Sales Compensation How to Retain Young High Potentials and Motivate Top Performers

Transcription

1 Sales Compensation How to Retain Young High Potentials and Motivate Top Performers September 21 st, 2017 Igor Uroic, Principal o) c) Joshua Meeks, Director o) c) Atlanta Chicago San Francisco Scottsdale Stamford

2 Agenda for Today s Meeting Sales Compensation Trends Engaging New Sales Talent Designing Engaging Sales Jobs Designing Engaging Sales Compensation Plans 2016 The Alexander Group, Inc. 2

3 2017 Sales Compensation Trends

4 Future Of Sales Compensation Program Future of Sales Compensation (n=145) Normal upgrades and alignments 75.9% No major changes expected 11.0% Robust program expansion 9.0% Reduction in the use of sales compensation Not applicable 4.1% 0.0% 75.9% Will continue to make normal upgrades and alignment changes to their sales compensation program 2016 The Alexander Group, Inc. 4

5 Sr. Management Support For The Sales Comp Program 46.2% Report high support from senior management for the existing sales compensation program 2016 The Alexander Group, Inc. 5

6 2017 Sales Compensation Program Changes 93.1% Made changes to their sales compensation program for the 2017 plan 2016 The Alexander Group, Inc. 6

7 Sales Compensation Program Plans Program Curtailment (n=141) No curtailment planned Reduce the number of eligible jobs 8.5% Don't have/not applicable 7.8% Reduce upside opportunity 5.7% Reduce the extent of at-risk pay 4.3% Reduce the number of plan participants 1.4% Cancel the sales compensation program 0.0% 76.6% 76.6% Have no plans to curtail elements of their sales compensation program No expansion planned Increase upside opportunity Increase the number of plan participants Increase the extent of at-risk pay Increase the number of eligible jobs Don't have/not applicable Program Expansion (n=143) 7.7% 14.0% 12.6% 12.6% 11.9% 58.0% 58% Plan no expansion to their sales compensation program 2016 The Alexander Group, Inc. *Multiple selections permitted for these questions 7

8 Engaging New Sales Talent

9 An Impending Talent Shortage is Upon Us Companies will lose 40 percent of their senior talent by 2017 U.S. Department of Labor 46% of employers in the United States are having difficulty filling positions Manpower Group 2016/2017 Talent Shortage Survey Sales Jobs are projected to grow 18.8 percent between 2010 and 2020 U.S. Bureau of Labor Statistics Sales roles are the #1 hardest-to-fill positions Korn Ferry Institute, The Talent Forecast (2017) 2016 The Alexander Group, Inc. 9

10 Group Discussion Who are these generations? What is Important to them? What is true about all 20 somethings? What is unique about today s work environment? How are 20 somethings different today? Is their anything we should change about work? 2016 The Alexander Group, Inc. 10

11 What Do Talented Sales People Value 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: 72% 65% 48% 46% 38% Salary & Compensation Career Growth Opportunities Company Culture Relationship w/ Manager Senior Leadership *Source: Glassdoor Sales survey, The Alexander Group, Inc. 11

12 Sales Compensation Trends For Millennials Millennials (n=141) No special treatment Enhanced engagement methods More frequent rewards Higher base pay/lower incentive Enhanced recognition events Greater use of guarantees College loan payments Improved signing bonuses Easier quotas Not applicable Other Greater use of team measures Increased guarantees 2.8% 2.8% 2.1% 2.1% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.0% 0.0% ` 92.2% 92.2% Report that they do not provide special treatment for millennials *Multiple selections permitted for this question 2016 The Alexander Group, Inc. 12

13 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 2016 The Alexander Group, Inc. 13

14 How do we Enable Organizations #1 Job Clarity #2 Create Career Paths #3 Sales Compensation Define sales jobs to effectively communicate with sales talent Develop career paths to show sales talent what the future could look like Create and align sales compensation plans with sales jobs The Alexander Group, Inc. 14

15 Designing Engaging Sales Jobs

16 Evolution of Sales Organizations Phase I Start-Up Phase II Volume Growth Phase III Re-Evaluation Phase IV Optimization HIGH Growth Grow; Keep Customers Grow Grow Really Fast Launch New Products Control Pricing Grow Select Markets BASE Growth Reposition LOW Growth Reduce Costs Re-Think Product & Market Strategy Role Clarity Ambiguous Generalized Well-defined Ultra Specific Flexibility High Moderate Limited Minute 2016 The Alexander Group, Inc. 16

17 Determine the Type of Selling Alexander Group Sales Strategy Matrix 2016 The Alexander Group, Inc. 17

18 Identify Key Sales Roles 2016 The Alexander Group, Inc. 18

19 Buyers Create Descriptive Job Abstracts Strategic Account Executive 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. Sales Strategy New Current R Current Sales Process C Identify / Qualify Lead P Products New C: Conversion P: Penetration R: Retention Qualify & Develop Oppty Primary Secondary No / Minimal Focus Coverage Framework Tier 1 Tier 2 Tier 3 Tier 4 Negotiate and Close Low Growth or Focus Growth / Low Overlap Fulfill Growth / High Overlap Interacts With: Product Manager A Product Manager B Specialist (All Products) Field Engineer (All Products) Lead Gen Rep Sales Support Associate Focus Products All Branded Products All SD Products Sales Process Sales Process Complexity Low Medium High Hunting v Farming Hunting Farming Key Customers Strategic Accts Named Accts Key Verticals Financial Services Retail & Hosp Healthcare Low Growth / Focus Growth / Low Overlap Growth / High Overlap 2016 The Alexander Group, Inc. 19

20 Job Level Develop a Clear Career Path for Sales Roles Professional /Technology P5 Enterprise Account Manager P4 Key Account Manager P3 Account Manager P2 Inside Account Manager P1 Customer Service Career Path 2016 The Alexander Group, Inc. 20

21 Benefits of Career Pathing Transparency How my job fits within the overall career framework Internal/External Equity Internal value and externally consistency Increased Objectivity Objectivity in determining pay & promotions Fairness Common platform to improve fairness in pay and promotions Tools Tools to link job contribution to rewards 2016 The Alexander Group, Inc. 21

22 Designing Engaging Sales Compensation Plans

23 Sales Compensation Design Framework Goal Attract, Retain, and Reward World Class Sales Force Guiding Principles Aligned to Strategy and Job Motivational Pay for Performance Component Guidelines Eligibility Total Target Comp Pay Mix & Leverage Measures Mechanics & Pay Curve Perf. & Payout Periods Quota Crediting & Policies Special Incentives Support Elements Financial Diligence Effective Communication Efficient Administration Sensible Governance 2016 The Alexander Group, Inc. 23

24 TTC Percentiles Pay for Performance Philosophy 75th 50th 25th Low Performers Median Performers High Performers 2016 The Alexander Group, Inc. 24

25 Types Of Variable Compensation Plans Target Rate Target Pay Risk No Risk Unit Rate 3x Uncapped 2x Capped Add-On Gainsharing Target Total Cash Compensation Base Salary Base Salary Base Salary Base Salary Types of Variable Compensation Plans 2016 The Alexander Group, Inc. 25

26 Pay Mix: Pay At-Risk Decision Guide 100% 10% 30% 50% Target Total Compensation 90% Target Incentive 70% 50% Base 0% Less Aggressive X More Aggressive Job Type Service Sales 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 2016 The Alexander Group, Inc. 26

27 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 2016 The Alexander Group, Inc. 27

28 Mechanics and Pay Curves Overview 2016 The Alexander Group, Inc. 28

29 Closing Remarks

30 Closing Remarks 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! Augment your business programs to address generational differences Define you jobs; Develop career paths & Design compensation plans that reinforce the right behaviors 2016 The Alexander Group, Inc. 30

31 Igor Uroic Principal Joshua Meeks Director The Alexander Group, Inc. 31