Recession. Down market. What’s happening to sales? If you find yourself in this situation, read on. While sales comp alone isn’t an answer, there are many levers you can pull to help.
For starters, you should immediately look to the information stored in your commission system for analysis. Here you can see if you are paying for performance; see blog entry, "Are you Paying for Performance", carrying poor performers, or have any super stars. If you look at the performance distribution curve, you will have a great starting point for optimizing your team.
With this perspective in mind, the top strategies are:
- Optimize your productivity
- Look for new market opportunities
- Reduce costs.
Optimize productivity. There are a number of possibilities here.
First, you should consider rebalancing territories.
This problem will be obvious if you have one super star in a lucrative territory while others are well below quota.
By providing equal opportunity to all, motivation will increase.
Second, consider lowering the quota.
Remember, you want 60% of your team to be at or above quota to keep their motivation high.
If you are certain your sales are going to drop, lower the quotas so the team is energized while you cut costs elsewhere.
Look for new market opportunities. Now is the time to analyze your customers and identify any patterns of success. You may find that certain products are more profitable than others or you are getting traction in a particular vertical. Once you have identified a new market opportunity, changing the compensation plan to focus reps on the new area will reap immediate rewards.
Reduce costs. Many companies we are working with are combining the strategies above with lowering the base salary and increasing the upside incentive potential. With clear plans and a more lucrative upside, they are able to keep teams motivated while lowering the fixed salary cost.
These are a few ideas. Come to our free webinar on Dec 10th "Sales Compensationfor Tough Times" to learn more.