I’ll be leading a session sponsored by the Tampa Bay Business Journal and the Centre Club. If you’re going to be in the area, I hope you can join me. Click here to register!
Changing Sales Compensation Won’t Fix Your Revenue Growth Problem
There is no silver bullet when it comes to leading revenue growth. But if I were to nominate the idea “most likely to be considered a silver bullet” in this category, it would change the sales compensation plan. It is a popular topic, immediately tangible, and can be tracked on a spreadsheet-what more could you ask for, right? Unfortunately, it doesn’t work. Here’s why changing the sales compensation plan is unlikely to yield great results for you:
Changing the compensation plan will not make your salespeople perform better.
It’s popular to say that salespeople are “coin-operated”, but they actually aren’t driven by financial rewards any more than CEOs, CFOs, lawyers, or anyone else who prioritizes earning money in their career. Contemporary research indicates that financial remuneration is one of a handful of hygiene factors-issues that are most noticeable when they are absent or insufficient-that affect how we feel about our job. Compensation is an enabler more than a motivator.
It’s possible that you might get a greater commitment from your sales team by trotting out a new compensation plan. That could have an impact if your lack of growth is because they aren’t working hard enough. Changing the compensation plan could also be an opportunity to shift focus. Which can certainly help you emphasize a specific product line, product and service combination, or re-allocate effort toward a certain type of customer?
But ultimately, simply changing how you compensate your sales team won’t make people better at their jobs, and that’s the underlying issue you are trying to address. The answers to fixing your revenue growth problem include:
- Clarify your strategy and drill down on your ideal client profile. Then make sure your sales team knows how to execute on that strategy and prioritizes ideal clients, rather than believing any sale is a good sale.
- Focus your sales team on bringing added value to your clients, beyond the sales transaction.
- Provide consistent developmental coaching (and asking for numbers updates is not coaching).
These ideas may not seem as exciting or tangible as a shiny new compensation plan, but this is the roll-up-your-sleeves hard work of great leaders. Of course, it’s important to have a compensation plan that supports sales growth goals, and it ought to be very clear and straightforward. But compensation solutions don’t fix capability issues. A compensation plan is no substitute for leadership.
In case you missed it last month, check out my latest whitepaper “Sales – Where Strategy Goes to Die.”
I’ll be speaking on this topic at Tech Data’s upcoming TechSelect conference this week in Savanah.
A Slice of Life Balance
Everyone gets sick occasionally, even high performers. When you get hit with a nasty virus, allow yourself the recovery time needed to get better. Sometimes, illness is a not-so-subtle message that you are pushing yourself too hard or that something is amiss in your environment. Take heed. Don’t go back to the same routine as soon as you feel marginally better. Consider possible causes, even if it’s an obvious “bug that’s been going around.” Perhaps there are lifestyle issues (insufficient sleep, poor diet, non-stop stress, etc.) that made you more susceptible. A few small changes in your habits could increase your resistance the next time a bad bug comes to town.
(And yes, I was just sick. Miserably. I must have picked it up volunteering at my daughter’s kindergarten class, which is a petri dish of germs. But I’ve volunteered before and left unscathed.)
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