There are few professional sales traditions more sacred than the assumption that "pay for play" compensation is the best and the only way to motivate the desired behavior we seek from our sales reps and channel partners.
Just about every modern quota-carrier is issued a modest base salary – typically and deliberately designed to not support their desired lifestyle – and then a percentage-based commission structure of one flavor or another. Tapping into financial motivations in order to generate the hoped-for results is as American as apple pie, and generations of successful President's Club B2B sales achievements serve as testament to the legitimacy of this perfectly capitalistic approach.
Times, however, are changing. Few can argue that the landscape of the customer-powered, 21st century business workplace is rapidly changing, and the Millennial-aged workforce with it. Those of us with a couple of decades' worth of sales management experience are facing the realities of employing very different, up-and-coming sales practitioners born in a digital-native world. These folks are full of expectations that both their business and personal lives will be mobilized, socialized, and self-actualized, not to mention tweeted, posted, and pinned in a 24/7 cycle of sharing.
So, does this precurse a new era of flower-child, free spirit, work-when-you-feel-like-it misery for sales VPs? Hopefully not, because down deep, we know that territories still need to be covered, quarterly growth is still expected by investors, and the business of B2B selling can never let its foot off the gas pedal.
If there is a middle ground available to modern sales leaders that achieves an effective balance between the work we still need to get done, and the human capital available to execute on it, Aberdeen's Sales Performance Management research reveals a series of best practices associated with peak business results. When survey respondents were asked to identify the most efficient arrows in their management quiver, around motivating productivity and superior sales rep results, here are the results of the top-performing 20%, or Best-in-Class, companies:
Figure 1: Motivating Sales Excellence: The Recipe Includes Many Ingredients
Predictably, and appropriately, traditional sales compensation – money – is by far the most effective motivator of great salespeople, so the lack of a surprise here serves at least to calm any fears about the earth spinning off its management axis.
And yet, check out the change since 2012, in the extent to which Best-in-Class sales organizations prioritize financial compensation: three years ago, only 2% of top performers failed to nominate cash as a top-three sales performance motivator. The number has grown twelve-fold since that time, with more than one-quarter of today’s Best-in-Class – these are the firms who are growing revenue, quota attainment, and deal size faster than 80% of their peers – failing to include money in even their top three choices when it comes to selecting the carrots and sticks used to motivate desired sales behavior.
This is remarkable when you pause to think about the seismic shift that is taking place in both sales compensation and in the relationships between managers and reps. Clearly, achieving peak B2B sales results in 2015 requires a vastly different mindset than even a few years ago, and the additional motivators in the chart above provide specific insight into this new era of sales performance management.
This is where game mechanics come into play. Our research shows that traditional sales contests of yesterday have morphed into data-driven, psychology-influenced, streamlined applications that modern sales leaders deploy to tap into all of the motivators to which professional sellers respond. Not only do Best-in-Class companies lead under-performers by 40% in adopting formal game mechanics programs, but we also see users reporting 21% more first-year reps achieving quota, and 9% higher overall team attainment of quota. Gaming-enabled sales teams also improve their year-over-year performance in total company revenue, average deal size, and lead conversion rate more effectively than non-adopters. It also helps support dynamic compensation plan designs – because business priorities change rapidly – and complex sales crediting, shared commission, and other realities of the traditional, financial side of sales motivation best practices.
We spoke above about the necessary balance that needs to be achieved in managing a modern, complex B2B sales organization: how do we keep our foot permanently pressed on the gas pedal of revenue generation, while simultaneously seeking to comprehend and leverage the dramatically altered dynamics of the 21st century sales workforce? The answer is to continue paying out monetary commissions, overrides, and spiffs through the use of efficient SPM platforms, and then to layer in the non-cash rewards and recognition associated with game mechanics deployments.
Millennial sellers are far more likely to respond positively to being recognized for jobs well done, and to contributing to team-based success, but they are not one iota less interested than their forebears in winning. You just have to figure out how to tap into their competitive spirit in a synchronized fashion that dangles a complex carrot including money, points, badges, trips, family benefits, and whatever else will elicit a positive response from your best-sellers.
Next blog: CPQ and the Zen of No More Sales Prevention