“Who is your daddy and what does he do?” A famous line uttered by Arnold Schwarzenegger in the movie Kindergarten Cop where is plays an undercover police officer who is stuck working as a substitute teacher. He proceeds to “interview” a bunch of 5-year-olds trying to find out if their father is a likely suspect in the crime he is trying to solve. Although the scene is hilarious, the premise of the question itself is integral to how one would determine sales incentive plan eligibility.
“Who are your salespeople and what do they do?” Not nearly enough companies are asking themselves this very foundational question.
Sales compensation plans are integral to motivating and rewarding employees who contribute directly to a company’s revenue growth. Eligibility for these plans is typically determined by the role and responsibilities of the individual within the sales process. Here, we explore the key characteristics and roles that qualify for a sales compensation plan, focusing on significant customer interaction, persuasive selling, and clear, quantifiable objectives.
Key Characteristics
- Significant Customer Interaction – Employees who spend a considerable amount of time interacting with customers are prime candidates for sales compensation plans. This interaction can occur in various stages of the sales process, from initial contact to post-sale support. Effective communication and relationship-building are essential skills in these roles.
- Persuasive Selling – The ability to persuade customers to purchase a product or service is a critical characteristic. This involves understanding customer needs, presenting the value proposition compellingly, and addressing any objections or concerns. Those who excel in these areas directly influence the company’s revenue and are thus eligible for performance-based compensation.
- Clear, Quantifiable Objectives – Eligibility often hinges on the ability to meet specific, measurable goals. These objectives could include sales targets, revenue generation, customer acquisition, or retention rates. Employees whose performance can be directly measured against these benchmarks are ideal candidates for sales compensation plans.
These three characteristics are at the core of determining plan eligibility, and when we start thinking about the different roles an organization could have, this is where we can start drawing up different types of sales incentive plans based on the job responsibilities and requirements.
Roles In The Sales Process
Prospecting & Lead Generation – Roles involved in creating prospect lists and qualifying leads are crucial in the early stages of the sales process. These individuals identify potential customers and determine their suitability for the company’s products or services. Their compensation may be tied to the number of qualified leads generated or the quality of these leads.
Sales Development Reps (SDRs) – SDRs often bridge the gap between marketing and sales, focusing on engaging potential customers and setting up meetings or demos for the sales team. Their objectives are typically related to the number of successful hand-offs to sales executives or the conversion rate of leads to opportunities.
Sales Executives & Account Managers – These roles are directly responsible for delivering the value proposition to buyers and influencers, negotiating terms, and closing contracts. Their performance is usually measured by the revenue they generate, the number of deals closed, and their ability to meet or exceed sales quotas.
Sales Engineers & Solutions Consultants – These individuals support the sales process by providing technical expertise and helping to tailor the product or service to meet the customer’s needs. Their compensation can be linked to the successful closure of deals where they provided significant input or support.
Customer Success Managers (CSMs) – Post-sale, CSMs play a critical role in training customers, ensuring successful product adoption, and collecting feedback. Their objectives often include customer satisfaction scores, renewal rates, and upsell opportunities. Effective CSMs can drive long-term revenue growth, making them eligible for sales compensation.
Fulfillment and Support Roles – While not traditionally part of the sales team, individuals in fulfillment and support who ensure the timely delivery and implementation of products or services can also be eligible for performance-based incentives. Their objectives might include on-time delivery rates, customer satisfaction during the onboarding process, and the resolution of any post-sale issues.
Summary
Knowing “who are your salespeople and what they do” is a core question every company needs to consider. If you are unable to define the who and what in this situation, it will be just like interviewing a 5-year-old, accountability and ownership will be nearly impossible to pinpoint.
This article is part two of a monthly series on sales compensation planning and is brought to you by Alvarez & Marsal, a Talentfoot Executive Search strategic partner.
