Prior to working at Clarasys, I ran a sales operations team at a large telecoms organisation. I supported staff there during the merger with a slightly smaller, but still complex, company. The larger business was a complicated machine. There were a lot of staff, most of them had different titles, even though they were doing very similar jobs, and there were a plethora of complex incentive plans.
When the smaller firm came on board, we noticed how simple and streamlined its sales structure was and it was fascinating watching the two organisations coming together. What I admired about my large employer was its willingness to change. Decision-makers recognised the organisation’s shortcomings and wanted to make it more dynamic. We worked hard to simplify our internal structure using the smaller company’s model.
With that in mind, I have listed a few ways organisations can create simplicity within their sales structures.
Maximise active selling time
Excessively complex processes confuse customers and stop sales people selling.
In B2B organisations, sales people can be earning six-figure salaries and they shouldn’t be tied up doing data entry or administration. Tasks like that can be automated or done by a lower cost resource.
Make processes as simple and straightforward as possible. Minimise non-value-added time by making sure the right person is doing the right activity. Sales people should be talking to customers, driving sales and managing customer relationships.
In a large B2B sales organisation, there is usually a huge sales team made up of account directors, account reps, various product specialists, business development specialists, pre-sales and more, and often each of them has individual sales titles. Defining what everyone does and what they are accountable for can be problematic. It can also be hard deciding who gets compensated for a sale.
Building a sustainable sales team in this environment can be tough. How do you allocate new opportunities and avoid perceptions of unfairness?
The solution is to ensure roles are based on the client’s path to purchase and not your own internal policies. This can be hard to get right in complex multi-channel organisations with broad product sets and differing customer requirements. However, it is worth trying to move towards a simpler model because significant gains can be made in the longer-term.
I have worked with organisations where almost everyone had their own negotiated commission plan.
I have also seen incentive plans with as many as 12 different measures – multiple targets and accelerators were the norm. When there are that many different conflicting targets, sales people don’t really know what is expected of them.
I understand it is tempting for product teams, finance teams and customer services all to have additional measures to suit specific purposes. But in large B2B organisations you can end up with Frankenstein plans which are trying to do everything for everyone.
Individual commission plans create a significant administrative overhead and distort incentives. People can also spend a lot of time shadow accounting in a bid to work out what their commission is going to be. They shouldn’t need a degree in data science to work out what will be in next month’s pay packet.
As a rule of thumb, there should be no more than three measures, typically profit-based. There should be one plan per sales role with limited sharing of targets.
Boiled down, the commission payment should be a fair share of the commercial success which the sales person generates.
To summarise, these are the three aspects of sales which, I believe, should be made as simple as possible. Once this is done, most B2B organisations will gain significant benefits.