Take a look at your incentives for sales professionals. Are sales incentives e-commerce ready? Are they sales-channel agile? Are incentives helping this critical talent pool deliver the sales bacon?
Most sales incentives were conceived in the days of Willy Loman and the Fuller Brush Man selling door to door – before e-commerce became a giant selling channel. How do your incentives meet the needs of the multiple selling channels used today? What’s your sales incentive e-commerce quotient, or e-CQ?
Here are some key issues to consider:
• Who should receive rewards or incentives for sales made through the Web? The sales professional? The Webmaster?
• Whose customers are those who come through the Web? The sales professional’s? The Webmaster’s?
• What is the role of the Web in making sales? Is it somewhere to place orders sold by sales professionals? Is the Web a sales tool that competes with your sales professionals as it persuades your customers to buy?
• Does Web marketing influence how sales incentives should be designed? Or can you just ignore e-commerce from an incentives and rewards standpoint?
These are important issues to consider. It is all about maximizing selling power from all possible selling sources.
Here are some ways to diagnose your sales incentive e-CQ:
• What’s the job of your sales professionals? How do they influence customer buying? Do they sell face to face only? Through all channels? Only through some channels? Do they influence e-commerce buying? If so, how?
• What is each selling channel expected to produce? What are the needed outcomes of each selling channel to sell products and services? Do they differ from channel to channel?
• Are you getting what you want? What sort of behaviors and outcomes do your sales incentives reward?
• Are people in one channel paid to help sales through other channels? Is a sale a sale no matter where it comes from? How do people collaborate to maximize sales?
Companies with multiple selling channels often need more than one person to complete a sale. These days, the sales professional plays a more sustained customer role with more responsibility for ensuring that the sale is actually completed. But this may mean incentives are needed for others helping to make the sale a reality – e-commerce professionals, distribution personnel, catalog representatives and others necessary to complete the sales transaction. Does your business deploy incentives for all those responsible for convincing the customer to buy?
If it is time to address sales incentives, here are some suggestions about what to look for:
• How are sales made, and who makes them? You should pay incentives to those who are responsible for closing the sale. Pay where the customer is influenced to buy. The more sales professionals who are responsible for convincing customers to buy, the more important incentives are.
• Should you pay sales professionals for sales made in all channels? You must decide whether e-commerce is a “self-service” sale without convincing from the sales force, or whether the sales professional must convince the customer and actually get that customer to initiate an order. The sales professional does not receive sales credit for the former, but he does for the latter.
E-commerce has forever changed how people sell and how they should be paid. It affects the role of the sales professional, how goals and selling quotas are set, how the sales force is credited for sales, how credit for new and existing customers is addressed, and what the relationship is between parties such as the sales professional and the Webmaster in making the sale a reality.
Here’s a quick example – extreme, but it makes the point. A multichannel enterprise sells by e-commerce and telemarketing. Both had sales incentives for salespeople, who were paid for personal sales. The channels competed for customers and sales. But the selling strategy was for each to help the other deliver sales. The dueling incentive plans caused customer confusion and “Buy from me, I’ll discount most” communications to customers. It created pricing pressure and “siloing” of the selling efforts.
The solution was easy to see but hard to implement. The selling organizations were joined very high up in the enterprise. Each leadership team wanted its own incentives. Until new leadership at the top integrated the channel selling and the incentives, conflict was common – a heavy price to pay for ignoring the potential power of aligned sales incentives.
How’s your incentive e-CQ? Here are a few tips to make sure it’s e-commerce compatible:
• Pay where the decision to buy is made. Who actually makes the sale and overpowers customer resistance? Who persuades the customer to buy? Where is the buying decision made? If this is not where sales incentives are paid, they need a hard look because sales incentives pay for persuasion.
• Pay based on how selling channels work to get sales. Are channels independent or interdependent? How sales incentives are paid and to whom should follow the selling process. If they don’t, this may be a symptom of the need for a critical evaluation.
• Spend incentive dollars where sales dollars are generated. Do incentive payments follow how total sales are shared among selling channels? For many companies, e-commerce selling channels have become equally important as or more important than other channels in convincing customers to buy. If how people are paid does not come close to this trend, it may be time to “take the temperature” of the sales incentive solution.
Here’s how we suggest that sales leadership take action to ensure that your company is getting the most from sales incentives in an e-selling environment:
• The Web is a delivery system for sales. If your company only delivers the already-sold goods through the Web, then the sales incentive should go to the sales professional who closed the deal. This will ensure that sales professionals use e-commerce as a supplement to effective sales.
• The Web is a “self-service” agent, and customers are not persuaded to buy from the company elsewhere. In this case, the sales professional probably will not get sales incentives based on Web sales volume. The Web is just another selling tool and is not related to what the sales professional sells.
• The Web sells the product or service, but the sales force gets customers to tune in to the e-commerce sales pitch. Here we have a Web/sales professional partnership. Clearly, sales incentives need to be geared so that unless customers get on the Web, your site will not have a chance to close the deals.
• Things are changing – including the balance between the Web doing the convincing and the sales professional doing it alone. It is important that the current sales incentive not become an entitlement to the sales force. It must be understood that if e-commerce is doing more and more deal closing, sales incentives will need to adapt.
• The sales professionals “object to Web selling.” Care needs to be shown here – sales incentives cannot become an entitlement. So sales leadership must ready the sales force for e-commerce and adjust incentives according to what is creating sales value to the enterprise.
Tapping all your sales channels is critical to sales performance. Sales incentives are powerful communicators of what behaviors your company expects. Are your sales incentives aligned with your sales business strategy? If not, it may be time to get your selling rewards “selling-channel educated” and to increase the e-CQ before you find you are spending your sales incentive dollars on the wrong channels.
