Untangling the Madness of Sales Compensation: Drive Sales Productivity and Stop the Distractions
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Compensation plans are key levers for sales organizations to attract top talent, increase productivity, and drive company strategy. Or they can be a nightmare of complex administration, field distraction, and cross-functional contention. Attend this session to learn how to turn around a struggling sales compensation program without resorting to consultants or rigid frameworks.
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Untangling the Madness of Sales Compensation: Drive Sales Productivity and Stop the Distractions
- 1. #AccelerateQTC#AccelerateQTC Pablo Dominguez / Tom Murtaugh / Paola Zamora May 3, 2017 Untangling the Madness of Sales Compensation Drive Sales Productivity and Stop the Distractions
- 2. Vice President, Global Business Operations Pablo Dominguez
- 3. Sr. Director, Global Business Operations Tom Murtaugh
- 4. Manager, Global Business Operations Paola Zamora
- 5. Is an internet technology company that enables and optimizes the real- time sale and purchase of digital advertising. ~1,000 Employees ~200 Sales People & Account Managers NYC HQ and 23 global offices
- 6. AppNexus Marketplace Scale average daily trades in the month of August 4.4MM 10MM trades on September 21st, 2016 150MM average transactions per day 10B peak daily impressions transacted
- 7. 7 Why Sales Compensation Is Important Largest Cost Largest Lever Competitive Advantage Biggest Distraction Sales Compensation
- 8. 8 The Plane
- 9. 9 Fixing The Plane on The Ground
- 10. 10 Fixing The Plane In Mid-Air
- 11. Work Linearly Fix all other sales strategy / processes first, compensation plans last Pros: Comprehensive. Great for merging orgs or wholly revamping orgs Cons: Slow. Not realistic / infrequent opportunity Fixing Sales Compensation Issues 11 Conventional Approach 1 – “Fix on The Ground” Segmentation Coverage Sales Process Job Design Talent KPIs / Reporting Compensation
- 12. Align compensation plans to conventional practice, fix everything else later Pros: Good CYA Cons: Plans do not match reality (noise, distractions). More consulting $$ to fix everything else to align with compensation plans Fixing Sales Compensation Issues 12 Conventional Approach 2 – “What Plane?” Segmentation Coverage Sales Process Job Design Talent KPIs / Reporting Compensation
- 13. Fixing Sales Compensation Issues “In Mid Air” 13 Approach all pieces of Sales Strategy / Process as interrelated, not linear. Focus Area Segmen- tation Coverage Sales Process Job Design Talent KPIs / Reporting Compen- sation
- 14. Fixing Sales Compensation Issues “In Mid Air” 14 When you bring a piece into focus (Compensation), understand what is not working elsewhere Focus Area Segmen- tation Coverage Sales Process Job Design Talent KPIs / Reporting Compen- sation Key Ideal Semi-Defined Undefined
- 15. Fixing Sales Compensation Issues “In Mid Air” 15 Only fix what the rest of the business can support; ruthlessly prioritize and get some big wins Focus Area Segmen- tation Coverage Sales Process Job Design Talent KPIs / Reporting Compen- sation Business unit specific plans Channel and Direct Sales Plans Updated Pay Levels Key Ideal Semi-Defined Undefined
- 16. Fixing Sales Compensation Issues “In Mid Air” 16 Create a roadmap for plan changes, but ensure other parts of the business are fixed first Focus Area Segmen- tation Coverage Sales Process Job Design Talent KPIs / Reporting Compen- sation #1 New plan measures #2 Updated crediting rules #3 Greater AM vs. AE plan differentiation Key Ideal Semi-Defined Undefined
- 17. Our Compensation Issues at AppNexus No centralized compensation team / oversight
- 18. Our Compensation Issues at AppNexus Highly qualitative plans / minimal “hard” measures
- 19. Our Compensation Issues at AppNexus No structured quota setting process
- 20. Our Compensation Issues at AppNexus Hunters focused on closing smaller deals
- 21. Our Compensation Issues at AppNexus Inconsistent upside opportunity
- 22. Our Compensation Issues at AppNexus Manual administration
- 23. Roadmap to Automation Identify greatest needs from the field / stakeholders Select a partner that aligns with needs Build Test with the field Involve the field in requirements Have an awesome launch! Setup structured feedback mechanism to identify enhancements
- 24. Original Performance Calculation “Tool”
- 25. Automation – Increased Compensation Visibility / Accessibility Helps Light a Fire for Change
- 26. 26 What You Should Do First Accept you have to fix the plane in the air1 Understand where your Sales Strategy is and isn’t defined2 Know Sales Compensation Principles3 Interview the field and your leaders4 Place compensation issues into 2 categories – now & later5 Get a big win!6 Build roadmap and link compensation to broader strategy7 Automate!8
- 27. 27 Use only “hard” measures Pay Hunters closest to the point of persuasion Move from commission to quota- based plans Fix pay level issues immediately Ensure top performers earn 3-4x target Compensation Principles
Notes de l'éditeur
- Sheila
- Sheila
- Sheila
- Pablo
- Pablo Sheer volume of our business increases complexity and amounts of data…two things that can complicate compensation
- Pablo Largest Cost Compensations costs are the biggest item on your P&L and will always be in the spotlight. Largest Lever The compensation plan is the shadow manager of your Sales Force. Sellers do what the plan says. Competitive Advantage A good compensation plan can attract top talent and accelerate execution of strategy. Biggest Distraction If the compensation plan is misaligned with what you’re asking your Sales Force to accomplish, nothing will get done.
- Pablo
- Pablo
- Pablo
- Tom
- Tom
- Tom
- Tom
- Tom
- Tom
- Tom We had no pilots flying the plane – easy fix
- Tom We didn’t have any instrumentation – flying a bit blind; but still flying. We couldn’t fix right away, but we ultimately did
- Tom We had no flight plan…we were kind of just flying and didn’t know where we were going until we got there. We fixed over two years
- Tom It was like having the crew spend the entire flight re-arranging the carry-on luggage. Everyone knew this wasn’t productive and fixed right away
- Tom Didn’t know what altitude we should fly at. We couldn’t fix right away until we decided what type of plane we actually wanted to be…but we did fix over two years
- Tom We had no autopilot to help us with administration! We fixed this immediately…Paola will tell us more about this journey
- Paola
- Paola
- Paola
- Tom Learn Sales Compensation principles (so you can break them) Interview the field and your leaders to identify your biggest compensation issues; what's distracting people Classify issues into two categories – what can you fix now; what first requires change to other sales strategy items Get a big win – fix one/a few item(s) now that would have the biggest impact If possible, make small tweaks to other items that you know will change later – to get people used to the idea of them changing Show how strategy issues align with other compensation issues (compensation is usually the symptom, not the root cause) Think about automation – even if your plans aren't perfect, better visibility to measures and performance can dramatically decrease noise from the field
- Pablo Use “Hard” measures at the lowest level Even if you can utilize hard measures, ensure culture and leadership are aligned. Moving too quickly to hard measures may be very disruptive and may not take hold. Pay Hunter’s closest to the point of persuasion If Sales Process isn’t defined and Hunter’s help drive deal realization, don’t let them off the hook after close. Move from commission to quota-based plans If you can’t set quotas…don’t. You’ll do more damage with poorly set quotas. Fix pay level issues immediately Do this carefully and thoughtfully…this fix will usually take a few years. Make sure top performers earn 3-4x target Dramatically increasing upside can have massive cost implications and can be difficult to do appropriately (without adequate data).