We’re in a new era of sales today that is very different from the old-school style of selling. With the projected elimination of over 1 million jobs from B2B sales over the next five years, according to Forrester, there is going to be a sea change in the structure of this category, and your company may need to prepare. These changes are happening predominately because of the impact of the Internet.
You might find yourself in a position of cutting jobs in service, demonstration support and quotation process support. Your remaining salespeople will focus on complex sales involving larger buying and selling teams and longer sales cycles for bigger contracts.
As you can well imagine, this will change the structure of your sales team considerably, as well as the sales compensation model. Your company will likely need to adapt to a compensation model based on shared work, as team selling becomes the norm. And it should, if you want to retain the best salespeople for your company.
Below are 3 key ways your sales compensation model might need to change to adapt to the new team-selling era of sales.
1) More base, less commission. Customers are no longer making decisions by interacting through one touchpoint. And companies are addressing each step of the customer and prospect lifecycle differently through lead nurturing, marketing automation and digital content. As a result of this multichannel approach, sales positions are becoming an integrated part of a more holistic process and are functioning as one contributor to a broader team. As a team player, these positions will be compensated in a more traditional format of base salary with bonuses and benefits, rather than being individually recognized for singular contributions of acquiring or growing an account.
For those people who are, by nature, individual contributors, this is going to be a challenging model of compensation. The data from the Forrester report indicates that there will be a 22% reduction in these types of individual contributor positions over the course of the next five years. That does not mean that there will be an elimination of them altogether, but this idea of the road warrior sales representative is quickly becoming the exception.
2) Fewer contests. As a result, there will be a diminishing need for sales contests, although they will not go away completely. As long as a direct line between single effort and incentive can be drawn, then companies will draw it. There will likely still be contests in those organizations whose sales are transactional and allow for singular or territorial evaluation of contribution, but this will decrease over time as well.
3) More team pay, less player pay. There will be opportunities for teams to receive compensation for their contribution as they land large contracts and achieve goals. What will be challenging will be the ability to parcel out compensation over time for measurable and sustained efforts due to the dynamic changing nature of teams. Teams will form and be reshaped as their skills are assigned and then reassigned based upon the unique needs of individual sales opportunities identified by executives. For that reason, event compensation for uniquely assembled groups who secure a defined contract will more than likely become the norm instead of individual bonuses based on sustained effort.
To sum up, salespeople still will be accountable, performance still will be measured and the winners still will be rewarded and the losers tossed. The sales team and system will simply look a lot more like the rest of your business systems and personnel than your past sales systems. That is because the world is more complex than it once was and now all of your business will reflect that reality.
While progress has its pains, it also has its rewards, including being able to attract and retain top-tier sales professionals. And that’s something worth changing for.