For companies that sell indirectly, mitigating risk in today’s environment is a key concern. One way organizations can do this is to ensure that company resources are only being invested in the right channel partners who exhibit long-term, relationship, and growth-focused behaviors.

But how do you properly incent these behaviors and determine who the right partners are to reward?

Companies often evaluate partner performance by simply measuring volume-based metrics. But as popular as this approach may be, it fails to capture how the partner is producing business and ultimately fails to provide insight on the nature of the relationship with that partner. As a result, companies may find themselves wasting resources on channel partners that do not warrant them. Read More »

(This post was written by Aditya Sikand, an Analyst with our broader Sales, Marketing, and Communications research team.)

The biggest hurdle to serving any global opportunity is getting reps from different business units (BUs) or geographies to work together.

Problems can arise at both ends of the spectrum.  The BU or rep that receives the lead often finds the opportunity under-qualified, requiring extensive time and energy to determine its viability.  On the other hand, the BU or rep sending the lead has little reason to provide ongoing deal support, as they’re not incented for their efforts.

The end result? Reps and BUs routinely prioritize regional opportunities over global, multi-divisional opportunities.

That doesn’t always have to be the case though. Dimension Data took a different approach to team selling on global opportunities – one that shifts reps’ focus from strictly lead volume to lead quality and support. Read More »

If you’re the crème de la crème of your sales organization, chances are you’d qualify for your company’s President’s Club (or Chairman’s Club, or Achiever’s Club).  Yes, it’s the one—and perhaps only—time when the rest of the organization wants to be in your shoes.

Want to know what perks other companies include?  Among other things, our recent benchmarking survey on President’s Clubs identified the top destinations and gifts companies select for President’s Club winners. 

Check them out: Read More »

Show of hands… How many of you see your good channel partners (you know, those who achieve certification and continually invest in your partnership) receive the same rewards as your not-so-hot channel partners (those who never complete training and constantly strain your supply chain with inaccurate forecasts)?

As much time and effort as companies spend on selecting the right channel partners, few have managed to establish a performance measurement and incentive process that actually reinforces desired channel partner behaviors.

Why is this?

Well, chances are, what you ideally want out of your channel partners is directly at odds with what your channel partners want from you. So then, how do you actually motivate channel partners to act in accordance with your – the supplier’s – strategy?

Companies often make the mistake of evaluating partners’ performance using primarily volume-based metrics. While simple to track, these metrics do not provide much insight into the quality and profitability of deals closed or partners’ dedication to your company.

Instead, performance measurement programs should incorporate both volume- and behavior-focused metrics so that you can track how partners are producing business, not just how much.

You should aim to have objective, uniform metrics that measure the performance of both yourselves and your channel partners against the strategies and plans you both previously agreed upon. Both suppliers and partners need to clearly understand the other side’s expectations of their performance.   Read More »

By Andrew Kent

The Major League Baseball All-Star Game is upon us, which means my Fantasy Baseball team gets a few days off—and my mouse-clicking finger gets some much-needed rest.  Turns out, this wonkish fantasy “sport” has a lot to teach us about compensating a sales force.

For the uninitiated, the goal of Fantasy Baseball is to assemble a team of players that will maximize performance across a range of statistics.  Traditionally, Fantasy Baseball leagues track five key statistics each for batters and pitchers. 

But some fantasy league managers like to achieve a more granular view of a player’s performance.  Just check out this league I’m in this year – it tracks 12 stats per player:

Now somebody please tell me: with all those statistical categories and numbers on the screen, how am I supposed to decide how valuable a player is to my team?  Maybe a player gets a lot of RBIs, runs, and home runs, but how many doubles and triples should I sacrifice?  It’s overwhelming—and in fact, research suggests that our brains cannot process more than 3-5 variables when making a decision.

But while the Fantasy Baseball example seems obvious, many of us do the same thing to our sales reps with overly complicated compensation plans.  In the same way that measuring baseball players on too many statistics cripples my fantasy team decision-making ability, including too many metrics in the comp plan makes it impossible for reps to figure out what they’re being paid to do.    Read More »

By Andrew Kent

Sales leaders often assume that a detailed compensation plan can optimize “coin-operated” rep behavior.  This, however, is the wrong way to think about sales comp.

Simply put, there is no such thing as a perfect comp plan—no matter which structure you go with or how much analytical rigor you put into your plan design, you’re going to incent some undesirable behaviors and upset a portion of the sales force. 

When you over-think comp plan design, moreover, you’re overestimating the rationality of human behavior and your ability to control it.  Human beings are unpredictable creatures, and incentives are as likely to distort behavior in ways you don’t intend as they are to influence behavior in the right direction.

In other words, compensation is about psychology, not economics.   

With that in mind, we’ve developed a list of 20 principles of sales compensation we’ve dubbed “The Truth about Sales Compensation.” Here are two of my favorites from the list:

Principle #2: Compensation cannot do everything.

Sales leaders tend to over-rely on compensation as a management tool, when other levers would more effectively solve the root causes of problems.     Read More »

We all know by now that Sales can learn a lot from the field of psychology, but it is worthwhile from time-to-time to have a refresher on some of the more surprising findings coming out of university psych departments.

Here I’ve summarized a few such findings particularly relevant for Sales. A word of warning: it wouldn’t be a psych study if the findings weren’t a bit quirky!

Finding #1: Customers are more likely to say “yes” if you give them coffee and speak into their right ear

• Explanation: An Australian study finds that consuming even a moderate amount of caffeine makes individuals “more likely to agree with persuasive arguments.” Additional research conducted in Italian discotheques finds that people are twice as likely to give a stranger a cigarette if the request is made into the right rather than the left ear (which allows the request to be processed via the “preferred,” left hemisphere of the brain).
• Implication for Sales: Train your reps to suggest a refill and to choose their chair carefully before sitting down at the negotiation table. Then have them use our Controlled Negotiation Roadmap to seal the deal.

Finding #2: People spend most of their time in meetings sharing information everyone already knows         Read More »