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Atlanta | Chicago | San Francisco | Scottsdale | Stamford
Sales CompensationHow to Retain Young High Potentials and Motivate Top Performers
September 21st, 2017
Igor Uroic, Principalo) 404.443.5354c) 404.550.3035iuroic@alexandergroup.com
Joshua Meeks, Directoro) 404.443.5359c) 214.533.2475jmeeks@alexandergroup.com
© 2016 The Alexander Group, Inc.® 2
Agenda for Today’s Meeting
2017 Sales Compensation Trends1
Engaging New Sales Talent2
Designing Engaging Sales Jobs3
Designing Engaging Sales Compensation Plans4
2017 Sales Compensation Trends
© 2016 The Alexander Group, Inc.® 4
Future Of Sales Compensation Program
0.0%
4.1%
9.0%
11.0%
75.9%
Not applicable
Reduction in the use of salescompensation
Robust program expansion
No major changes expected
Normal upgrades and alignments
Future of Sales Compensation(n=145)
75.9%Will continue to make normal
upgrades and alignment changes to
their sales compensation program
© 2016 The Alexander Group, Inc.® 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.® 6
2017 Sales Compensation Program Changes
93.1%Made changes to their
sales compensation
program for the 2017 plan
© 2016 The Alexander Group, Inc.® 7
Sales Compensation Program Plans
0.0%
1.4%
4.3%
5.7%
7.8%
8.5%
76.6%
Cancel the sales compensation program
Reduce the number of plan participants
Reduce the extent of at-risk pay
Reduce upside opportunity
Don't have/not applicable
Reduce the number of eligible jobs
No curtailment planned
Program Curtailment(n=141)
7.7%
11.9%
12.6%
12.6%
14.0%
58.0%
Don't have/not applicable
Increase the number of eligible jobs
Increase the extent of at-risk pay
Increase the number of plan participants
Increase upside opportunity
No expansion planned
Program Expansion(n=143)
76.6%Have no plans to curtail
elements of their sales
compensation program
58%Plan no expansion to
their sales compensation
program
*Multiple selections permitted for these questions
Engaging New Sales Talent
© 2016 The Alexander Group, Inc.® 9
An Impending Talent Shortage is Upon Us
Companies will lose 40 percent of their senior
talent by 2017
46% of employers in the United States are
having difficulty filling positions
Sales roles are the #1 hardest-to-fill positions
Sales Jobs are projected to grow 18.8 percent
between 2010 and 2020
– U.S. Department of Labor
– U.S. Bureau of Labor Statistics
– Manpower Group 2016/2017 Talent Shortage Survey
– Korn Ferry Institute, The Talent Forecast (2017)
© 2016 The Alexander Group, Inc.® 10
Group Discussion
Who are these generations?
What is Important to them?
What is unique about today’s work environment?
What is true about all 20 somethings?
How are 20 somethings different today?
Is their anything we should change about work?
© 2016 The Alexander Group, Inc.® 11
What Do Talented Sales People Value
*Source: Glassdoor Sales survey, 2014
72%
65%
48% 46%
38%
Salary &Compensation
Career GrowthOpportunities
Company Culture Relationship w/Manager
Senior Leadership
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:
© 2016 The Alexander Group, Inc.® 12
Sales Compensation Trends For Millennials
92.2%Report that they do not
provide special treatment
for millennials
0.0%
0.0%
0.7%
0.7%
0.7%
0.7%
0.7%
0.7%
2.1%
2.1%
2.8%
2.8%
92.2%
Increased guarantees
Greater use of team measures
Other
Not applicable
Easier quotas
Improved signing bonuses
College loan payments
Greater use of guarantees
Enhanced recognition events
Higher base pay/lower incentive
More frequent rewards
Enhanced engagement methods
No special treatment
Millennials(n=141)
`
*Multiple selections permitted for this question
© 2016 The Alexander Group, Inc.® 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.® 14
How do we Enable Organizations
Define sales jobs to
effectively communicate
with sales talent
Job Clarity#1
Develop career paths to
show sales talent what the
future could look like
Create Career Paths#2
Create and align sales
compensation plans with
sales jobs.
Sales Compensation#3
Designing Engaging Sales Jobs
© 2016 The Alexander Group, Inc.® 16
Evolution of Sales Organizations
BASE Growth
HIGH Growth
LOW Growth
Reposition
GrowSelect
Markets
Grow; KeepCustomers
Launch NewProducts
ControlPricing
ReduceCosts
Grow
GrowReallyFast
Phase I
Start-Up
Phase IV
Optimization
Phase II
Volume Growth
Phase III
Re-Evaluation
Re-ThinkProduct &
MarketStrategy
Role Clarity Ultra SpecificAmbiguous Generalized Well-defined
Flexibility MinuteHigh Moderate Limited
© 2016 The Alexander Group, Inc.® 17
Determine the Type of Selling
Alexander Group Sales Strategy Matrix
© 2016 The Alexander Group, Inc.® 18
Identify Key Sales Roles
© 2016 The Alexander Group, Inc.® 19
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.
Create Descriptive Job Abstracts
Sales Process Complexity
Low Medium High
Sales Process Key Customers
Identify / Qualify
Lead
Qualify &
Develop
Oppty
Negotiate
and
Close
Fulfill
Sales Process
Hunting v Farming
Hunting Farming
Primary Secondary No / Minimal Focus
R P
New
Current
Current New
C: Conversion P: Penetration R: Retention
Sales Strategy
Bu
ye
rs
Products
C
Interacts With:
Focus Products All Branded Products
All SD Products
Product Manager A
Product Manager B
Specialist (All Products)
Field Engineer (All Products)
Lead Gen Rep
Sales Support Associate
Strategic Accts
Named Accts
Low
Growth or
Focus
Growth /
Low
Overlap
Growth /
High
Overlap
Tier 1
Tier 2
Tier 3
Tier 4
Coverage Framework
Key Verticals
Financial Services
Retail & Hosp
Healthcare
Low Growth / Focus
Growth / Low Overlap
Growth / High Overlap
Strategic Account Executive
© 2016 The Alexander Group, Inc.® 20
Develop a Clear Career Path for Sales Roles
Professional/Technology
P1
P2
P3
P4
P5
Jo
b L
evel
Enterprise
Account Manager
Key Account
Manager
Account Manager
Inside Account
Manager
Customer Service
Career Path
© 2016 The Alexander Group, Inc.® 21
Benefits of Career Pathing
How “my job” fits within the overall career
frameworkTransparency
Internal value and externally consistencyInternal/External Equity
Objectivity in determining pay & promotionsIncreased Objectivity
Common platform to improve fairness in pay
and promotionsFairness
Tools to link job contribution to rewardsTools
Designing Engaging Sales Compensation Plans
© 2016 The Alexander Group, Inc.® 23
Financial
Diligence
Effective
Communication
Efficient
Administration
Sensible
Governance
Attract, Retain, and Reward World Class Sales Force
EligibilityPay Mix &
LeverageMeasures
Mechanics
&
Pay Curve
Perf. &
Payout
Periods
Quota
Crediting
&
Policies
Special
Incentives
Aligned to
Strategy and JobMotivational Pay for Performance
Component
Guidelines
Support
Elements
Guiding
Principles
Goal
1 2 3
1 2 3 4
1 3 4 5 6 7 8 9Total
Target
Comp
2
Sales Compensation Design Framework
© 2016 The Alexander Group, Inc.® 24
Pay for Performance Philosophy
Low Performers Median Performers High Performers
75th
50th
25th
TT
C P
erc
en
tile
s
© 2016 The Alexander Group, Inc.® 25
Base
SalaryBase
Salary
Target Total
Cash
Compensation
Base
Salary
GainsharingAdd-On3x
Uncapped
Types of Variable Compensation Plans
Base
Salary
2x
CappedUnit Rate
No RiskRisk
Target PayTarget Rate
Types Of Variable Compensation Plans
25
© 2016 The Alexander Group, Inc.® 26
Pay Mix: Pay At-Risk Decision Guide
Less Aggressive More Aggressive
Target Total
Compensation
0%
100%
70%
30%
50%
50%
90%
10%
Target Incentive
Base
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
Job Type Service Sales
X
© 2016 The Alexander Group, Inc.® 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.® 28
Mechanics and Pay Curves Overview
Closing Remarks
© 2016 The Alexander Group, Inc.® 30
Closing Remarks
Augment your business programs to address generational
differences
Define you jobs; Develop career paths & Design compensation
plans that reinforce the right behaviors
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!
© 2016 The Alexander Group, Inc.® 31
Joshua Meeks
Director
404.443.5359
jmeeks@alexandergroup.com
Igor Uroic
Principal
404.443.5354
jmeeks@alexandergroup.com
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