Keeping Your Salesforce Motivated through the ‘New Normal’

The pandemic has accelerated several trends that have been disrupting the industry for more than a decade. The shift to online selling is one of them, as consumers stayed at home to stop the spread of the coronavirus. In addition, mobile apps and websites enabled customers to buy a different mix of products than they had previously purchased in stores [1] .

18 months later, organisations are trying to navigate their return to what they hope will be a more stable situation. A key part of their strategy has been focused on revising their total rewards model to reflect changes to both financial and non-financial incentives. Whilst the Employee Value Proposition work post-pandemic applies to all employees, sales teams require a separate lens and have experienced a highly unpredictable period.

We talked with  Vicki Badham  and  Jon Clark, MCR’s Sales Reward Practice Leads,  to hear their thoughts on how the pandemic has impacted sales reward. This is particularly relevant at the moment as organisations begin to consider the design of their sales reward plans for the next financial year.

This is, to a large extent, a double-edged sword because some organisations have benefited hugely from COVID, while for other organisations, the opposite is true. The response to COVID was largely determined by the degree of financial impact to the business. For those organisations who experienced 20%+ [2] negative impact, priority outcomes included focusing on existing customers and their challenges, using sales resources well while they were spending less time selling and/or maintaining a reasonable income level for salespeople. Primarily, the degree of impact (either negative or positive) would have an effect on the extent to which the plans need to be amended, in the light of the predicted improving or worsening sales performance.

Vicki highlights “The impact of COVID had to be reflected in the commission plans. For instance, organisations have had to consider introducing soft caps and reconsider other design mechanics including commission tiers and non-cash recognition mechanisms have increased in usage”.

“Organisations are recognising that there is more value in a cross-portfolio approach than a segmented approach; sales teams that were segmented are now being linked together through different pods by geographies or customer types”. In this way organisations are trying to enhance the cross selling that can significantly increase existing account-based revenue generation.

The pandemic has also accelerated previous trends: omnichannel selling, inside sales, tech-enabled selling and e-commerce (McKinsey) [3] . 79% of B2B companies are likely to sustain these shifts for 12+ months post-COVID. Telesales have always been a prominent part of many organisation’s sales strategies, but there has been a shift to inside sales from field-based sales. However, there is a limitation to what you can sell effectively online, and post-pandemic there may well be a partial rebound to field-based sales. The balance has changed and organisations are looking at the new balance to increase selling efficiency. Clearly this has resulted in a need to repurpose some sales roles.

Jon commented: “The primary lesson coming out of the pandemic is ‘don’t jump to redesigning the plan; see what happens’. Organisations are mindful of the need to have the right talent still in place to function when they come out of the pandemic so are focusing on doing what needs to be done to keep the sales force motivated”.

According to Jon and Vicki, there are a number of shifts in practice that need to be highlighted. The first is gamification which is greatly enabled by technology and is a relatively new space in sales. SPM and technology have made it much easier to set up contests, run SPIFFs, and short-term product focused incentives and technology has given businesses more tools for incentives providing more flexibility and agility in responding to the market. While SPIFFs are not new, gamification enables organisations to achieve incremental gains in difficult selling environments.

Jon adds, ‘‘The whole area of team-based reward is gaining a lot more ground, which is primarily determined by how customers want to buy’’. This is partly because technology and pharma selling are becoming more complex due to increasingly sophisticated buying and a more complex solution offering. The last 18 months have also shown that it is vital to mobilise and co-ordinate all available selling capability. It is necessary for a business to define team-oriented behaviours if they want proper collaboration. The ‘lone seller’ is a thing of the past in many sectors.

Digital disruptions and technological revolutions have changed customer preferences dramatically over the past few years. To keep with up with increased digital sales, organisations are engaging with software systems to analyse data. The systems have increased functionality allowing organisations to make data-informed decisions. The invention and reinvention of new technology is a continuous process. This is paving a way to make sales smarter and more agile. Organisations have started thinking about how they can automate selling or whether they need sales teams, sophisticated algorithms or both? The personal touch is important but there could be an exciting combination of both.

To be successful, organisations need to grow, develop and diversify. Sales transformation is a part of any business transformation rather than the sole driver of it. The pandemic may have interrupted the growth trajectory of many organisations and completely undermined others. For some organisations it might only have been a minor blip. Certainly, it will have caused many to review their sales strategy, adding to a list of triggers that also includes a shift in customer focus, mergers, divestitures or moving from being locally centralised to having global ways of working. New products give organisations the fuel to maintain their market share and sustain growth.

Sales transformation is critical as businesses go through the various stages of maturity and in response to digitalisation. Any business change or transformation triggers the need to look at the sales team and how they operate and perform, in addition to other issues such as retention, low productivity and lack of alignment of sales reward to the business strategy. Vicki adds, “If you understand where a business is in any stage of its development, you can understand what sort of incentives are required” .

Sales effectiveness can also be influenced by poor sales leadership, inadequate training, a lower focus on performance management and a weak target setting process.  MCR supports organisations by providing a detailed diagnostic review to assess where the gaps lie and how they could be linked to a broader sales effectiveness issue.

Jon’s perspective outlines – “The pandemic has caused many to review their plans. It is worth highlighting that here are various types of gaps within sales incentive plans that need to be addressed. These gaps existed in the old normal too, but given the shift in market practice, it’s vital to get these aspects right”:

MCR can offer an  evidence-based, independent review through an expert lens and provide recommendations for change,  using a tried and tested methodology to develop a defined roadmap for success. Additionally, we provide clients with a deep understanding of different environments reflected by years of experience in sales incentive design across many sectors. Whilst sales incentive design is the primary focus, we blend in total reward, organisation design, learning and development where appropriate.

1.

https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/what-consumer-goods-sales-leaders-must-do-to-emerge-stronger-from-the-pandemic

2.

https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/how-b2b-sales-have-changed-during-covid-19

_____________________________________________________________________________________________________

Vicki has over 20 years of reward consulting experience during which time she has supported many organisations with the review and redesign of their sales incentive schemes within the context of wider sales effectiveness projects.

Jon has over 20 years reward experience, focusing on sales incentive design and sales effectiveness capabilities to develop more successful salesforces, working with Sales Leaders and Heads of Reward across all sectors, both nationally and internationally.