Susan Marot

By Susan Marot susanmarot

How to incentivise your sales team is a political hot potato in many organisations. Get it right and business growth will support the overall strategic direction of the company. However get it wrong and, well, can you afford to risk getting it wrong?

An effective incentive scheme for the sales force of any organisation will have a greater impact on that company’s results that any other single document. It impacts the behaviour of the sales team in a direct fashion. Therefore the more care and attention given to this document, the greater probability of achieving the overall objectives for the business.

The best sales compensation programs are ones that are fair, motivating and will achieve the goals of the company. Every business needs to make certain that its reward and recognition scheme motivates the sales force to achieve corporate objectives. Sales people are very quick to look at compensation packages and figure out how to maximise it only to benefit themselves. Therefore it is important to make sure that when sales people maximise their individual compensation, they also maximise corporate revenue and corporate objectives.

In order to guide the creation of an effective incentive scheme, I would say there are 10 simple principals. Following these will ensure a company’s commission scheme is an incentive to the sales people, without giving too much of the company’s money away.

• Involve your sales people appropriately in the compensation program
• Don’t make your offer letter a commission plan, keep them separate
• Pay commission regularly, on time and happily
• Furnish supporting data with the sales person’s payments
• Keep stability in the sales incentive structure
• Make your earnings plan realistic
• Align your compensation scheme with the company’s plan for growth
• Make the plan as simple as possible, but not simple for the sake of being simple
• Reward sales based upon effort
• Review and modify as needed

Designing a scheme that keeps within the rules can be a time consuming task. It will never be perfect for everyone, but by keeping within these guidelines any company should have a well motivated sales force that helps, not hinders, the business to achieve its goals.

Sales operations are complex and have a lot of moving parts. One way to help stabilise the sales operation is to have a functioning sales compensation plan that is motivating to a sales team, and moves the company forward in the right direction.

Incentive schemes can be rewarding and motivating if done correctly. They can have a negative impact on motivation resulting in lower sales, when structured poorly. There is no one-size fits-all process for developing a motivating compensation plan, but by following these 10 simple principals you might just get there a little quicker!

Lincolnshire-bred business woman Susan Marot runs Marot Associates Ltd, which helps businesses sell more by improving their sales process. Susan works with them to design, improve or even deliver the sales the company needs. A sales person for almost 30 years, Susan is often engaged to speak at events on selling and has regular articles published by the Institute of Sales and Marketing Management in "Winning Edge".

By Susan Marot susanmarot

I wonder how many people reading this article will actually know what CRM is. If you can say yes to that question, I bet you are thinking “very expensive IT system”. Wrong!

CRM stands for Customer Relationship Management. It is your business’ way of keeping in contact with new and existing customers in order to maintain strong relationships, so they keep buying from you. All IT does is enable that strategy. You don’t necessarily need the IT system, but you do need the CRM strategy.

So what can an effective CRM do?

• Record all customer data including contact and buying history
• Track and measure marketing campaigns
• Create, assign and manage requests made by customers
• Capture your sales pipeline for forecasting purposes
• Act as an appointment making tool
• Be your management tool to review performance across the whole sales function

The list doesn’t end there, but I don’t want to bore you with all the wonderful benefits of CRM as I have a point to make. My point is that as CRM has the potential to deliver a lot, many businesses think that by buying a system then it will. Again, wrong!

Has anyone heard the phrase “Put rubbish in, you will get rubbish out”? Well, it is the same with CRM. You can’t just chuck a load of data in it and expect a stack of sales to spit out. You need to agree what the CRM strategy is for the business and who is responsible for making it happen, which essentially is anyone who touches a customer.

All too often, I am invited in by a client who is complaining that no one is using their CRM system. “We have spent thousands and we still haven’t seen an increase in sales, yet alone a return on our investment! Why?” The answer is simple. They didn’t agree first how they need to communicate with their new and existing customers, before going out to buy one.

In 2003, well-respected ICT analysts Gartner produced a report stating that more than $2 billion had been spent on CRM software that was not being used. A 2007 survey of UK senior executives stated that their biggest challenge was getting staff to use the systems they had installed. Gartner’s current prediction is that the CRM software market will reach $36.5 billion by 2017.

If those figures are any where near correct, then my guess is that many businesses are flushing more than half that spend down the drain. What a frightening waste of money!

So do I think you need to implement CRM in your business? You might be surprised, but the answer has still got to be yes. However, think carefully about what your CRM strategy is before going out to buy a CRM system to enable that strategy.

I started selling in the mid eighties with a CRM strategy supported by an A4 diary, a map of Lincolnshire and a box of 6” x 4” record cards. Coupled with an effective CRM strategy these simple tools helped me to communicate so successfully with my clients, that within six months I had saved the deposit for my first home. I put all my success over the years down to delivering an effective CRM strategy, which has been enabled by either the simplest of systems right up to solutions costing millions to buy and implement.

The secret to successfully benefiting from Customer Relationship Management is getting the strategy right first, before you get your wallet out.

Lincolnshire-bred business woman Susan Marot runs Marot Associates Ltd, which helps businesses sell more by improving their sales process. Susan works with them to design, improve or even deliver the sales the company needs. A sales person for almost 30 years, Susan is often engaged to speak at events on selling and has regular articles published by the Institute of Sales and Marketing Management in "Winning Edge".