There is no silver bullet when it comes to leading revenue growth. But if I were to nominate the idea "most likely to be considered a silver bullet" in this category, it would be change the sales compensation plan. It is a popular topic, immediately tangible, and can be tracked on a spreadsheet-what more could you ask for, right? Unfortunately, it doesn't work. Here's why changing the sales compensation plan is unlikely to yield great results for you:
Changing the compensation plan will not make your sales people perform better.
It's popular to say that sales people are "coin operated", but they actually aren't driven by financial rewards any more than CEOs, CFOs, lawyers, or anyone else who prioritizes earning money in their career. Contemporary research indicates that financial remuneration is one of a handful of hygiene factors-issues that are most noticeable when they are absent or insufficient-that affect how we feel about our job. Compensation is an enabler more than a motivator.
It's possible that you might get greater commitment from your sales team by trotting out a new compensation plan. That could have an impact if your lack of growth is because they aren't working hard enough. Changing the compensation plan could also be an opportunity to shift focus. Which can certainly help you emphasize a specific product line, product and service combination, or re-allocate effort toward a certain type of customer.
But ultimately, simply changing how you compensate your sales team won't make people better at their jobs, and that's the underlying issue you are trying to address. The answers to fixing your revenue growth problem include:
- Clarify your strategy and drill down on your ideal client profile. Then make sure your sales team knows how to execute on that strategy and prioritizes ideal clients, rather than believing any sale is a good sale.
- Focus your sales team on bringing added value to your clients, beyond the sales transaction.
- Provide consistent developmental coaching (and asking for numbers updates is not coaching).
These ideas may not seem as exciting or tangible as a shiny new compensation plan, but this is the roll-up-your-sleeves hard work of great leaders. Of course it's important to have a compensation plan that supports sales growth goals, and it ought to be very clear and straightforward. But compensation solutions don't fix capability issues. A compensation plan is no substitute for leadership.