Reviewing & Modifying Sales Compensation Techniques to Reflect COVID-19 Impact Create Engagement and Loyalty In Your Sales Team
— This memo is part of a series of articles and perspectives prepared by Accel-KKR in relations to COVID-19 impacts. —
Managing a sales organization well in this period of uncertainty can maintain engagement and increase retention with high performing salespeople. Importantly, compensation incentive strategies can drive near term behavior to accelerate recovery. The best incentive structures for sales teams 1) create natural behavior to benefit your business 2) align with the way your clients buy, 3) appropriately reward for results and effort that benefit your company, and 4) retain top sales performers.
Things to Consider:
- Adapting current incentive plans: In a time when the risk of overachievement may be minimal, temporary commission plan changes may be appropriate. Examples include: relaxing commission rates; removing caps or floors; quota relief and supporting those new to sales roles.
- CQ/CQ+1 SPIFFs: SPIFFs most commonly are reflected as kicker commission percentages but may also be reflected as discrete amounts. SPIFFs are paid out per traditional commissions payment practices. Guidelines for eligibility should be clearly communicated to the sales team including timeline for start/end, qualifying activity or results, and any exclusions. Examples include: rewards for front-load quarterly execution; early renewals; or cash collection.
- CQ/CQ+1 bonus: Often organizations retain some budget for bonuses based on MBO attainment which may be challenging to achieve. The following strategies could help consider re-deploying bonus dollars. Examples include: pipeline growth; customer satisfaction surveys; customer value; customer relationship review.
- Non-monetary / Nominal incentives: Non-monetary or nominal incentives appeal to sales interest in public recognition or token gratitude. Call outs in All Hands discussions, company gear, small gift cards/vouchers, an additional accumulation of PTO, an email of acknowledgement from an exec, and even hand-written notes of thanks boost morale. Example projects include: upskill/self-training programs; CRM hygiene; whitespace analysis; running sales campaigns like webinars.
- Furloughed employees: Furloughing employees as a temporary cost reduction effort is intended to accelerate the company’s recovery by returning experienced employees as markets re-open. For this reason, some organizations emphasize motivation of furloughed sales teams to prevent talent losses when companies resume normal operations.