In an LinkedIn discussion I started recently I aimed to get some answers upon the thought if sales reps care to sell your profitable products or just the ones they feel are the easiest to sell or are most comfortable selling.
The audience was really active and helpful, I got many valuable insights and perspectives.
However, the result was also somewhat shocking.
Most of the comments told me that if I just put a compensation plan in charge I will get any of the products sold – but it has to be compensated.
That makes me worried. By nature, a compensation plan is at operational level – how many phone calls to perform, sales meetings, quotes etc as well as order revenue metrics per week and year. These KPI’s may be – hopefully – be connected to the overall strategic goals (check out our sales scenario app at AppStore: http://itun.es/se/-x4oH.i), but the compensation plan is usually written on a yearly basis.
My experience is that you by then has no chance to act agile in between. My colleuage, Håkan, wrote a blog post last year that said something like: “if things go wrong – and they do…”, in “With a map and a compass”, which is true. The essence is that it is a need to set a sales strategy. You really need all people you have on board to go in the right direction and act on a daily basis to fulfill that strategy. As stated above: connect the strategic goals to an operation level.
But then you cannot – in your intentions to secure your strategic goals – go on cementing your KPI’s in compensation plans and CRM alarming systems if you’re not on track.
Because the truth may be false. Things may have been happened since you printed down your strategy, of course. It may be an Italian comedian as prime minister that drives your important PIGS market to freeze status or a better development in the US employment statistics.
The only thing that is for sure is that nothing is for sure. Things are happening and if they can go wrong they intends to do so.
How agile does your business has to be? The answer on that guide you in how dynamic you need to set compensation plans and operational KPI’s.
Of course, you need that “alarm system” to tell you if the ongoing outcome deviates from your original plan, but you also need to have a “correction system”. If you wait too long acting upon deviations, you may put more and more heavy artillery in place to be on track again.
I name this intermediate stage “tactical”. You have your strategy – fine – and your activity based targets for individual behaviour on a weekly or monthly basis. However, based on the outcome, implementing the “tactical control system” would provide an agile and competetive approach that in the long run decreases your business risk as well as increase profitability.
In many ways a sound communication model is solving many issues. This discussion is not an exception. I wrote a blog post “Demand strategy decision making in an agile world” about decision making in an agile world recently. In the post you may get inspiration and help while implementing a more dynamic approch in sales.
In the end; how and what you sell has an impact on the rest of your company. My tip is to sit down once a month; look at the alarm system, take decisions, create decision points and be open minded.