A recent online article by Andris A. Zoltners, PK Sinha, and Sally E. Lorimer for Harvard Business Review contends that the proliferation of digital information and buying channels has changed the world of sales. This is not news. What is a new idea, however, is that this evolution is changing sales compensation because it is more difficult to measure how or why a sale was made.
“Multiple influences on buying reduce individual salespeople’s impact and the ability to measure it,” write the authors. “This blurs the connection between individual effort, results, and incentive pay in the minds of salespeople. Incentives become fuzzy and are no longer effective at rewarding and motivating individuals.”
What’s the solution? Better sales talent development and management. “Sales leaders and managers must take a more active role in managing salespeople,” the authors suggest.
For starters, the article recommends that organizations will need to hire sales people with new capabilities. In addition to traditional sales skills, new team members should be comfortable using digital communication such as video calls and social media with customers. Another new required skill is better understanding of—and appreciation for—data analytics.
Next, organizations need to deploy new sales team structures that work alongside other channels, including Internet and inside sales, to meet customer needs. This may require leaders to work on establishing a new sales culture that focuses on teamwork rather than competition.
Finally, you guessed it, coaching and training will be critical. The authors explain that organizations will need to “guide salespeople instead of relying on incentives as a primary means of controlling sales activity.”
For more insight and advice, read the full article: “Are Sales Incentives Becoming Obsolete?”