Inspiring the right sales behaviors with incentives that matter


“The sales performance management market grew 14%, to $1.099 billion, in 2019.”

                                                 Gartner Magic Quadrant for Sales Performance Management, 2020

There was a time when prospects were completely dependent on their sales representative’s advice and expertise to take the final purchase decision. For the sales team, incentive structures were simple and directly proportional to the number of units sold. With the dawn of the internet/information era, the role of sales reps changed drastically, with a lot of new variables like  external market, competition, internal influences, and trade policies coming into play. The elite and educated consumers present a higher resistance to traditional selling efforts. And, in the last year, with little or no face to face client discussions and longer than average buying cycles, the sales reps’ job became tougher than ever before. In a similar vein, designing a sales incentive mechanism has become tedious and over complicated, leading to  poor sales motivation and even poorer results.

Designing an optimized sales incentive mechanism

“By 2022, 40% of B2B companies with over 100 payees will deploy SPM solutions to reduce hidden incentive compensation overpayments.”                                                                                                                                     Gartner Magic Quadrant for Sales Performance Management, 2020

Sales leaders are always looking for the optimum combination of individual selling, team collaboration, organizational objectives, and growth to design modern incentive plans. Teaming these with the right sales behaviors that overcome competitive pressures and drive enhanced customer experience is again not very easy with rigid incentive plans. Overcompensation is another big challenge in designing such plans. Here are four key aspects of an effective enterprise incentive management and sales planning tool.

  • Quick incentive calculation

This is a key requirement of the incentive management solution as accurate and timely incentive payouts go a long way in boosting seller motivation. Leading tools have the capability to automatically import HR data, ensuring that employees are compensated on time for their respective roles. They also optimize the speed and accuracy of compensation data by automating complex calculations that ingest multiple input data at an individual, divisional and organizational level.

  • Real-time visibility

The incentive solution should provide real time access to sales performance. This empowers both sales leaders and the frontline team to take quicker action and meet organizational objectives. Access to sales performance data and compensation structures also minimizes internal disputes and facilitates the sales leadership to intervene and take corrective action when needed.

  • Scenario planning

Some of the leading incentive management tools in the market allow the modeling of multiple potential compensation structures and assess their effectiveness before rolling them out to the sales team. This enables the study of potential changes and their impact on the plans. Models with different combinations of territory and quota information allow quick modification of compensation plans to drive business priorities at a particular point of time. 

  • Predictive analytics

Integration of intelligence in the incentive management solution can help forecast compensation earnings and quota attainment trends. These, in turn, help allocate budgets and take preventive/precautionary measures in case of not so positive forecasts. Analytics also help sales leaders determine whether the program is giving the desired results, enabling the sales team to achieve their targets, delivering enough returns, etc. Predictive analytics solutions see much higher trust and accountability with the sales team.

Quicker incentives drive sales culture – A case in point

A top telecommunications company was unable to scale up their sales reporting process which took an average of three weeks. Their outdated, manual systems inhibited the free flow of information, increasing call center interactions from . Adopting a simple and efficient incentive management solution allowed real-time visibility into sales and incentive data, bringing down sales reporting time to one week. The system also reduced error in payment margins from >10% to <1%, and enabled quality incentives based on sales tactics. All these highly improved sales morale and enhanced team performance.

Rewarding deserving sales behaviors

Incentive structures should first achieve what they were primarily designed for, that is motivating sales folks to add to the top line, become the successful interface with the client while furthering the organization’s larger business objectives. An optimized incentive solution will ensure a fair compensation and reward deserving employees. The key would be to identify and retrofit one that matches the unique challenges and requirements of an enterprise.  

Sales Forecasting: The crystal ball for sales leaders. Spearheading sales success – The role of forecasting

“The global potential market for copying machines is 5,000, at most.” IBM to Xerox in 1959.

After launching the first copier in 1959, Xerox garnered revenues of over $500 million in five years’ time. It is hard to overstate the importance of an accurate forecast. IBM’s legendary statement to Xerox in the fifties is a case in point.  Sales teams worldwide have relied on market forecasts for a better understanding of the organization’s go-to-market efforts. Although recent world events make forecasting a herculean task for all involved, accurate forecasts are not only a means of generating higher revenue, but they also lend credibility to the forecasting organization/solution in the market.

Sales forecasting data finds value across the enterprise. While the sales function leverages it for revenue generation from new accounts and to maximize cross-sell and up-sell opportunities from key accounts, other functions also find forecasts effective.  Planning of production cycles, setting financial budgets, material purchases, territory planning, channel partner strategies, and many other key enterprise activities rely on accurate forecasts. Let us look at forecasting from the viewpoint of the sales leadership and how a dynamic forecasting tool can support that agenda.

Chief sales and revenue officers bear the primary responsibility of enhancing enterprise profitability and growth. The organization looks up to them to provide direction on when, how and with what to enter new markets, as they strategize on ways and means to achieve corporate objectives. An accurate sales forecast empowers sales leaders in strategic decision-making as they have precise insight into sales numbers vs. market performance.

Simple, predictive and iterative – Three must haves for forecasting success

With increasing complexities of business and technology ecosystems, simplicity is evolving as a key mantra for enterprise leaders. Sales leaders are more than ever on the lookout for forecasting solutions that can enable them to access market and sales insights intuitively without much technical intervention. Tools that don’t require technology expertise in terms of configuration, deployment or operation are highly favored for their ability to give access to insights and allow easy conversion of customer data, while bypassing tedious data preparation processes. Understanding key data drivers simplifies strategic decision making.

Modern forecasting tools that leverage machine learning capabilities have the ability to Such tools enable sales decision makers to evaluate diverse scenarios, using huge volume of data, and drive future outcomes with high accuracy. The sales teams can be made more accountable for sales closures, and sales leaders can better identify potential risks and over-commits. As the volume of data increases with continuous usage, the accuracy of future forecasts improves over time.

Many organizations also look at developing a forecasting model that can be customized to their unique requirement. In such a scenario, an iterative, detailed and expertise-driven approach can be taken with the right tool. Running automatic analysis on huge volumes of data can uncover unseen insights. The sales leadership can then choose the best model for their needs, tie forecasts to territories, quotas or incentives, and analyze trends over time, regions, teams, or products. The iterative nature of the forecast ensures continuous learning as the forecast capability evolves over time to deliver further enhanced insights.

A success story

A top global software and cloud computing company was facing several sales constraints – unoptimized territory planning, high cost of sales operations and random budgets that were not aligned to revenue targets. Implementing a dynamic sales forecasting solution, the software giant was able to bring down sales coverage across 1,000 territories by 40 days, with granular insights into sales regions and sub-regions. Dynamic scenario planning enabled faster closures on sales quotas.

Future forecast

Sales forecasting enables the creation of a realistic picture of what to expect in the immediate future, not having an optimum model for the same can prove to be costly for businesses. However, with the surplus of tools available in the market it is not easy to select the one most relevant for the business and its unique requirements. Data driven sales forecasting tools can deliver better outcomes, empowering the sales team to provide accurate deal commits and closures.

The insights approach to sales planning success

“The power of selling is moving away from the individual and toward the machine – machines that can now prospect, follow up, present, and propose without human intervention.”

Victor Antonio, bestselling author, sales trainer and motivational trainer

AI powered sales planning

As artificial intelligence (AI) infiltrates into every aspect of modern life, leading organizations are quick to adopt this disruptive technology to influence key elements of their sales planning and strategy. An enterprise sales function typically pursues three key avenues for achieving set revenue targets:

  1. Acquiring new logos that translate to selling more products or driving higher margins in new accounts
  2. Expanding to new markets with the launch of a new product, or launching an existing product in a geographically different market
  3. Retaining key accounts and minimizing customer churn through active renewals, cross-sell and up-sell efforts

AI intervention can impact each of these three key areas transforming not only how customers buy products and services, but also how organizations can better control the sales outcome. Predictive sales planning tools blend the known attributes of the account or customer such as company, industry, purchase history, spend, usage, adoption, and so on, with unknown factors of growth, partnerships, hiring trends, tech stacks, install base, solution intent, etc., to provide deeper insights. Let us look at some of the key traits of such a solution:

Account segmentation and lead scoring

Sales teams often make the mistake of scoring leads based on inadequately interpreted buyer signals and gut impulse, which totally defeats the purpose of lead scoring and account segmentation. AI empowers businesses to enhance their segmentation and scoring activities by simply augmenting internal data with predictive attributes on profile fit and buyer intent. Thus, businesses are in a position to accurately determine the outcome of sales opportunities, and focus their time on the more lucrative leads and accounts.

Sales territory planning

Sales territories have a big impact on the performance of the sales organization. A good understanding of the sales potential of different regions is vital for sales success. Equally important is ensuring a fair distribution of territory among the organization’s sales representatives. This provides every rep an impartial opportunity to achieve their quota. Predictive insights in territory planning can help alleviate these challenges and improve morale and performance of the sales team. Leveraging AI, territories can be carved across the multiple dimensions of geography, industry, product, key account, etc. This ensures a balanced approach to territory planning based on historical data and total market size.

Balanced quota planning

Setting sales quota is a tough balancing act for sales leadership, as it is directly tied to the sales professional’s compensation, morale and overall growth. Incorrect quota planning might impact all the three, set the salesperson on a downward spiral and also hit revenue targets. Intelligent quota allocation leverages predictive insights that empower sales leaders to design effective quota planning; setting achievable targets and quotas and in turn motivating sales people to achieve revenue goals.

Sales capacity planning

Sales leaders are always looking for ways and means to maximize revenue. An oft overlooked and underutilized approach is that of capacity planning. Knowing which roles to hire, when to hire and determining the optimum sales capacity to achieve organizational outcomes are critical components of successful planning. An ideal capacity planning model can enable sales leaders with deep insights into strategies for enhanced sales coverage, capacity and gaps across channels and help improve sales productivity.

Kick start sales with the right planning

These are just a few key areas to start with. Adaptive and intelligent sales planning solutions can enable myriad perspectives with sales KPIs and analytics, sales coverage, objectives management, pipeline optimization, and a lot more. Leveraging data as a strategic asset across the organization, such solutions can create better, faster and stronger frontline sales with collaborative planning, accurate forecasting and enhanced sales potential.