{"id":11402,"date":"2015-02-23T14:06:44","date_gmt":"2015-02-23T19:06:44","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=11402"},"modified":"2015-02-24T13:43:23","modified_gmt":"2015-02-24T18:43:23","slug":"comp-and-talent-it-isnt-an-either-or-its-both","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/sales-management\/2015\/02\/comp-and-talent-it-isnt-an-either-or-its-both\/","title":{"rendered":"Comp and Talent \u2013 It Isn\u2019t an Either or, It\u2019s both!"},"content":{"rendered":"

\"salesIt\u2019s not uncommon today to get into deep conversations about sales compensation. Typically, it\u2019s a business owner looking to refocus and energize their sales team and to drive the best possible behavior and thus sales results.\u00a0 Compensation is a serious topic for serious reasons.\u00a0 Mess with it too often and you\u2019ll clear the house, don\u2019t mess with it enough and you\u2019re probably giving away too much money and your growth numbers (net new accounts) are probably suffering.<\/p>\n

There are so many conversations going on about compensation.\u00a0 \u201cAm I paying out too much?\u201d \u201cAm I paying enough to attract sales talent?\u201d The emotions, rules and even laws around compensation make this a very challenging topic to deal with.<\/p>\n

I hear a lot of \u201cIf it ain\u2019t broke don\u2019t fix it!\u201d but what usually comes along with that statement is a business that\u2019s behind the times, including their market strategy and yes, their sales comp program. The cold hard facts are, our industry is changing and in order to remain a leader in your marketplace you have to change with it.\u00a0\u00a0 So drive a sales compensation that empowers your future.<\/p>\n

Let\u2019s face it; if you don\u2019t know what you want (your key business objectives) and you\u2019re not sure what your market wants (market strategy) then it really doesn\u2019t matter what sales comp plan you implement. \u00a0But when you get it right and it\u2019s aligning performance and activity to your destination, it becomes a propellant that drives your company.<\/p>\n

Many owners express fear when I recommend a change in their sales comp plan, mostly because it\u2019s so hard to get things operating smoothly. One business owner told me that there are very few smooth moments within a month that they just stopped expecting them.\u00a0 Some report, \u201cwe\u2019ve tried to change it in the past, but we had a mutiny on our hands!\u201d Every situation is different; however, if they don\u2019t know your business objectives and market strategy, they\u2019ll have no reason to understand the comp change.<\/p>\n

Our industry is one of the most dynamic industries in the world. Think of it, we help millions of businesses operate everyday with the technology we sell.\u00a0 What you sold even five years ago has changed drastically, so changing compensation is just part of it.\u00a0 You\u2019re not the cause of the change; you\u2019re just trying to remain relevant and competitive.<\/p>\n

I\u2019ve heard, \u201cWe\u2019re not selling a lot of MPS!\u201d or \u201cWe get in a deal so far and then we bail and it becomes a hardware sale!\u201d\u00a0 Both of these could be caused by a sales comp misalignment.\u00a0 Your sales compensation isn\u2019t just a way to pay your sales team, it\u2019s part of your marketing execution plan; it ties action and direction to your key business objectives and market strategy.\u00a0 It can get especially challenging when a hardware company tries to move into managed services or include software sales.\u00a0 Without allowing your comp plan to assist you in the change, it\u2019s probable you won\u2019t make the transition successfully.\u00a0 Sales compensation should be as standardized as possible, all for one and one for all.<\/p>\n

I have found within a single company as many as 8 different comp plans at work at the same time.\u00a0 Talk about a nightmare. This is typically caused by the lack of foundational planning on behalf of the business owner or leadership.\u00a0 There is nothing wrong with different comp plans for different deliverables, but different comp plans for reps all selling the exact same deliverable?\u00a0 Unmanageable! \u00a0If you\u2019re paying more money or higher percentages to some, this will be discovered and drive dissention in the ranks and may result in undesired consequences.<\/p>\n

This can happen in the recruiting process, when an inbound candidate negotiates their way through your comp to make it more favorable.\u00a0 Obviously if you scored the right person it may be worth the headache; however, I\u2019ve seen this a thousand times where a negotiation to pay higher commission creates a monster.\u00a0 A rep who can live on your base and a few sales is not what you want to create. Creating high activity and momentum drives the highest ROI for your company. Slow creates slower and when your \u201chigher talented\u201d reps are not at the front of the pack raising the bar, where do you think the others will be?<\/p>\n

Sales compensation isn\u2019t a toy to play with, it\u2019s a tool that helps guide your sales organization to the direction and behavior that best serves your company\u2019s future.<\/p>\n

As powerful as a great comp plan can be, it seems that there are some folks that you simply cannot please.\u00a0 Not in every company, but in many, there seems to be confusion sometimes on who works for whom.\u00a0 Letting things get to this point is a mistake.\u00a0 Often I find that the sales team has control of the company and the pace of sales.\u00a0 They live in the lease renewals and the company is just a vehicle for the sales team to drive their income.\u00a0 Trying to change the comp in this environment is amazingly difficult and you\u2019ll probably lose those who have only been using you as a cash cow.<\/p>\n

The good news is, if they were living in your renewals you certainly can renew your own leases (most of them anyway).<\/p>\n

This leads us to the talent side of our conversation.\u00a0 Certainly you\u2019ve heard the old saying, \u201cWhat came first, the chicken or the egg?\u201d\u00a0 This applies directly to our hiring success.\u00a0 Designing a sales team model that will get the job done is so very important.\u00a0 Is it the comp plan that attracts the talent or is it talent that requires a great comp plan? And it\u2019s not about hiring a lot of people; it\u2019s about putting together a sales team strategy and attracting the right talent with the right comp plan.<\/p>\n

With any candidate you\u2019re about to hire, it is a great point of conversation to share AT THAT POINT,\u00a0 \u201cWe review our comp plans every year and modify them AS NEEDED to accommodate the new products, services or market strategies.\u201d\u00a0 I would go as far as dropping that into your hiring or employee handbook and provide a place for them to initial that they understand.<\/p>\n

Trying to motivate sales reps that will never adapt is like putting a new motor on a sunken boat\u2014it\u2019s not going anywhere.\u00a0 You have to build a comp that will attract the right talent and the right talent should understand how the compensation can help them make a lot of money.\u00a0 The right candidate is probably looking for higher income opportunities over a strong base.\u00a0 But remember your thoughts of a strong base are always less than theirs it seems.<\/p>\n

Most importantly your comp plan must be REAL.\u00a0 I see people throw out numbers that came from Mars and then an unknowing candidate jumps into failure the day he joins your company.\u00a0 There are a lot of practices out there like hiring an experienced sales professional or hiring inexperienced talent and training them.\u00a0 There can be problems with both sides of those practices.\u00a0 If you hire inexperienced talent and decide to train and nurture them, you have to have a training and nurturing program. Do you have one?\u00a0 If you hire the experienced sales professional, you realize they do have some baggage, good and bad and hopefully you hired someone with a proven SUCCESSFUL track record that you validated.\u00a0 Someone who can sell the C-suite solutions our industry is requiring.<\/p>\n

What you should always do with your existing team and\/or new hire candidate is show them a 3 year view of their comp and quota requirements so they understand your long term expectations for year two and three.\u00a0 One of the most negative comments I hear in our sales rep surveys is, \u201cMy employer keeps raising my number every year.\u201d\u00a0 A great market strategy is always going to include growth calculations; however, many business owners look at yearly budgets and forget to share the long-term requirements with their sales team.<\/p>\n

As I said earlier, sales compensation is a tool, it has to demonstrate a path for successful income or you\u2019ll never attract the higher talent.\u00a0 It should show the same new business mix requirements that your company needs.\u00a0 Share more commission for growth and less for renewals and both of those are impacted positively or negatively based on quota attainment. \u00a0The salary you provide should assure you that you have control of the daily activity and expectations of your sales team.\u00a0 You should be able to request and expect the normal and necessary sales activity that every company would require to grow their sales funnel.<\/p>\n

They say that a great sales rep is one in ten thousand!\u00a0 They\u2019re out there, and your comp plan, if it\u2019s right, can attract them.\u00a0 This is important!\u00a0 They\u2019re probably employed and you\u2019ll need a technical sales recruiter to find them!<\/p>\n

If you think that your salaries and commissions won\u2019t compete, here\u2019s a process for affording the talent you need.\u00a0\u00a0 Let the 3 or 4 underperformers you employ go and use their funds to design and attract the right talent.\u00a0\u00a0 It will only have a positive impact on your company immediately.\u00a0 Let the recruiter review and share their thoughts about the quality of your comp plan. They get to see hundreds of benefit packages every month and work in your marketplace. So help them help you!\u00a0\u00a0 Make any reasonable adjustments they suggest that align with your plan.<\/p>\n

So what is the right sales compensation?\u00a0 Let\u2019s just look at the marketplace today.\u00a0 With managed services being a C-Suite deliverable (mostly) you\u2019ll have to afford a sales rep with the talent to perform at that level.\u00a0 That type of talent is going to want to make six figures plus and will want to build some type of residual commission.\u00a0 With services, you really can\u2019t base their comp on equipment profit so you have to create a comp plan that\u2019s based on the value or profitability of your contract.\u00a0 Just like equipment, services generate profit; all you have to do is design a comp plan around the profit of longer-term contracts and reward your sales team for bringing them in. I certainly have examples I could share.<\/p>\n

A mediocre comp plan plus a mediocre sales team delivers mediocre results, plain and simple.\u00a0 You don\u2019t have to ride in a boat that\u2019s sinking.\u00a0 Patch the holes, put a new motor on it and grab the rudder and point it where you want it to go!<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s not uncommon today to get into deep conversations about sales compensation. Typically, it\u2019s a business owner looking to refocus and energize their sales team and to drive the best possible behavior and thus sales results.\u00a0 Compensation is a serious topic for serious reasons.\u00a0 Mess with it too often and you\u2019ll clear the house, don\u2019t mess with it enough and you\u2019re probably giving away too much money and your growth numbers (net new accounts) are probably suffering. There are so many conversations going on about compensation.\u00a0 \u201cAm I paying out too much?\u201d \u201cAm I paying enough to attract sales talent?\u201d The emotions, rules and even laws around compensation make this a very challenging topic to deal with. I hear a lot of \u201cIf it ain\u2019t broke don\u2019t fix it!\u201d but what usually comes along with that statement is a business that\u2019s behind the times, including their market strategy and yes, their sales comp program. The cold hard facts are, our industry is changing and in order to remain a leader in your marketplace you have to change with it.\u00a0\u00a0 So drive a sales compensation that empowers your future. Let\u2019s face it; if you don\u2019t know what you want (your key business objectives) and you\u2019re not sure what your market wants (market strategy) then it really doesn\u2019t matter what sales comp plan you implement. \u00a0But when you get it right and it\u2019s aligning performance and activity to your destination, it becomes a propellant that drives your company. Many owners express fear when I recommend a change in their sales comp plan, mostly because it\u2019s so hard to get things operating smoothly. One business owner told me that there are very few smooth moments within a month that they just stopped expecting them.\u00a0 Some report, \u201cwe\u2019ve tried to change it in the past, but we had a mutiny on our hands!\u201d Every situation is different; however, if they don\u2019t know your business objectives and market strategy, they\u2019ll have no reason to understand the comp change. Our industry is one of the most dynamic industries in the world. Think of it, we help millions of businesses operate everyday with the technology we sell.\u00a0 What you sold even five years ago has changed drastically, so changing compensation is just part of it.\u00a0 You\u2019re not the cause of the change; you\u2019re just trying to remain relevant and competitive. I\u2019ve heard, \u201cWe\u2019re not selling a lot of MPS!\u201d or \u201cWe get in a deal so far and then we bail and it becomes a hardware sale!\u201d\u00a0 Both of these could be caused by a sales comp misalignment.\u00a0 Your sales compensation isn\u2019t just a way to pay your sales team, it\u2019s part of your marketing execution plan; it ties action and direction to your key business objectives and market strategy.\u00a0 It can get especially challenging when a hardware company tries to move into managed services or include software sales.\u00a0 Without allowing your comp plan to assist you in the change, it\u2019s probable you won\u2019t make the transition successfully.\u00a0 Sales compensation should be as standardized as possible, all for one and one for all. I have found within a single company as many as 8 different comp plans at work at the same time.\u00a0 Talk about a nightmare. This is typically caused by the lack of foundational planning on behalf of the business owner or leadership.\u00a0 There is nothing wrong with different comp plans for different deliverables, but different comp plans for reps all selling the exact same deliverable?\u00a0 Unmanageable! \u00a0If you\u2019re paying more money or higher percentages to some, this will be discovered and drive dissention in the ranks and may result in undesired consequences. This can happen in the recruiting process, when an inbound candidate negotiates their way through your comp to make it more favorable.\u00a0 Obviously if you scored the right person it may be worth the headache; however, I\u2019ve seen this a thousand times where a negotiation to pay higher commission creates a monster.\u00a0 A rep who can live on your base and a few sales is not what you want to create. Creating high activity and momentum drives the highest ROI for your company. Slow creates slower and when your \u201chigher talented\u201d reps are not at the front of the pack raising the bar, where do you think the others will be? Sales compensation isn\u2019t a toy to play with, it\u2019s a tool that helps guide your sales organization to the direction and behavior that best serves your company\u2019s future. As powerful as a great comp plan can be, it seems that there are some folks that you simply cannot please.\u00a0 Not in every company, but in many, there seems to be confusion sometimes on who works for whom.\u00a0 Letting things get to this point is a mistake.\u00a0 Often I find that the sales team has control of the company and the pace of sales.\u00a0 They live in the lease renewals and the company is just a vehicle for the sales team to drive their income.\u00a0 Trying to change the comp in this environment is amazingly difficult and you\u2019ll probably lose those who have only been using you as a cash cow. The good news is, if they were living in your renewals you certainly can renew your own leases (most of them anyway). This leads us to the talent side of our conversation.\u00a0 Certainly you\u2019ve heard the old saying, \u201cWhat came first, the chicken or the egg?\u201d\u00a0 This applies directly to our hiring success.\u00a0 Designing a sales team model that will get the job done is so very important.\u00a0 Is it the comp plan that attracts the talent or is it talent that requires a great comp plan? And it\u2019s not about hiring a lot of people; it\u2019s about putting together a sales team strategy and attracting the right talent with the right comp plan. With any candidate you\u2019re about to hire, it is a great point of conversation to share AT THAT POINT,\u00a0 \u201cWe review our comp plans every year and […]<\/p>\n","protected":false},"author":59,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1879],"tags":[1800,2102,2101],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/11402"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=11402"}],"version-history":[{"count":2,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/11402\/revisions"}],"predecessor-version":[{"id":11428,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/11402\/revisions\/11428"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=11402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=11402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=11402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}