Everyone knows a quick repair job is never going to be a long-term solution. Although this can be an attractive option when you’re looking at inefficiencies that require immediate action, the hard truth is that it won’t be long before the problems begin to seep through again.
The problem of under-performing sales reps is often addressed by appealing to their top priority: money.
Raising commission can, for a short period, drive serious productivity, but if you focus on short-term tactical gains, you end up with a short-term solution.
Sales incentivization models are bad for your business in the long-term. Instead, work needs to be done to improve more than just your reps’ sales targets in the now, but to generate real behavioural change amongst your team.
1. Dangling a carrot won’t incentivize long-term revenue growth
If you’re looking for recurring revenue, but you pay commission according to initial order value, your reps are going to chase just that.
For example, if you want to move towards a cloud-based offering that promises long-term partnership and future revenue streams, but your salespeople can earn more money faster by selling the traditional on-premise solution, they will most likely continue to sell the on-premise version.
2. Developing your salespeople increases retention rates
Current recruitment data tells us that younger generations crave career development more than cash incentives, yet in sales there is less development opportunity than any other profession in the world.
The pursuit of a lengthy and fruitful career path pushes ambitious and talented salespeople into management roles, which is an entirely different kettle of fish than the role they just grew out of. Great salespeople rarely make great sales managers.
In the best case scenario, your top performers will stay put, continuing to operate at the top of their game, and to the detriment of the rest of your team. Why waste resource on developing your average salesperson when your best ones are meeting quotas for the entire team?
In the worst case scenario, your winning reps become tired of propping up the team and pursue ventures elsewhere, maybe even at one of your competitors. *Shudders*
3. The notion of the account team is not new, however incentive plans rarely support effort proportionally
To address the complexity of your customer’s organization in addition to the increasing numbers of stakeholders in the client’s ‘Buying Room’, you must operate as a team.
The delineation of responsibilities of those involved in a sale however is rarely structured: handover points are not defined, client communications are neglected, and your customer is left with the unnerving impression that you are in chaos.
Working these responsibilities out at an organizational level pays dividends in both the professionalism your team puts out into the market, and furthermore it sets realistic expectations in the team, allowing you to objectively assign reward.
Ultimately, driving productivity in a way that lasts depends on more than short-term incentivization models. Pursuing long-term behavioural change at an organizational level is the only avenue for truly transformational progress.
