Reinventing Sales: Outbound Selling, Incentive Compensation, Tech Innovations & Why You Should Care

But some organizations do this is they look at the amount they're spending on sales compensation. So this is the message that they're sending. Here's this pot of gold that we're giving over to you. And then they're not really thinking about how they're delivering that message. So it's, you know, they're handing over these gold coins in a plastic bag.

Welcome to the Rethink Sales podcast. I'm your host, Michelle Seeger. And today we have with us an expert in sales performance management technologies, Edward Moss, who works with open Symmetry. Edward is a consultant who works with companies across industries globally to help them determine the right technology to support their needs and to optimize the value they receive out of their sales performance technology once an investment has been made. Today we're going to have a great conversation with Edward about the continuously sales landscape and the interaction between buyers and sellers. We'll also talk about sales performance management systems and how they can really enable the CRO to make the right purchasing decision to support their business and their needs. And we would be remiss if we did not discuss the impact that AI is having on in improving the outcomes that are possible to provide performance visibility and support from leadership to frontline sales. Edward, thank you so much for being here with us today.

My pleasure.

I'm really glad. I know that we've been looking forward to this time. It's taken us a while and I just thought, you know, I want to just explore something with you and which is you live over in the UK I think outside of London proper, I believe. But could you talk to people a little bit about your work and where it brings you? Because I find that your travels bring you interesting places and your work is, is really interesting as well.

Absolutely. So you've been fooled slightly by my thick British accent, Michelle. I actually live, live in Rotterdam these days, so I look after clients in the whole of Europe, Middle east and Africa. So largely in the UK though there are a couple in the Netherlands and a couple in South Africa and a couple in the Middle east as well. So that's where I'm traveling these days.

So tell me something about the climate in some of these countries right now, if you wouldn't mind. So I'm just thinking about, you know, the, the economic outlook, how people are feeling in the post pandemic, but yet with some lingering effects. Are you finding that there's any regional nuances or what people are thinking about or concerned about these days?

I think that's a very interesting question. I Think in general I've noticed slightly more risk averse behavior. I think there's obviously local geopolitical issues that play into that. I think South Africa obviously has had some challenges in the last couple of years and that's naturally affecting the business environment there as well. I think in Europe we're rebounding from the pandemic. Well and I think you know, the new, the new challenge is really is the, the norm of hybrid working instead of everyone being in the office all the time.

Okay. So that leads into the really interesting conversation that you and I had and that we want to explore which is how the sales landscape is changing. You just mentioned and I want to get a little bit deeper into the hybrid work world. But things have changed. We forced people basically we asked them right to work remotely for 18 months or so. And there's this slow coming back into an office environment when I think about business to business, sales or just people in general. Right. And you know, my prediction is we're going to end up with a three day work week in office, you know, normal working but, but probably three days in. That's just my bet. I could be wrong. Ask me a year from now. But I was really wondering about, you know and want to talk to you about how the impact of the pandemic and technology and you know that the fast evolution we're quickly upon the, what we're calling the fourth industrial revolution, how that's impacting the sales landscape and you, that's where you live. So I'd love to hear what your perspective is and what you're hearing out there.

That's an interesting perspective. I think if, if we look at the coming back to the office, I think three days a week is probably going to be the happy medium that most people want. It allows them to receive parcels at home, look after kids a couple of days a week, but also getting that, that community vibe which quite a lot of us actually want from a workplace. We want to strive together with like minded individuals to achieve a goal. Doing that together in person just somehow feels a lot better than doing that on a video call with someone. So maybe next time I have to take the plane over, but I think that's probably here to stay. I think there's obviously been big backlashes when companies have tried to force people back into the office all the time. I think that will changed by different businesses where we'll require people to be in the office more. And I think it has perhaps opened up a big bit of a cleft between jobs where you can work remotely and jobs where you can't work remotely, that wasn't there before and that wasn't the expectation. So I think in the long term that will probably settle out and people will be able to choose to go into careers and professions where hybrid working is a possibility if that's something that is important to them. But in the short, short term, I think that is going to cause some issues where some jobs that really need to be on site, these individuals are going to be really hard done by that they're not getting that additional perk that so many of us have enjoyed over the, over the last couple of years.

Yeah, it's certainly been so interesting to me that the big conversation with businesses where people are going to work from the employee and the employer standpoint and you know, more and more I am starting to see at the C level where they're starting to come around to discussing the rationale really. And I think that employees, many of them anyway, are understanding that as well. I mean, from our perspective, I can say that there is definitely, you can call it magic, but it's the natural human interaction that just seems to spark more creativity and you know, which is important in our work when we're identifying solutions. So yeah, it'll be interesting to see what happens. But we think also. I don't know what you've seen, Edward, but there's a certain sharpness that you have too when you're interacting with others. And that tends to go a little bit to the wayside if you're strictly working from home. And I'm actually speaking from the perspective of being a consultant and how I interact with leaders. I actually had someone say to me recently, it's kind of odd. I got out of practice and I didn't even realize it when you're on video versus in person.

Yeah, that's. That's really interesting. I think we are at least I'm certainly do my best thinking in conversation and if I'm at home, those little conversations and those collision of ideas with people doing slightly different things doesn't exist in the same way. So I think, yeah, there's certainly something from a creativity point which I think is lost when people work remotely for a long time. But I think sharpness is a really interesting one. Is not something I've contemplated a lot on. But I can certainly see how having that potentially it's a delay in feedback that you get when you're communicating over message instead of communicating face to face leads to a lack of sharpness. Really interesting perspective.

So let's talk about what you're seeing and how buyers and salespeople are engaging. So how is the expectation of the buyer changing and what does that really mean for a sales organization and for the individual salesperson?

So the expectation of meeting face to face is not always there. Quite often buyers organizations are dispersed as well. So most of the work we do at Open Symmetry is software implementation. So that is historically something that we would like to do on site, have face to face, really make sure we're understanding what's going on. But the buyer expectation now is that happens remotely. So that's something that we're really pushing forward to try and get back on site because we do believe, as you say, there are benefits to being on site and having those discussions face to face. And I think perhaps a lot of that is confirming understanding. But I think also from a seller angle, one of the things that we have seen is almost counterintuitively the requests to meet up seem to have not as part of a project, but to as part of user groups where you're creating the sense of community have been more successful. So bringing people together. In London, we've had some really successful user groups bringing people together, which I'm not sure would have been such a success before the pandemic. And I think part of that is. Yeah, and I think part of that is because people have more control over their own calendars. And I think that's the other thing that perhaps is sometimes missed is not just a home at office, but I think it's also control over the calendars, which has changed a little bit as well. And that's moved more over to the individuals. So these events where they can they really see value in, which might be face to face, they are turning up much more readily to. So I think, I think that's certainly something we're seeing from, from our side there.

So I know that you work with sales organizations of different sizes across the world, across the globe. And you know, one of the things that we had discussed, we were already pre pandemic looking at the sales shifting from transactional to more of a solution sale. We already know with the evolution of technology that information is in the hand of the buyer, more so control of the buyer. And what I'm really thinking about in this hybrid world is what do you believe and what are you hearing is required out of salespeople, you know, in how they work with their buyers. That may be different or maybe something that was aspirational, but it's really become more like table stakes or requirements Today.

I think you're absolutely right to say that buyers are more informed before ever getting in contact with a salesperson. And I think that what that does is it raises the bar for what a salesperson needs to bring to the conversation in terms of value. And I think something we have seen is that, that makes outbound sales much more tricky. So outbound sales really has to be well equipped with really top notch marketing to be successful or there has to be a social sort of presence behind it to have some success there. So I think that's one thing we've seen is that that value that the salesperson has to bring has, has increased. And with that the seller has to, has to work out how they're going to be able to provide that. So it's not just knowing the high level information of what their product does and being that arbiter of the information, it's actually perhaps getting more, getting more technical, more understanding of the actual product they're selling or using their internal teams earlier in the sales cycle than perhaps they would have done previously. I think perhaps the other challenge there is, you know, building, building trust requires time and multiple contact points. And I think that now more information is gathered up front by the, by the potential buyer. But it means that there are less of these contact points that, that happen during a sales side. And that can mean that from a sales side it feels like sometimes sales perhaps are getting more transactional than they would be otherwise.

One of the things that I thought was really interesting and one of the points that you've discussed with me is this whole thing around, you know, client satisfaction shifting towards, I call it more experiential. So you were talking about, you know, it creates this challenge for marketing. Brochures just aren't going to cut it anymore on that type of information. But demos, trials, things like that can be a good differentiator. So can you talk to us a little bit about that?

Absolutely. Yeah. I think you're absolutely right. There's gotta, and I think this really plays on this, this loss aversion effect and trying to get the potential buyer to believe that they have this thing. Because if once they have this thing to say, well, you only have it if you buy it, then it makes them much more likely to buy it. I think, you know, the classic example that's been around for years is the impact of test drives on buying a car. If you, if you test drive the car, you are a lot more likely to buy the car. And you know, a lot of that comes through the fact that okay, perhaps you were more serious about buying the car if you took it for a test drive. But still, having taken that into account, it seems to be a lot of it is actually you can imagine now what it's like to have that car and then if you don't buy that car, you don't have it and there's this, this, this feeling of loss which is so much more powerful than not doing it. So I think you're absolutely right. More experience creates that experience, makes people feel like they have it, like they can't lose it. And the ways to do that are exactly as you say, interactive content, videos. If you're not comfortable with interactive content, you know, obviously there are some risks with interactive contact. You know, I come from a software world and even the most user friendly software, the first time you use it, there'll be teething pains where you think, where do I click this? Where do I click this? And that's perhaps not the experience you want to give a buyer on their own. And still, you know, that needs to be some kind of accompaniment there to help them through that process. But yeah, I think you're absolutely right that that's a trend we're seeing.

You know, one of the things that when I think about the go to market and changing go to market, I was really interested to ask you about this. We are starting to see clients shifting how they segment and go to market. So traditionally where you may have a product focus or product and service focus and you're aligning your teams to that, which I still believe that's a good, that's a good way to go. Right? Because some people are, you know, when, when you've got focus on products and services, you're not having to worry about, you know, 600 SKUs, it's a whole lot easier. But what we're starting to see is, I'll call it industry verticalization focus. And what we're starting to see is that clients are exploring and trying to understand in the B2B sales world. So Ni would imagine B2C as well as different client types, customer end user customer types, but different business types. We're starting to see, let's bring up, you know, health care versus food services, right. Or manufacturing. We're starting to see them exploring, putting together even teams of people that have different product focus that can service that particular industry. Whereas traditionally it was more of, you know, a, a product go to market focus. And so I don't know if you're starting to see any industry specialization, but you know, and I Think there's pros and cons to that as well too, when we think about just the sales structure and rules of engagement. But I'd love to hear, you know, what you're seeing out there and what your thought is.

I think it's a really interesting one. I think the. I think a key thing to bring into conversation here is reputation and customer satisfaction that we touched on earlier. I think there is a risk when you have a successful product in one industry, bringing it into a different industry, because historically, when perhaps less information was available publicly, it didn't. It wasn't such a risk because people in this industry weren't aware of what's happening in. In the other industry. But now that quite a lot of reviews are online, going into a new industry can be. Is not just risking, am I going to be successful in this new industry? It also risks the other industry you're already part of because of those online reviews and the enhanced power of reputation. So I think we will see products focus more on specific industries where they think they can really provide the most value. And if they are going into different industries, some kind of separation of brand to some extent to reduce that potential risk.

So one of the other things, and then I want to talk about the work force, workplace evolution. One of the other things that, you know, I would be interested in hearing your take on is Omnichannel. When we think about B2B sales, right? So in B2C omnichannel, and, you know, it's now mainstream, right? People are buying any way that they wish. I am. I'm doing a lot of my holiday shopping that I know that I can. It's. For me, it's now just what I do. It's not even a learning anymore. I'm choosing some online, I'm choosing some to go into a retail store. In the B2B sales, where do you see Omnichannel playing right now? I know that sales leaders were thinking about, you know, we need to have more of a B2C experience in the B2B sales world. So what are you hearing or seeing out there that may substantiate or not that belief?

I think that's a really interesting hypothesis. I would ask, how do you think that when you're interacting with businesses as a customer, how are you finding the Omni Channel experience? How are you finding that?

So what we're finding is that they're struggling with how to pay for online sales, because it depends, right? So in our retail channel, you know, you can see where that plays out. Really well, where a client may go into. I'll bring up a really easy example of a sale that could happen at 1am I go into a mattress store and maybe three or four times and you know, but I order that mattress online and I'm yet I've been in that store a few times. And so what we've been focused on is in retail omnichannel, which we believe is table stakes, don't create friction for your client. But how do you take friction out of the sale? And we have our own ways of dealing with, of recommending what companies can do. So when I say friction, I know that some retail chains have with inside sales because they're listening to calls, they're really encouraging people to make that sale right there and in the store. They're giving people cards and coupons and numbers so that they get credit. Now that's a burden that you've now put on your buyer that we say don't put it on the buyer. So what we ask them to consider is let's look at all the sale, the sales opportunities in the market, pay for them all. You're just going to pay a different rate than if you're just paying that who walks into the store, if that makes sense. So you can still manage your cost of sales, but people are still getting credit for the sale no matter where it takes place. So you arguably what your belief, the belief is in that hypothesis is that salespeople will get, you know, more sales credit, if you will, which is why you may change your rate slightly because you've got sales that are coming in through multiple channels. Potentially in the B2B world, what we're doing is we are trying, we are working with clients to help them build an experience on their website. And you know, some have portals for, for clients that are actually existing clients that make it a little, you know, more of an experience to the point that you made earlier. And they are giving credit to the appropriate sales role who's responsible for that particular type of product or service. And so as a result, where renewal business that you know, is deemed as being sometimes it's evergreen, sometimes meaning that it just goes on and on until in a lot of subscriptions they don't expire or it's deemed that the salesperson is not needed in the sale, we're seeing less or no credit towards those sales because we are seeing them give credit across multiple mediums, if you will, of the sales channels, you know, across sales channels, I should say. So that's kind of what we're seeing, you know, there's no solid answer. What we're hearing is that they want to provide a seamless experience that doesn't become trouble for the buyer to have to navigate through.

I, yeah, I think you're right about that and I think obviously that the cost of that, if there is one of removing, you know, why people are trying to introduce this friction is they're trying to justify and being able to show the value that they're providing by being in store. And so we're able to make decisions. So there's, there's certainly a trade off there. But I think you're absolutely right. As soon as you introduce more friction, you're reducing total sales. So is that something you really want to do? I think in the, in the business, to business world, I think that is less, less common. I think, I think, you know, there are people still like to have a single point of contact and I think that's really useful and I think perhaps that's, that's more what someone who takes overall responsibility for that account and I think that's what we'll continue to see.

So now as we keep talking about the workplace evolution, I want to think about, you know, some of the concerns, right. And about the hybrid workforce. And one is like, well, do we, we believe we have a loss of productivity? Do we really know how people are performing, forming? I'm kind of on, I want to ask you about, you know, the pressure that's on leaders to have like this real time performance visibility and what are some things that they may be doing and then, you know, how are people continuing to develop their teams as well?

So I think managing a team remotely is very different to managing it in person. I think the amount of feedback and amount of, I guess data that you collect as an individual on the other person is a lot less. When you're sitting next to each other in an office, there's lots of subtle things that you can pick up in a way that you can't if you're managing them remotely. So are they at their desk for at the allotted time? You know, simple things? Are they, are they talking with the right manner on the phone? Are they taking their work seriously? And I think with managing remotely there's, there's, there's this idea of quiet quitting which I think we've seen some fairly troubling statistics on in the last couple of years. I don't know how overblown those are, but it's certainly something that couldn't really happen when people were working in an office because it's pretty obvious when, if, if someone's not working and they're supposed to be there, it's very easy to tell. I think what you sometimes see when people start to check out now is that those days that they're in the office, it used to be three, it's now one. And they quietly turn up less and less to the office because they're embarrassed about the fact that they're quietly quitting. So I think that's something that managers need to take into account. I think also the sense of community is no longer a given. I think one of the reasons that people work for companies is that they like working with other people side to side. And if you're remote, that's. You've got to work harder to achieve that same effect or you're going to have to start worrying about how long someone's going to stick around. I think if we look at hybrid working as well, in terms of the amount that you're tied to a specific location, I'm not very tied to a location. I don't have to be in Rotterdam. I could work in Utrecht, I could work in any other city in the Netherlands because I don't have to go into the office very often. And that is both a blessing and a curse for management. It means that for new roles, potentially there's a larger pool of applicants you can look at, but it also means for people that you've got in your role that it may be easier for them to move on and go elsewhere. So I think that, yeah, there's certainly a lot to be said for. There's a lot of changes that have happened with managing people remotely. And I think it'll be really interesting to see how that shakes out, particularly in terms of a retention point of view over the next couple of years.

What about culture? How do you. And again, I'm thinking about in your role, working with sales organization and beyond, you're working with technical teams, I realize, but how do we drive to culture? And let's say, I want, you know, I'm a sales leader and we're hearing more and more about driving to a sales culture, sales orientation. And, you know, what's. What's behind that? What's behind that is that we hear a continuous frustration that there's a belief anyway that salespeople are more focused on. Many are more focused on just retaining what they've got. And, you know, but again, that can be communicated in pay plans. You and I both know that we'll talk about pay Plans later shortly. But you know, how do they really drive to that sales culture and how do you keep whatever culture it is that you want in your organization? How do you keep people honest and true to that in a hybrid or remote type of work environment?

So there's a couple of things I think are foundational. I said one of which, which I think is often overlooked, is belief in the thing you're selling. So, or not even the thing you're selling. If you're working as part of a company and you don't believe in what that company is doing then, or why are you there? How are you going to interact with your people in your team? You're not completely there. If you believe in what you're selling. This is a wonderful product. You are actually creating good in the world by selling it. I am solving your problem. I am going to help you. If you're doing well in that space, you can be a, a very trustworthy person. If you're selling well with a product you don't believe in, then there's, there's some people that can do that. And what kind of people are they? They're not trustworthy people. They're psychopaths. So if you have a. What that, that's the honesty of it, right? And so if you have a company where the sales team does not believe in the product that they are selling, then you're going to end up with these individuals that are going to erod trust within your organization. Then you're going to start having processes to try and manage these difficult individuals. And then you've eroded one of his other sort of, sort of building blocks. So I say the first one is actually believe in what you're doing. And then the second one is the trust between the individuals in the sales team, but also within the organization as.

A whole.

To, to sell well. So I guess those are the foundationals. And then if I was put my consultant hat on, I would say, well, current state, future state, and how are you going to get there? And I think if, if we look at current state first, I think it's really interesting for culture because leaders often have a very different view of the world and their company than individuals might have themselves. So one way to get at that is through a survey and the other is walking the floor. There's a couple of really interesting programs, sort of these reality programs where you've got Undercover Millionaire where someone who's run a big business and then they spend a week undercover at their own business so no one knows who they are. And what almost always happens is that they don't really understand what it's like at their business. Sometimes it can be. The culture can be a lot better than they expect and sometimes it can be a lot worse than what they expect. But I, I think that's also a super interesting idea. Sounds unfeasible. The other good example is, is Marks and Spencer's in the UK who all of their management. So 3,800 people spend seven days working in the shops, stacking shelves, scanning people's goods. So they really understand what's going on. So, yeah, first bit really understand what's going on. What's the current state? The second bit is where it gets a bit more interesting is actually what. What are the cultures and behavior, you know, the behaviors that you want to drive for your sales team. And that obviously varies a lot depending on where your business is. But I would argue that, you know, look at where the business strategy is and then come down to behaviors from that. And then you've got. Once you've got your kind of, here's where we are, here's where we want to try and get to. You've got this. How do we try and get there? And there's lots of different ways to try and change behaviors. But I think two ones that stick out to me as really ringing true is an emphasis on management. If you've got, you know, people don't leave bad companies, they leave bad managers. And if you have a good management in place, making sure your managers are well enabled and you're hiring the right managers to start with, that's really going to help. And the second one is the idea of shocking rules, creating culture. So the idea that if you. So there's a couple of really good examples in history for this. So you've got 2003 English rugby team. The captain said you've got to be five minutes early to every meeting. And if you're not five minutes early, you're late. And then that was enforced. And then it draw. The idea was to drive a sense of professionalism within the team. And for those that don't know, the English rugby team won the World cup in 2003. Other good one, I think, I think George Washington had something. You might know this better than me, Michelle. Was it if. If people weren't three minutes, either three minutes early or three minutes after when they were supposed to arrive, he didn't talk to them. He was very sort of keen on this punctuality thing as well.

He was keen on punctuality as well as a whole lot of other things. Yeah, pretty brilliant, man.

Yeah, absolutely. So, yeah, I guess those are the way I would think about it.

And you know, very interesting.

I think that.

All right, so now I want to talk about incentive compensation. And this is pretty interesting for me, really juicy topic because we consult with companies on incentive compensation plans. You work to automate the administration of them. So we both know a lot about plans and how they should work. First thing I just want to do is level set a little bit, Edward, about what an incentive compensation plan is and really what it's not because we surprisingly will go into many clients to design an incentive plan that we basically. It's really not designed as an incentive plan is designed to be. And what that means is, you know, it really doesn't do some of the core things that I'm going to ask you to tell us about. And, and it really doesn't. It's just not what it was intended. So let's first talk about definition of what an incentive compensation plan is. And then I want to get into some of the, the attributes of one.

Okay, so I guess what is an incentive plan? So yeah, there is often a lot of muddying of the wording around incentives and bonuses. So I hope you'll correct me if this isn't the exact definitions you're looking for. So I guess the general way I think of incentives is it is paying is future looking and it is paying for people based on the actions they're doing. Bonuses are typically retrospective on paying on something that has done typically a fixed amount and often sometimes there's a surprise factor. So typically at the end of a year, have we made profit? Therefore here have a bonus. Is that the definitions you want to use, Michelle, or how would you.

I think that's a great definition. I want to think about, you know, like, well, your definition. So when I think about incentive plans, and you said it, they're there to. They can drive an individual or even a team specific behavior. And what we talk about too is that when you look at how, how do you drive behavior? Well, you've got to make sure that people are in control of the, the elements of that plan. So if you earn this, you know, this is what you have to do to, to earn that. So for example, if I'm being paid on, oh, let's say gross margin of a product, but I have no control over price, that just doesn't seem to drive much behavior and align with what you expect me to do. So you know, when we hear about incentive Compensation plans. A lot of times we'll go in and say, well, that that isn't really an incentive plan. And I guess the biggest component that I would say the differentiator is, is that it pays people based on their level of performance. So if I don't perform well, I would expect that, you know, that person would incrementally earn less than someone that is at expected performance to someone who's at high performance. So I wouldn't expect that everyone's kind of treated the same, but that there'd be incremental differences. And anyway, that's kind of, you know, what I don't see a lot of times when we go in and look at plan designs and I guess also some of the things I'd like to dig a little deeper on some best practices. We'll also see something like, I don't know, you want to move to a particular product and service. And what we see is we'll end up looking at plans and there might be 50 ways that someone can get paid. 50 ways to get to your quota. Right. So it's just very interesting to me how there seems to be a little bit of a misunderstanding as to what an incentive compensation plan is. And yet companies do want to utilize it to drive behavior, and it's very powerful when used properly. So, you know, I'd like to get your perspective on what are some like, incentive compensation plan best practices. And, you know, also just what's. What are some things that you've seen that maybe don't drive the right behavior or mistakes that you may have seen out there?

Yeah, I think there is this tension between complexity of the plan and alignment to ultimate profitability. So I think often what happens is you start with a fairly simple focus plan that everyone understands, and then over time, more components and more rules are added to this to make sure that it completely aligns. And there's no possible way that someone can earn a cent that might not be in exactly the right direction for the business, but. And then every five years or so you will have someone says, this has got ridiculous. Let's redesign this. So we've got to focus again. And that's the kind of cycle that, that we might see. I think that is a common problem is a lack of focus. You get metric, you get six metrics. So the salesperson doesn't know what to. What to focus on. I think that that's one we see a lot. And I think if we talk about trends that we're seeing a little bit now, I'd say We're not seeing any cap, very many caps anymore on a, on a commission plan level. And we're starting to see thresholds introduced to quote based plans so that the bottom performers earn virtually no variable compensation.

That's interesting. No caps, but yet and a threshold. We're starting to see that same thing as well. Before we talk about. Well, it could be a good time to talk about some incentive compensation plan good design principles. So you know, we can riff a little bit on this one. I'll tell you a couple of mine. No more than three measures in a plan. Now you give one.

Oh gosh. So that would be for me. I'm trying to think of my. I think the other one would be. Yeah, aligning to business goals. I think that's the main one. And people seems to get missed sometimes.

I'll say alignment to what you. The behaviors that you expect out of that role or the outcomes of that person.

Great. I think I'm going to lose this tennis match. I guess focus on it might be. Well, some of the principles depend on your business. But one of them, for example, might be a focus on cross selling and upselling, which I guess an example of the behavior you're looking to try.

Okay. Simple and easy to understand and communicate. Boom. We won't have to go any further.

Absolutely. Thank you, Michelle.

Okay, so but this is something that you do know a lot about as well, which is commission versus quota based plans. And you know that rate base versus quota, we often get asked about that too. And you know, it's been interesting for me, Edward, we've had some companies that in the pandemic, when or through the pandemic as the ability to forecast and the ability to set quota has been, you know, more with greater volatility than we had seen before. We actually saw some companies just say we're just going back to an old fashioned commission rate based plan. So whether I went back to one or I'm in one today. Let's talk a little bit about why people would have one plan, one type or the other. And then if you want to make a shift, typically they start with these commission plans is what what you and I would would say and then how they would kind of make a shift over to a quota based plan. But you'd really want to know the why behind that as well. But you know, kind of what types of businesses would use a commission or rate based versus quota when we think about best practices.

Well, typically industries, if you're looking to motivate sales and you're really focused on growth then commissions are often the way to go, particularly for small businesses because essentially you want to, you're paying per, per sale and it's a cost of sale based approach. The difficulty with them becomes if you sell a lot then you end up earning a lot. And a finance is not always very happy with that. So it's the quota based plans come in when you want to try and be able to predict the costs a little bit more. And so I think of quota plans as basically sophisticated commission rate plans because all you're doing is saying a quota based plan is you've got a quota, you've got an on target commission and from those you create usually a base commission rate. And what you can see from that sort of is a 3 those points is you've got to have all of those correct. And that allows you a bit of extra flexibility to say, well we're going to pay a slightly less commission rate in this territory and we'll adjust the quota like so and we want to pay this individual more. So therefore we'll increase that OTC and allows you to kind of move those variables around an additional level of sophistication which can be useful for businesses. Obviously the problem comes when quotas are very volatile. As you said with the COVID pandemic, it means that the commissions that people are being paid go all over the place and it can be very difficult to motivate people correctly if you can't set the right quotas.

So if I'm in a commission plan and rate based commission plan, how do you get people, if you want to shift over to a quota based plan to understand it, but then also believe that they still have the opportunity to earn as they did before? I mean, you know what we hear a lot, anytime the plan is changing, the big concern is are they using this to reduce my potential to earn?

Absolutely. And I think there is a halfway house here which is to introduce the idea of a, a soft quota where you have a. Because by introducing that quota and a, you introduced the quota and an on target commission and then. But they're still earning for every cent they make. And essentially you, you, you can see that they can then see that that's effectively the same as a commission rate. So that is often a halfway house before you start doing anything more sophisticated and start playing with that, the graph that you have. So instead of just being a straight line going from 0 to 100% attainment and on target commission and onwards up from that, it, you know, typically it might have a Threshold and then have some accelerators after that. So an intermediary is to have that just have that straight line graph for a period of time before you make the full change.

I think that's really interesting. So and good advice I think for sales leaders. So now I'd like to talk about your another area of expertise for you which is sales performance management technology. And you know, can you just, you know it started out years ago in fact it used to be called ICM back in the day. Incentive compensation management systems. Right. I remember those days and it wasn't that long ago, I don't think. But anyway, the, you know, the whole thing was around automating payments, right. Being able to manage and administer the payments easier instead of compensation payments. But it's kind of evolved and you know, the first question that we're often asked is kind of like what is it and how could it enable me? And I know that what is it Edward, can be pretty broad depending. But can you just give us like, you know, an overview of like what the technology looks like and you know, you can have different levels of technology and what that can look like for an organization.

Absolutely. So sales performance management, you're absolutely right. The history of it is it started with icm. So incentive compensation management, making sure you are paying people correctly. Since then it's evolved in why I would in a similar way to I guess in a solution selling almost style from well, okay, we've got the commissions but you've only solved half my problem here. My other, my other problem is well, how do I set the territory and how do I set the quotas? So you've got these sort of three, I like to think of it as this three legged stool that you've got to have the territories, right, you've got to have the quotas, right. And you've got to have the amount of commission, right. And if any of those legs are wrong, you've not got a good sales incentive system in place. So what these systems do is they help you make sure that you've got each of those legs. Right. And initially yes, they started on the icm and then you know, we were starting to see some sort of shaky legs based in, you know, Excel about how we're going to do all the territories and how we're going to do all the quotas and but that's where they've expanded to over the last five years. So I would say now that sales performance management is not just the icm, it's also those different territory and quota piece and then on top of that, it's also about not just paying people accurately, but actually motivating them by showing them the right information. So that's where Sales performance management's at now.

So if I am a CRO and I'm thinking about, you know, making that shift, we now full disclosure, open symmetry. As a partner of Sales Globe, you know, we have a lot of confidence in the work that you guys do. You come in and really do a great job. You don't have skin in the game in a particular technology. What you want is, is what we want, which is what's the right solution for our clients? If I'm a CRO and I'm like, okay, I gotta do something here, what are just some of the fundamental questions that they should be asking themselves? I'm going to ask you later to kind of give us some resources people can go to. But, you know, if I'm thinking, you know, about how I can have more visibility, perhaps, or I'm just exploring, you know, we need to automate this thing, we get way too many disputes. What are some of the initial things that they should be thinking about as they start that journey?

Absolutely. So I think if they're already asking that question because they've got a good sight of the problem, then that's already a great start. So again, really understanding where you are at the moment is probably quite a tricky perspective if you don't have a system in place, but is a task well worth undergoing because from there you can understand, I'm going to do it again. I'm going to do current state, future state, and then you can evaluate whether it makes sense. But those are the things to start asking yourself is actually, where am I now? Do I have good data to back that up? And then starting to look towards the future state with what do I hope to achieve by implementing this solution? And that might could be, you know, admin savings, that could be sales motivations. And I think perhaps one of the reasons that some organizations do this is they, they look at the amount they're spending on sales compensation. So this is the, the message that they're sending. Here's this pot of gold that we're giving over to you. And then they're not really thinking about how they're delivering that message. So it's, you know, that they're handing over these gold coins in a plastic bag rather than, you know, a nice pot of gold, I guess. But that, that's one of the ways I like to think about it.

That's very interesting. So I want to ask you this. So you also go into a lot of companies that have implemented a system, I've actually called you guys in the past where a client has said to us, we want to take this system out and put in a new one. Right. And many times it's not the system problem. So let's just talk about some of the biggest mistakes that you see. And I think there's probably just a handful when people have implemented a system that hasn't been fully thought through and now they're dealing with the outcome of something that may not align to what they thought the outcome was going to be.

So often it's preparedness for the implementation. I think there's two things that really seem to. I'll mention two, there's potentially three. There's data quality issues. Sometimes these systems actually are the first time that people realize how bad their data is and they realize they've been paying people wrong for a long time. And that's a bit of a sticky situation to be in resolving data quality issues. Although an ICM system or an SPM system can show you look, here's the problems a lot quicker, it can't resolve your underlying data issues. So that's, I say one big problem. I'd say the second one is around change management and future state definition. Particularly if you've got where the, the data is wrong to start with, then it's a very difficult conversation to have with. You know, some of these systems are used for salespeople, some of these are used for external organizations that they're paying to say, well, we're now going to be paying you a different amount. And that's because our data was slightly wrong previously. So that change management piece can be massive. As part of that change management piece, you also need to look about who's going to be running the system after go live and do they have the right governance structure in place and are they enabled to do it properly? So I would say maybe there's two or three points there that I've seen.

I think those are really great things and we have seen this as well. Great things to point out. I guess I would. And I would add one third, which is that we find that companies and you know, it's not, I'm not dinging any of the software providers, but it's not really in their best interest to examine and help them understand the current plan designs. And what we find is that companies are automating plans that are not optimal for their sales roles and the coverage model and the outcomes they expect.

You're absolutely right. You can automate bad plans and then you have efficient bad plans, which I guess is better than previously, but not a lot.

All right, so now I want to think about the possibilities and that AI offers to optimize sales performance management outcomes. So we can talk, you know, we already know about from. It's very interesting to me because you had brought up things like being able to help with dispute resolution, being able to assist with prioritization of your territories and you know, and your accounts. Like what are some of the possibilities? I think we're just starting to see what the possibilities could be. But how you envision either current state, how AI is being leveraged for sales performance management outcomes to optimize them and what might be on the horizon.

Yeah, so I think we're seeing it filter into tools now and I think the key ones are going to be around chatbots. I think they offer a lot of key benefits. They are always available so you don't have to have a team running shifts 24 hours a today. There's always the chatbot there. Although they're a bit annoying at the moment, I think I'm pretty confident that they're going to get better. You know, they're not going to be the Microsoft paperclip. They are going to be a bit more like ChatGPT, which you've also fed in your documentation or your compensation statement to and say, looking at my compensation statement, why am I being paid this for example? And I think that's going to resolve 90, you know, or 90, 95% of queries are going to be handled like that. That's, that's potential, a potential number there. And I think that's going to ease off the workload on administration teams which enables them to be analysts. I think that's probably the short term, the quickest one we will see. I think longer term there's more of a sort of predictive analytics piece coming in which we see for territory optimization already in some companies, perhaps not done as not always done within the sales performance management tool. But if you're looking at really tough optimization problems like what is the, what are the right territories? Given that here are all the locations of my individuals, here are all my locations of a client and that minimizes the amount of driving that all these sales individuals are going to do, then that's a really tough optimization problem and that's the kind of thing that can AI and particularly predictive analytics element is going to be able to help with.

That's really interesting to me. So if you don't mind sharing, I think this would be kind of fun. Are you leveraging AI yourself, personally, in your work, in your life, and, and how might you be? I always like to ask people this question now because it's, it's got so many interesting possibilities.

Absolutely. So I, I'm learning Dutch. I've been living in Rotterdam five years and my, my Dutch is okay, but not as, as good as it should be. And to get instant feedback on my Dutch writing and where I've gone wrong and why there's nothing better than using AI. I think AI is really good for writing tasks in general and anything where there's an example of it being done on the Internet as a whole. Yeah, my, my mum uses it for writing parking complaint letters. But, you know, there's so many potential use cases and I think that's. Yeah, I think that's why there's been so much hype around AI. It's because everyone's been able to use it and get some benefit out of it.

It's really interesting. Okay, I did want to bring up one thing that I meant to bring up around predictive analytics. So traditionally, you know, pre AI, let's call it predictive analytics, all the deal. Right. But, but really hard to execute on. So everyone talked about it, talks about it, but, but, you know, operationalizing it and then the reality of what it would tell you. Can, can you talk to me a little bit about how you see AI being able to facilitate, you know, facilitate predictive analytics and what that looks like?

Yeah, absolutely. So the idea of predictive analytics is it takes some information and it predicts what's going to happen in the. That certainly is something we've seen happening throughout the world in the last four years, but. Or maybe more. But I would say that where it hasn't taken off, where I expected was sales, performance management. And I thought, you know, the data is clean. You know, we're paying people on this data. There's really good questions to ask of the data. So does paying people more get them to perform more? What's the optimal commission scheme? Those are all questions that could be asked of your data, but we haven't seen it, as you said, being used to try and understand what's really going on there. And I think the reasons for that are. But it's often done by different teams. So you have many organizations, big organizations will have data analysis teams who are actually just not looking at the SPM system. And I think the other one is experimentation. I think it's very difficult for companies to experiment with their sales force and their incentive plans in the way it might be easier for some shops to vary pricing at different locations and see the effect that that has. Varying what salespeople are going to be paid based on something is not something that many companies are happy with. And I think without that experimentation stage, it's very difficult to prove conclusively and tweak the plans to get the right amount. So I think, in summary, I think it's often different teams are doing it and people are not willing to experiment with their sales team because they see it as so vital to their business.

That's again, some really good advice because we often do see that IT and sales performance management, sometimes they live in different places, Right? You think they do not, but maybe Sales Ops owns the sales performance management and it does end up, you know, creating some disconnects, particularly when we're talking about data integrity and, and what's needed and prioritization of that. Yeah. So I want to ask you how people can get more information from you because you wrote a really amazing paper on AI and I loved reading it because it wasn't just about sales performance management and AI. It even talked about some of the fundamentals. So what are large language models, LLMs and how do they work? People really are interested in that. It's very relevant topics as well as sales performance management. So how can people just learn a little bit more and, and get some great content from you, Edward?

Well, first of all, there's plenty on our website, so on OpenSymmetry.com type in open Symmetry and you'll find it. The second is if you type my name in LinkedIn, add me on LinkedIn and if there's any specific questions, happy to get in touch.

Okay. Well, I want to thank you so much for being here with us today and I really appreciate it. It was super insightful and I do hope that you will come back.

Absolutely. Thank you, Michelle. Enjoyed the conversation very much.