three ways sales ops can improve sales incentives

Madison | 18 East 41st Street, 13th Floor, New York, NY 10017 | 212.758.4385 | [email protected] a global leader in Social Recognition, Madison’s business approach encompasses the totality of a company’s performance drivers and focuses on the individuals responsible for ultimate success- employees, sales, and channel partners. Madison harnesses its groundbreaking, highly configurable, cloud-based Social Recognition Technology and leverages scientific priniciples and findings to guide desirable change of human behavior and elevate performance.

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We design and deliver sales contest

platforms and incentive strategies that consistently help our clients hit their

revenue targets.

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THREE WAYS SALES OPERATIONS CAN IMPROVE THE COST EFFICIENCY & MOTIVATIONAL IMPACT OF SALES INCENTIVESMike RyanSenior VP Client Strategy

Volume 26A PUBLICATION OF MADISON: A GLOBAL LEADER IN SOCIAL RECOGNITION

Our last edition of Performance Perspectives addressed the value that forward looking sales operations teams are bringing to senior sales executives—leaders who must carefully balance the long-term goals of the enterprise against the continuous pressure of hitting revenue requirements. Contemporary Chief Sales Officers (CSO) need a strong sales ops team that can keep reps focused on the specific products, services and customer segments that fuel economic growth, as well as the value-building behaviors that reinforce trust in the brand.

Balancing those initiatives takes talent and hard work and doing it well requires dexterity, skill and access to the best support and technology. That’s why many sales ops teams have developed working partnerships with Madison. We design and deliver sales contest platforms and incentive strategies that consistently help our clients hit their revenue targets while also focusing their reps on the actions and attitudes that sustain the company’s status and good standing among customers. Here are three examples of ways we have worked with sales operations teams to improve the cost efficiency and motivational impact of their sales incentive programs.

1. Maintaining Sales Focus By Filtering All Incentive Offerings

For one major pharmaceutical company, the road toward better sales contest control, efficiency and motivational impact began with a simple question directed at their sales force – do you think we are doing a good job rewarding and recognizing your accomplishments? They expected survey results to land somewhere between good and outstanding; however, when they received the results they were, as one sales ops manager put it, “floored”. Despite a funding rate that exceeded the competitive category by over 40 percent, the feedback was unacceptable. Sales people were not particularly motivated by


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any of the initiatives in place. In fact, on a five point scale the collective feedback failed to top mid-level ranges across any of the affected sales teams. The painful reality was that the sales incentive portfolio was underperforming across the ranks. The question was why?

Madison deduced that the problem was not a funding issue, but rather a communications problem. The company had numerous contests in place designed by multiple brand managers posted on their intranet. Unfortunately, most were hidden or hard to find. Sales people confessed they did not know they were eligible for some of the incentive programs until they were over. And while the winners felt as if they had accidentally stumbled upon a windfall, they were candid that the contest did little to motivate them. Reps also confessed that the sheer number of programs confused them and sometimes diminished their focus. Everything seemed to be a priority. The CSO echoed this concern and said that some contest goals conflicted with his overriding objectives.

To help streamline activity, focus attention and control fixed expenses, Madison created a centralized portal that served as the nexus of all incentive activity. Each member of the sales force was greeted with personalized information when they entered the system. They saw and tracked only the programs theywere eligible for based on the organization’s objectives. This framework allowed the company to set and communicate goals within each program in a logical and obtainable way. Madison also gathered and illustrated all the other compensation offerings on the table—including base and variable pay, time off and educational opportunities—so each rep could see, in one glance, the total investment the company was making in them.

What was the result? One year after introducing the consolidated approach, reps responded positively to the follow-up survey. They gave the company overwhelmingly high marks (averaging 4.7 on the same5 point scale). Years later those same lofty scores remain intact but the economics of running sales contests has come down significantly. Brand managers who sponsor contests say that fixed costs (previously spenton communications and technology) have declined by over 60 percent since inception. More importantly, the CSO continues to praise sales ops for their enhanced control, saying that the portal continues to assurethat all reps remain focused on the primary goals of the organization.

2. Create And Sustain A Winning Sales Process By Rewarding Behavior

As sales slipped, a global software supplier recognized that their customer’s expectations of value had shifted. Buyers appreciated advice and council as much as they did reliable functionality and were factoring it into their selection process. The CSO needed to move quickly from a transactional sales process to a consultative one. And since the higher expectations were not unique to the account executive, but carried across the entire delivery chain, he needed to include subject matter experts, implementers, accounts billing—anyone who touched the customer. He feared that the siloed mentality between organizational functions would limit their ability to deliver the type of coordinated effort his customers demanded.

To help streamline activity, focus attention

and control fixed expenses, Madison

created a centralizedportal that served as the nexus of all incentive activity.

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To better prepare all customer-facing personnel, leaders from the company’s sales ops team used Madison’s configurable technology to quickly pivot from a traditional revenue heavy earning incentive structure to one that also encouraged and rewarded the right type of behaviors and activities throughout all phases of the sales process and customer care lifecycle. Madison integrated a balanced scorecard into the recognition process that combined business building metrics with feedback from customers and colleagues alike. The blended score determined the total value delivered by each employee. We worked with the sales ops team from concept to creation by developing the economic business case for the new sales incentive structure, helping the leadership team weave the approach into their branding strategy and positioning the behavior based recognition model as a tool to promote and increase customer satisfaction.

Sales efficiency and customer value measures improved. New cycle times shortened by 25 percent while existing customer renewals accelerated. Customer share deepened, closed deals expanded in volume and velocity. Both the CSO and the CMO benefited. Sales efficiency reduced aggregate acquisition costs while the deeper and longer customer penetration rates increased lifetime values. In addition, cross-functional members of the sales and customer support groups reported higher job satisfaction scores and stronger engagement levels. The firm noticed that turnover rates in the targeted areas fell well below the company average for all other employees. Today this software services giant remains a leader in the category, outgrowing rivals in each of its key market verticals.

3. Grow The Sales Force By Incenting “Core” Performers

A smart sales ops team implements program structures designed to make all employees better performers. They purposely put as much weight on motivating and growing average performers as they do their top players. One luxury automotive company utilized Madison to restructure their dealer sales programs to do exactly that.

After examining their existing plan, it was obvious that the company relied on a one-size-fits-all reward structure across the board. This myopic approach represented a missed opportunity to motivate a wider range of individuals within each dealership. To make their incentive contests more meaningful for both sales and service employees, Madison helped design targets and payoffs around an individual’s ability to contribute. Using our technology, the automotive company was able to set and communicate dealer sales growth thresholds based on any number of factors; internal rankings, past performance, experience with certain models, or other variables that were likely to impact comparative success—like their geographic location within a competitive marketplace. While individual attainment goals varied, the staff’s cumulativeobjectives were aligned with the aggregate goals of the dealership, saving the integrity of the corporate sales forecast.

The result? Sales for both new and previously owned vehicles challenged all-time records with purchases

A smart sales op team implements program structures designed to make all employees

better performers.They purposely put as much weight on motivating and growing average performers as they do

their top players.

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and leases topping the forecast by 44 percent. If that was not enough, surveys also indicated that 96 percent of all participants rated the manufacturer sponsored program as very good or excellent—helping it to secure its “share of voice” within the dealership community.

SUMMARY

For sales ops, supporting the CSO as they balance the long-term mission of the enterprise against the day-to-day pressures of making numbers requires the kind of skill and support Madison delivers every day. With our experience, insight and technology we have helped many leading global organizations improve the cost efficiency and motivational impact of their sales incentive investment. Our centralized sales incentive portals have helped sales ops streamline activity, focus attention and control fixed expenses. Asselling becomes an increasingly competitive endeavor, Madison continues to help organizations move from a transactional sales process to a consultative one by encouraging everyone that touches the customer to embrace new behaviors and more relevant goals.

Our centralized sales incentive portals have

helped sales ops streamline activity, focus attention and

control fixed expenses.

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three ways sales ops can improve sales incentives

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