision makers and influencers within IT,

CIO/CTO, Facilities and Operations to ensure

account intimacy.

Create Descriptive Job Abstracts

Sales Process Complexity

Low Medium High

Sales Process Key Customers

Identify / Qualify

Lead

Qualify &

Develop

Oppty

Negotiate

and

Close

Fulfill

Sales Process

Hunting v Farming

Hunting Farming

Primary Secondary No / Minimal Focus

R P

New

Current

Current New

C: Conversion P: Penetration R: Retention

Sales Strategy

Bu

ye

rs

Products

C

Interacts With:

Focus Products All Branded Products

All SD Products

Product Manager A

Product Manager B

Specialist (All Products)

Field Engineer (All Products)

Lead Gen Rep

Sales Support Associate

Strategic Accts

Named Accts

Low

Growth or

Focus

Growth /

Low

Overlap

Growth /

High

Overlap

Tier 1

Tier 2

Tier 3

Tier 4

Coverage Framework

Key Verticals

Financial Services

Retail & Hosp

Healthcare

Low Growth / Focus

Growth / Low Overlap

Growth / High Overlap

Strategic Account Executive


Develop a Clear Career Path for Sales Roles

Professional/Technology

P1

P2

P3

P4

P5

Jo

b L

evel

Enterprise

Account Manager

Key Account

Manager

Account Manager

Inside Account

Manager

Customer Service

Career Path


Benefits of Career Pathing

How “my job” fits within the overall career

frameworkTransparency

Internal value and externally consistencyInternal/External Equity

Objectivity in determining pay & promotionsIncreased Objectivity

Common platform to improve fairness in pay

and promotionsFairness

Tools to link job contribution to rewardsTools

Designing Engaging Sales Compensation Plans


Financial

Diligence

Effective

Communication

Efficient

Administration

Sensible

Governance

Attract, Retain, and Reward World Class Sales Force

EligibilityPay Mix &

LeverageMeasures

Mechanics

&

Pay Curve

Perf. &

Payout

Periods

Quota

Crediting

&

Policies

Special

Incentives

Aligned to

Strategy and JobMotivational Pay for Performance

Component

Guidelines

Support

Elements

Guiding

Principles

Goal

1 2 3

1 2 3 4

1 3 4 5 6 7 8 9Total

Target

Comp

2

Sales Compensation Design Framework


Pay for Performance Philosophy

Low Performers Median Performers High Performers

75th

50th

25th

TT

C P

erc

en

tile

s


Base

SalaryBase

Salary

Target Total

Cash

Compensation

Base

Salary

GainsharingAdd-On3x

Uncapped

Types of Variable Compensation Plans

Base

Salary

2x

CappedUnit Rate

No RiskRisk

Target PayTarget Rate

Types Of Variable Compensation Plans

25


Pay Mix: Pay At-Risk Decision Guide

Less Aggressive More Aggressive

Target Total

Compensation

0%

100%

70%

30%

50%

50%

90%

10%

Target Incentive

Base

Key Skills Management Sales-Orientated

Strategic Focus Long-Term Short-Term

Degrees from Client Multiple Tiers Client-Facing

Revenue Influence Low High

Sales Objectives Strategic Volume

Type of Selling Order Taking Prospecting

Number of Sales Few Many

Seasonality Heavy None

Job Type Service Sales

X


Measures & Weights Drive Focus For Each

Sales Role

No more than three measures

Minimum of 15% weight

Criteria include: Alignment to strategy and job

Influence their measures (Line of

Sight)

Ability to set quotas/goals

Ability to track

Objective metrics

Weights reflect the job’s focus

and have impact

Measures aligned – vertically

and across teams


Mechanics and Pay Curves Overview

Closing Remarks


Closing Remarks

Augment your business programs to address generational

differences

Define you jobs; Develop career paths & Design compensation

plans that reinforce the right behaviors

There is a fierce battle for Sales Talent

Ensuring that you retain and grow your sales talent will

determine your organizations ability to achieve your business

objectives!


Joshua Meeks

Director

404.443.5359

[email protected]

Igor Uroic

Principal

404.443.5354

[email protected]

Sales Compensation Center Practices to Retain Young High ... - How to Retain Young...How to Retain...

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