Rethink Sales Roundtable: 2022 Pay Practices and Trends Survey Readout

Michelle. I never like those. Those web sessions and roundtables where they go. The session will start in three minutes. And it's. And you're like, am I in the right place?

It's really kind of fun.

So you're in the right place. We're here. We're just hanging out.

I know. They just kind of sit there waiting. And I'll say it's. I know. And who is that voice anyway? Who is that voice?

I think it's the voiceover guy.

The voiceover guy.

Yeah.

You know what? You have a really good radio voice, Mark. You could be a voiceover guy.

Yeah. It's like they used to say you have a face built for a call center.

That's really funny. But you have a voice for the radio, so that's good. So you have a backup.

Too bad you're not on the radio, right?

Well, we try. We try. Got that old podcast, Creative Friday and stuff going. I. I say you're on the radio a little bit.

A little bit.

Anyway, so I don't know about everybody across the country, but we are having a really beautiful fall season here in Georgia. Kind of exciting. I love it. I love. This is a great time of year. When the leaves are changing, they're falling, but it's still warm out. I'm a warm weather person. I. I'll admit it.

Yeah. I'm kind of a transitional season person.

I don't know what that means, but.

Like, in between, right. It's like when. When it's.

You can't commit.

When it's hot, you want it to be cold. When it's cold, you want it to be hot. And it's just like. It's like Goldilocks. It's right in between. It's just right. But it doesn't last for very long.

But then. Yeah, that's why I love it when it gets into November and it's still nice and warm. So I'm planning on. If the weather holds out, I'd love to go hiking this weekend, maybe into the North Georgia mountains. That would be good. It's the first weekend I've got that can really do that. Because we've been back on the road, traveling, haven't we?

We have. We have been out west and.

Oh, yeah. Pretty soon for our roundtable.

That's right. That's right. For anybody that saw that video, the Fistful of Data, that was inspired by Clint Eastwood's Fistful of Dollars, So apologies to Clint Eastwood. Although you probably didn't see it anyway.

I think he would like it. If he did, those are back in the days when he was making all those old spaghetti westerns. They call them. Mark, do you know why they're called spaghetti Western?

Yes, I do. Because it was like used to remember that. Can you get like Chef Boyardee spaghettios and you would eat those while you watch them. Is that why? It's because they made them in Italy. Nobody wanted the westerns. They made them in Italy and they took all the, the, the producers and everybody that put on those movies and they all had Italian names and they named them like James Smith and they gave like American names.

Yeah, it was really something. But that's actually what made Clint Eastwood. But that's how they made money. Right. And the, the people really liked them that before they were big, they make all the spaghetti westerns. I bet that was a really fun time to be in the movies, you know?

Yeah, yeah, yeah. So all of our western scenes were shot in like Spain, I think.

I didn't know that.

Yeah, those are, those are shot in Spain. So like good, the Bad and the ugly. Fistful of Dollars. Spain. I believe somebody's gonna check on that. It's going to show up in the chat. I know.

Well, it's probably right, though.

Probably right.

I looked it up, see, because he knew I was going to ask this question and he knew that I knew the answer because I watch all those old movies with my dad, including spaghetti westerns, and I probably even told you about it.

I'm just saying he might have.

Anyway.

Oh, well, all right. So I think we're gonna get going here. It's at the hour, 7:00am on the West Coast, 10:00 clock on the east coast, which meant we had to get up early, but I did.

It's 8 and 11. I mean, our bodies, right. We had the time.

Oh, that's right, the time change. Forget about that.

Technically it's 8 and 11.

That's where you know when the time. Time changes. Yeah, you're always like feeling really, you know, stout. You're like, yeah, I'm going to get up early now. I'm going to get up at six. Like I don't get up at six. I'm going to get up at six. And then you never do it all. It always kind of fades away.

What time do you get up? Nine.

Nine Pacific. The wrong way. All right, so we're going to get into it. Welcome to the Future of Sales roundtable. I'm Mark Danolo and with me is my esteemed colleague Michelle. So we're going to be Talking about the 2022 pay practices and trend survey and give you some insight in term in terms of what we learned and what we see ahead.

That's right, yep.

So let's go ahead and talk a bit about who we are. We're salesglobe, we are problem solvers for sales. So basically what we do is we sell the toughest sales challenges and we do analytics driven problem solving around sales strategy, go to market, sales organization design and of course sales compensation and quotas. And and Michelle, you can see we've written a few books here what your CEO needs to know about sales compensation. We'll probably be drawing upon some content from that today but also some books around problem solving for sales like the Innovative Sale and the book called Quotas with an exclamation point because people yell it. Nobody just says quotas. You always scream quotas.

Sadly enough. I mean you got to have a little comedy there. But you know, today Mark, one thing I'd like to say is that we are going to be doing some problem solving. So as we revealed the survey results and I'm going to talk a little bit about that we went through and we're giving you some of our viewpoint on what's ahead and how you can be thinking about your plan designs for next year. So the survey that we did with World at Work this year, we've done it four years running now I believe Mark. And We've had almost 700 companies participated. This was the largest number that we've had to date. Over half of them I think it's good to note were involved in M and A over the past 12 months and we got a really good cross section of industries so we didn't call them out this time and, and company size. So we got a very good representation of mid sized to large companies and small companies in there as well. And we're really excited with the results.

And I'll say as we get started here too, this is a roundtable so if you have questions, you want to throw comments in, go ahead and put those in the chat or the Q and A box. I always get it wrong. Whichever one it is. Chatter. It's the chat, it's the chat. Okay, so throw me the chat. We'll answer those and keep it interactive. If you, if you have thoughts or.

Ideas that come up, we will, we'll have some chit chat. So what they'll do is they'll, we'll be interrupted if something's relevant to the topic we're talking about other, other Questions, please feel free to enter them in. And we expect to have time at the end where we can cover those as well. So Mark, we it was tough for us to pick out the big findings here and we distilled it down to six hybrid sales roles. They continue to be the fastest growing role in sales today. We started to see that during the pandemic. Pandemic. And it's very important to say how we define the hybrid sales role. So this isn't I'm working hybrid. Right. So this isn't a hybrid workforce question. Like I'm working in an office, I'm working from home. But this is how am I interfacing with my clients, my buyers, my customers. So it means that they're spending roughly half of their time face to face and half of their time working, connecting with their customers in a virtual or remote fashion, regardless of where that takes place. So that's how we define hybrid. And it was really a ship from field sales role, brick and mortar. And there was just something that I saw online today by one of our clients, actually a big advertising company around brick and mortar returning in a huge way. And they were posing the question on what do you prefer? Do you prefer the in store shopping experience or E commerce? Because they talked about Mark, the growth in brick and mortar. And brick and mortar sales were up. I think it was like 18.7%.

Yeah, people are back out in the stores.

Yeah, they're in the stores. And they talk about E commerce too. Right? It was like up 14 and a half percent, something like that. So we're going to talk about that. We're going to talk about Omni Channel finding and retaining talent. It remains a big challenge for sales organizations. And then three other things that we found true to all of you in incentive compensation. One, revenue. It's growing in usage. So it was bookings was always the strongest one for that new acquisition. And we're going to talk to you about the role that revenue has been playing and then profit, how that's been gaining adoption in pay plans and as a service continues as a priority. Although we know that it has been fraught with some maybe economically driven, we're not sure, issues in getting there.

Yeah, I think as a service, I mean that's been the trend. Right. That's where everything's going in terms of moving off of selling the one time license or the on premise thing to the as a service. Interestingly. And we'll kind of color some of these comments today about what's happening recently the as a service the SaaS companies, particularly in software, are feeling the brunt of some of the recent economic pressure because of the variable nature of what they're buying. Right. So in a couple of ways you can, you can use less if you need to. So you haven't committed to that huge license or depending on your contract terms. And then if, if you're laying people off and you don't have as many people, well, you're not going to have as many as a service seats. Right. And we haven't heard as much about sales organization layoffs as, as much as general layoffs, but certainly that can have an impact on the as a service segment.

Yeah, you're exactly right. And what we've been hearing, some companies are even questioning should we be pushing it as much. And you know, and salespeople are saying, would I just be making more if I sold that one time upfront, you know, cash. Right, that, that one, that upfront deal.

Yeah. So, you know, I see this point from Regina on, on the, the note here. Now there's going to be a fee for returning clothes. They'll drive people to go back to brick and mortar shop. That's a really good point. I've heard some of that as well. Like was it stitch fix or somebody $3.50 fee or maybe that was the wrong company. But it's like $3.50 to return something. So it kind of, you know, diminishes that a little bit. In terms of certain people I know that buy massive amounts and they plan to return, you know, two thirds of it. Well, there's going to be a little bit of a penalty for that. So, so that's been used, that whole free return thing's been used for a while to really try to drive online. And you know, people have really picked up during the pandemic, but there's going to to that with some companies at least.

Well, let me tell you something. I'll let you in on a secret. So I actually put this on my post this morning on LinkedIn. Mark and I talked about that. I bought a pair of jeans in, in a store, a little boutique independently owned store in Nashville. But I found out about this new brand of clothing that's Made in America. I happen to like Made in America clothing. I seek out Made in America stuff. Anyway, so I bought a pair of jeans from them online and I'm like, are you kidding me? They didn't fit. But you know, same size, whatever. 10 bucks to return them.

No way.

10?

Yeah.

Yeah. So now I'm like debating okay, is it going to be. What's the cost differential if I have them, you know, if I haven't taken in a little bit, I just have them altered versus return them. So I'm going to find that out, make my, and I got 10 days. If I don't return within 10 days, gotta keep them. So, yeah, things are changing.

Yep. I, I, I had the same thing happen with some boots I just bought and they were, they were huge. And I, luckily I, I was able to return and the place got it back to me. They, they sent them back even before they got the return back. So, so luckily then, then the smaller size I got, they were too tight and I'm like, I can't return these now somewhere in the smaller size. So I'll get used to it. I will get used to it in.

The face walking around like this, love. Anyway.

Okay. All right, so let's talk about what we're seeing ahead here. And some of these things guys, we like to put together as storylines, visuals, because it makes a little easier to grasp the idea. But like you said, Michelle, the future of sales is hybrid. And there was a big question a while back of is field sales dead right? Is field sales gone Right? And what we found about a year ago is field sales is not gone. Field sales actually was coming back strong and there were some other categories that were coming back even stronger. So let's take a look at that. At the height of the pandemic, we had about 60% of people working from home.

Oh, I just got.

Honey, I shrunk the presenters. We had about 60% of people working from home working remotely full time. And we saw about a year ago, hybrid sales roles come onto the scene. Now, you mentioned before, hybrid sales roles are not just like regular hybrid roles where people are working half time at home, but we're really seeing they're spending about half their time working face to face with customers, about half their time on video or connecting in some virtual way. Right. And hybrid's a little different here too, because they're really trying to match up to what their customer does. So if their customer's working hybrid or their customers are working remote, the salesperson is probably going to work remote as well because they're not going to show up to an office with nobody there. Right?

Right. Yeah.

Okay. So big, big reveal of hybrid about a year ago. So we've seen that as the fastest growing sales job category. About 54% of companies are increasing hybrid sales role headcount. So that one is in the lead. It Used to be Michelle, inside sales to point number three there.

Right.

Inside sales was the fastest growing up until the pandemic, but it's still second fastest now.

So you know, Mark, and we go back to 2019. It was. The hiring rate was 15 to 1 for every sales role. So our field sales role. So 15 inside to every field sales role that was hired.

Yeah. So. So you can see these are growing in a big way. They're projected to continue to grow as well. And then you mentioned brick and mortar, Michelle. You can see 52% of companies increasing retail sales headcount. Okay. That, that is a net increase. That's not just accounting for a lot of high turnover in retail, but it's a net sale. Net increase in retail sales headcount. So that's big. So what we're starting to see here, and we'll talk about this, we go along is Omnichannel is getting stronger. Right. So people want to buy in different ways. You talked about the clothing. People want to buy in different ways. And companies are outfitting to do that. Right.

So getting ready to do that. Very clever.

So, so brick and mortar strong. And then let's continue on to see where else this story leads the, the organization hiring though. And again, we'll call this with some recent news. The hiring has not been to the level that they predicted last year. So do you see that these are big increases in headcount? They had actually projected faster increases in headcount. I think some of that's due to the whole war for talent that, that things have been tight in terms of hiring. We're now seeing it swing around the other way, which is more layoffs. And, and I will say, like every time we talk about this. It was about a year and a half ago when we were doing our predictions, we said this was going to happen. We said this is a short run phenomenon and we're going to start to see a swing back around and we're going to find a new equilibrium which we are starting to already see.

Yeah, I don't think we've reached it yet, have we?

We haven't reached it yet. No. No. So it's been, you know, in short, without going onto my whole economic speech, it's been a, it's been a short one disequilibrium where you've got a shortage in supply of. Of. Of from the sellers. The sellers being people that are selling their labor. And, and you've got a. And then you've got a short run increase in demand from the buyers that's going to drive price up. So we're seeing that war for talent. So point number six, we'll go deeper into this in a few minutes. But companies are doing certain things to get people. So about 52% of organizations are increasing base pay and we'll talk about that and some of the variables around that to reduce turnover and to get new people. And about a third of organizations are offering things like sign on bonuses to get new talent. So they're taking some drastic measures and we'll dip into that in a few minutes. But the big question here, and we're dealing with this with a lot of clients, is what do you do in terms of getting your organization ready for where things are going from an Omni Channel standpoint? So how do you design the right coverage model and the right roles? And then from a talent standpoint, what's your value proposition? How are you going to hold on to the people that you need and how are you going to get new people without just throwing more base pay at them? And we have to start to look at how do we strengthen our messaging and our value proposition to our people about, about what we offer. So really, really important point, and I want to take a look at a question here. Is the move to hybrid increasing sales rep capacity. In other words, with less travel, can they cover more accounts as from Steve? Yes, Steve, I mean, I think I agree with you and I, I, I think that you're getting more efficiency because you can obviously make more video calls than you can make individual sales calls. So that I think that's a big input to how do we calculate sales capacity. So when you're doing your sales capacity model, you should have probably higher frequency or higher velocity for those hybrid roles. Is a great point.

Yeah. We ask people though, not don't make it a one for one. So if you believe you've saved, I'm going to make up 20 hours a week in travel time, let's say that's what it was. Right. Being on a plane or driving or whatever, you're not going to get a 20 hour a week capacity change. So just remember that. Right. It's not really going to be a one for one. Conservatively, Mark, we usually put in about 50% depending on other activities or other things you have the reps doing. We talked about they need to be better problem solvers and some companies are still ramping there. So we've gone as low as 30%. But you should see an uplift in capacity.

Yeah. And I think you got to take a real Measurement on that, that point, which is do your sales time allocation. We use sales time optimizer or whatever tool you use. But make sure you understand what kind of call volume or visit volume you're getting in those hybrid roles. Don't just guess at it.

Right.

And then, and then update your capacity model for that.

Understand where your people are spending their time. Yeah.

Yep. Okay, so a little bit more detail here. So on the hybrid roles, hybrid and insider leading the way, 54% of companies increasing hybrid. 43% of companies increasing inside sales. We'd not mentioned the third point yet, but 36% of companies increasing field sales. So you can see in all three of those sales categories, the numbers are up. And what's really interesting, and I love these kind of things because you can start to see what's happening in the market overall. The big push in all this hiring is toward new account sellers.

Yeah.

So your Doberman. Right. Or you know, your, your, your hunters. So new account selling is a priority. 61% of companies are increasing new account sellers in hybrid. 50% of companies are increasing new account sellers in inside sales. And those new account sellers are primarily the outbound sellers on the inside sales. And in 40%, 48% of companies increasing new account sellers for field sales. So what does that say? Saying companies are looking at how do we go out and how do we get new customers, not just hold on to what we have. So companies are getting much more aggressive about hiring in those areas. So that is a key point. And we have this broken out by industry. If you want to get the report from us about, well, what's happening in my industry in terms of new account selling, hiring, what we can tell you that as well.

Right. And we believe that one of the reasons behind that is because we've already talked about the hybrid is the fastest selling or fastest growing role. And people are having to. Your salespeople are having to learn how to connect in new ways. So going out there and getting new customers, new clients, new buyers, it's just a whole new game. And you know, companies are seeing that there's greater opportunity to go out there and, and get market share. So that's what the game is today, getting new.

Yep, yep. And good point just came up again, thank you for Regina. The companies hiring people in other geographies for salaries that are in their home geography. So she uses the example of California companies paying California pay to people in Texas and then it makes it harder for companies in Texas to compete. Right. So I'm a big fan. Free market Guys. So I'm like, okay, that's interesting. What, what does that mean in terms of, you know, competition for labor?

Yeah.

And, and do California companies really need to pay California rates for Texas labor? Are they being efficient that way or, you know, I'm sure their HR policies will say something, but could they actually pay less and still get what they need? But that's a really good point. So we now break down the geographic barriers. Then you've got the other situation, Regina, which is California companies saying, well, okay, if you're moving out of the Bay Area and you're moving to Idaho, we're not going to pay you California rates or wages anymore because, you know, we're.

Not going to do that.

So we're seeing that happen too.

Yeah. So interesting. Mark, I've got some colleagues out there and, you know, running a couple of people that are running global companies and have found out that a lot of the employees, as in thousands, you know, multiple. A lot of people moved out of state and they didn't even know. Now, that's a whole nother question, not only about pay, but around tax liability and everything else. Like what?

Like, we want you to come in the office next week. Well, no, I live in, I live in Minnesota now.

That's just a whole other side note. But we'd love to hear more your thoughts about that and what you might be facing. Oh, so now we're going to talk about Omni and trusted advisors. So what we have said is that we've got this omnichannel growth and it's been, you know, it looks like it's here to stay and trusted advisor status, which we know is no longer, you know, it's not just a phrase. It's the way it is. And let's talk a little bit about why we thought it would be good to talk to people about that. So we know that, you know, back at the beginning of time, people didn't go very far. Everything was pretty local. And when we talk about primarily fields, everything from the door to door salesperson to, you know, oh, gosh, back in the day. Well, back in the day, in those old movies, they've got the people driving the carts and the merchant would be going into the cities. Right. But it was field. Right. And they'd be going around.

They were actually out in the field.

Out in the field. So then what we saw was that. Is that. I'm sorry, with globalization, we started to see some pressures for efficiency. So globalization. I mean, we were able to. With planes, trains, automobiles. Right. Everything getting A little closer hiring people from different areas. We started to see catalog, phone orders, gosh, those, those continue today. But then we started to see a real growth of inside sales in B2B and that center of excellence where people work together in teams. And many of you on the, the, on our meeting chair, on our roundtable will probably be familiar with that, right? There's bells and whistles, there's balloons, they're, you know, it's, it's a real team environment. But then what we saw is that we had some technology innovation, hello Internet, right, so that came about. And the informed buyer, right, so the informed buyer, that's the one that has talks to you and they've already talked and they've already researched five or six other competitors. They already know what pricing looks like, etc. So you've got this evolution of trust advisor. It's no longer about features anymore, it's no longer about, you know, my product. But it's what am I solving for for you? And you know, let me explain why we're different. What's our value proposition? And then we've got more evolution of technology and we've got new sales roles that started to evolve. We talked about the hybrid role which really has been enabled by what we're on today like video, video conferencing and the ability to be what almost real, right? Like almost face to face. This virtual face to face like we're on today and tele web. And then finally you'll see how that curve just goes straight up. Because we had the COVID acceleration which created a lot of behavior, behavioral changes which really were habits, right? We had to shop online, we started going to the Korean curb. More calls were made for from in the B2B space for orders. And then even companies started to adopt and put online a self serve ordering. So then those habits, you know, really became behaviors well ingrained. And so we know Omnichannel trusted advisor here to stay. So why is that important to you?

What does that mean for the sales process?

What does that mean? Right? So the legacy sales process and yours may not be just like this. So this isn't about, you know, this is the right sales process. But basically there was a couple of things going on. Prospecting, where you go to the buyer, demand creation, where the buyer comes to you. The whole role was to engage, educate and inform about your product, your features, your pricing, negotiate what that was mainly it was around the pricing and then you'd win it, you know, or maybe lose it, but then deliver it, right? But that's how it was. Now what's happened? Who Two drivers, evolution of technology and informed buyer. So now what we see is there's all of this planning how we're going to go to market and how are we going to engage people in this very crowded space of competition. The whole discovery and qualification and value proposition, it like cycles around and around as sellers are being asked to really think about what problem are we solving for. Right. And then as we get through and we're negotiating and looking at close win, it's not just about how much is it going to cost, but negotiation is really around what does our relationship look like, how do I continue to engage with you? How will you help me solve my problems in the future? I mean, it's a whole different ballgame.

Yeah. And what I think is really interesting how these, these points key back to that, that evolution that you talked about, Michelle.

Yeah.

With the evolution of technology and the informed buyer. So as you mentioned up front, the buyer knows a lot more so we don't have to do that same level of informing. And as we've been talking about or alluding to along the way, Omni Channel is playing a bigger role. So they expect to be able to get information from multiple sources. They expect to be able to make the purchase, you know, jump from one channel to the other to make the purchase. They may not even want to deal with a human. Right. So I keep seeing where we're heading in the future here, which is the salesperson who's going to have the advantage that the seller is going to have the advantage. The leader is going to have the advantage is the one that's able to move not just into the trusted advisor role, but you were talking about the ability to solve problems. Right. So that's the one thing that's not going to be AI'd or automated or offshored is the ability to solve the customer problem. So where the customer can get all this information up front. Now it's that problem solving capability that I think is going to be the new competence that differentiates organizations.

So Mark, we were just having a dinner and then I want to get to how this impacts people that are in payments that are dealing with incentive comp. But I want to add, we had a dinner the other night with a global client, right. They do, they offer global services and their sales leader was talking to us and said, I need, you know, still. Right. I need my people to be able to understand what problem is it that our clients are solving for or we're not going to Win.

Yeah.

And what we say is often the first thing that someone says you like. I'll make up a couple common. One that we hear all the time, which is our people are just not out there getting new. They just keep selling more of the same because it's easy. But that might not be the real root cause problem. That might not be what they're really solving for. And they think that they just need to put in, you know, a higher threshold, a stricter plan, you know, something that causes them to push beyond. But that may not be the root cause issue at all. You may have some coverage model or even some mismatch on your, on your product, on the product mix that you're offering.

Yeah, that. The company you mentioned, Michelle, I think is they're huge, they're global. I think they're a good indicator of some of what's happening is they, they were saying, if you take this sales process as an example, they're saying our people are so used to getting the opportunity up front and basically filling the order.

Right.

And you said our. And he talked about certain levels of tenure. He said our people at that certain level of tenure have never been in an economy where they've had to go out and find business and fight for business. It's always just come in. Right. So they've, they've started at that beginning of that process that you see there. And he said they would then jump to the end, like, okay, we need to sell a big deal. I'm going to scope out something really big. And they weren't, as you said, getting to solving the problems. They were jumping way ahead. And he's saying that that new skill is, look, we can. Yeah, you know, we've got a lot of marketing, we've got a lot of, A lot of tentacles out in the market. When we find those opportunities, we need people that can really dig deeper and find out what is it that we're trying to solve for that, that client, for that customer. So, guys, this, you know, mark our words, we'll talk about this in a year. That's going to be a differentiator. It's going to continue to evolve as a differentiated. For companies.

That's right. Solving ability and for our incentive compensation professionals on the line. When we think about Omnichannel, you need to be. You will be talking to your sales leader. There's a lot of questions, some of which I'm sure you're already facing. But one of the big ones is what do we pay for and what do we not pay for? So I've had questions around. We've got the self service portal, do we pay them? What if they go in a store and then they buy online, do we pay them? You know, what should we do? So these are big questions that need to be answered and lead to.

Yeah, I mean it's a great point. Omni Channel.

So, yep.

Okay, so you've got the Omni Channel question. From a compensation standpoint, you've got to really work back up, you know, what we think of as the revenue roadmap. So you've got to work further upstream and answer some of these bigger questions, which is how do you want the customer experience to operate? And so the customer, you know, we might want them to engage, how they want to engage, when they want to engage, where they want to engage. And so we've got to look at the natural process. Right. So we were working with a retailer right now. So they sell retail through the store and you can buy online, right? Or you can also call over the phone. Well, there's some gaps in between there. So somebody goes out to buy something at their retail store and, and they go, great, I think I want to buy this. Can I go online and just purchase it? Well then the salesperson puts pressure on the, on the customer to purchase it in the retail store because there's not a clean transition to omnichannel for that customer to be able to move to the right situation or can I call online? Right, Same kind of gap. So how do we smooth out the customer experience? And when we talk about channel neutrality with in Omni Channel, we're talking about it both from the customer standpoint and the seller standpoint. So big, you know, first big question, what does the customer experience need to look like? Second big question, how do, what does the salesperson experience need to look like? So I want that salesperson to feel, or probably want that salesperson to feel channel neutral. So sure, I helped you out on the store. Just go online@xyz.com and you can make that purchase. Right? Okay. So some companies are doing a little wonky stuff, right? They're saying, well, sure, you can go online here, just enter this code and I'll get credit for it. Right? So enter this code so it tags my, my involvement in the sale. Right? So then we have to figure out how do we actually do that, crediting how to do the compensation. Your simplest way obviously would be to credit everybody for everything. But then you're going to get a lot of inefficiency. Which brings up the third question. How do we not multiply our cost of sales? So three big questions around Omni Channel sales, but there are a lot of complexities, but again, starting with the customer experience and working through the salesperson experience and then the motivators and the cost of sales. So, so big, big consideration. We're not going to try to solve it obviously right here because it's, it's unique for every company, but considerations.

I actually, I think that this is a great piece of information for you to take back to your organization as you're facing the same challenge, right? So you're going to have your cf, you probably finance and sales and who knows, maybe marketing in the room. But basically, you know, going through that and answering those questions will help drive the solution, don't you think?

Yeah, yeah, yeah, I think, I think the, you know, the consistent factor in, in those kind of questions is with sales compensation, almost everything starts further back up the revenue roadmap. It starts further back upstream in terms of what is our strategy, what are our C level goals, how do we want that to flow into our coverage model, how do we want that to flow into our sales process and our customer experience? And then how does that look when it comes out with compensation in the end? So everything does connect together. That's why compensation, I find is one of the great, you know, geeky connection points for everything. It is in, in the sales management model.

Everybody pays attention to it, that's for sure, no matter what they do. So if anyone's not familiar with the revenue roadmap, I think many of you are. It's, it's one of our, our foundational pieces. You can find them@salesglobe.com and Mark has it right there.

It's one of our laminators.

So you can pretend it's, it's in back of us. We could pretend you just pulled it out of the wall or something. Anyway, okay, so good point.

All right, so let's dig a little bit further into the thing that we referred to earlier in that storyline, which is attracting and retaining talent. So the question comes up, what are companies doing to retain talent? What are companies doing to attract talent? Right. And the answers are not all that surprising, but the answers are somewhat concerning as well. So stopping turnover, these are the top actions that companies are taking. This is across industries. And again, we've got this cut by industry as well. So if you say what's happening in tech or healthcare or whatever, we can answer those questions for you. 52% of companies are increasing base pay to hold on to people. Okay, well, that's kind of obvious. No brainer, right? 42% of companies are increasing incentives. And I think it's 24% of companies that are doing both increase on base and an increase in incentives. And you've got 29% of companies already offering greater than 200% of target incentive upside in their incentive plan. So 200% in addition to their target, their target incentive. And I'll come back to this in a second. 37% offering hybrid work. Okay, so you can. Now this is really funny when you talk about sales organizations, because sales organizations have been hybrid for years.

I know.

I mean, how many salespeople actually come and sit in the office? There are some companies where they do, but, but that's not an unusual thing. About a quarter offering remote work and about a quarter offering enhanced reward and recognition. Okay, and I'll come back to some of these comments, but that's for stopping turnover. And then I want to go to the next one here, which is what are they doing to acquire new talent? Okay. Similar types of numbers. 50% offering higher base pay, 39% offering higher incentives. Then you see signing bonuses, about a third offering signing bonuses, about a third offering hybrid work, and then about a little over a quarter offering remote work. Okay, so quiz question for everybody. And you don't have to answer, but kind of think of this. I know we always like quiz questions, so we all like the Cosmo quiz.

His question is, and what if I get it right?

You get a sense of pride and accomplishment.

Okay?

It's all about the ego. Okay? What's wrong with hiring and offering higher base. Pal, it's base salaries, higher base pay. What's offering, what's wrong with offering higher base pay? You don't have to answer that. Okay, Didn't I mention earlier Econ101, this is a short run problem. This disequilibrium in supply and demand in the labor market is a short run problem due to what's happening with the number of people in the workforce. The people that are, you know, the, the, the departures or the quitters, what do we call them now, the lifestylers. This is a short run problem. What you're doing is you're committing a long term or you're committing to a long term or long run solution for a short run problem. Once you offer those higher base salaries, that higher base pay, you're stuck with that for some period of time, right? And so then there are only three things you can do as a result of that, right? So you can either increase quotas or you can decrease costs somewhere else or you can increase the, the price of your product. And inherent and increasing quotas is increasing productivity. Right. So if you don't do one of those three things and somebody else will probably find a fourth one, that's fine as well, but which would be great. But if you don't do one of those three things, you're going to be losing margin. Right. So, so you're committing in that base pay decision to a long term solution for a short run problem. Why not put what you can into performance pay or into incentives? And I realize you have to do some increase in base pay to be competitive in the market. And in fact, okay, we can see our short run problems starting to show up now. Right. So was it Twitter the other day, laid off half the organization. Facebook today or Meta, maybe they'll go back to Facebook is now going to be doing significant layoffs. So we're already starting to see a problem. See that happening. Right. So the short run is already starting to show itself and now we're going to be sitting with a lot of companies that are overpaying and over committing.

What's interesting is for the first time I'm hearing, because it's being CEOs are actually coming out and saying get rid of the dead weight. People didn't really say that before, but now, you know, they're, they're looking at that. And then the other unintended consequence, Mark, has been pay compression. So you know, the difference between people that are highly experienced and those that are not, that pay is getting, you know, compressed and that's created an unintended consequence that companies are having to face as well.

Oh yeah, we're seeing that company by company. We do a lot of, we do a lot of competitive benchmarking. And as we go and talk to different companies, many, many of them are saying that, they're saying our people that have been here for a couple or three years or four years, they're being surpassed by new hires that are less experienced and that's causing a problem and we're having to make adjustments again, more long term commitment to a short run problem. So I see somebody commented here already happened. Yeah, bingo. So, okay, so there you go. So, so that's what's happening right now in terms of attracting, retaining. So think back on that last storyboard that we talked about just, just as a final comment on this in that you've got to look at your employee value proposition. So when we talk about doing the competitive benchmarking One thing we're hearing from companies is, hey, we're not going to just pay more because we have something different in terms of culture or we have something different in terms of the work life balance or the lifestyle or what we do as a company, the affiliation with our brand, whatever it might be. So companies are looking at what's our total value proposition. So, so don't just go for the, Go for the base pay.

Yep. Okay, so let's move on to incentive compensation and what the big story was coming out of the survey. So the first one is that plans, they are very specific and focused. And what that means is that we're looking at two to three measures in a plan, which is what we consider a best practice. When you've got too many measures in there, people tend to lose focus. Right. And then because you weight those measures, more than likely, it just, you know, creates, it dilutes the importance of your most important priorities. So 71% of companies, three quarters, are using two to three measures in their plan. And that was what, 56% in 2020. But that's simply because during the pandemic, we saw people going down to maybe one measure. It was just a strange time. And people weren't sure what they could measure. They didn't want to hold their teams accountable for profit, for example. They were just out there to get what they could get. The other thing that we're seeing is when we look at the sales roles, we're starting to see revenue being used more frequently as one of the key measures in the plan. So when we think about people selling, if I'm a new acquisition hunter, a lot of times they're being asked to focus on bookings. So go out there and just close that deal. But now companies are becoming a little cost sensitive and for other reasons as well. They're starting to get more focused on the revenue that's coming in. And so we're seeing that, and we're also seeing profit, gross profit, showing up in the plans. And we're being asked about that pretty frequently, I would say. This year, Mark, the question has come, should we add profit in, even if it's just like a 20% weighting in the plan to provide a little bit of focus? And then I guess all we'll say about that, because you're going to spend more time on this, is when we look at the bookings measure, we're seeing that tcb, total contract value and annual contract value, those are the most likely used methods to determine what the pay, what the value of the deal looks like. So the other big news is, which might not be big news for any of you, but maybe you would like to know that your colleagues and peers out there, everyone is still struggling with how do we set quotas in the next coming year. So there's still continued supply chain. Now there's economic uncertainty, there are layoffs, there are people being hired, there is are people going to work in the office or remote. And there's changes in what the needs are from in the B2B space. So again, we're looking at a lot of factors that are impacting quotas as well.

Yeah. And I want to mention if we go back for one sec, Claudius, this one point here on individual versus team measures, that's another big dynamic we're seeing shifting as well.

I skipped right over that, didn't I?

Either I'm repeating myself, which I do all the time.

Right. And what's very interesting is during the pandemic we had a lot of our clients even coming back to us. But this showed up in the survey and they went to more of a regional country team level goal setting because it was easier and they thought it kind of, you know, the bigger the number, the easier it is to achieve to it over a greater mass as opposed to being so small specific. But there was pushback even at the individual seller level. So companies are working to get back to that individual measure. The individual seller wants it and the company does as well.

Yeah, yeah, yeah. So that, that is an interesting shift that we're seeing going back toward individual just for all the reasons you outlined. But I, that's one of those things. I'm like, wow, isn't that cool that people really do want more individual accountability as well.

Yep.

Okay, so let's go on to the next point. Story and plan governors. I'm not supposed to talk about the election or governors, so we're not going to talk about that. We're going to talk about governors for the plan. So there is a general trend here that we're seeing in terms of during the pandemic, things like caps and thresholds came off plans. So companies are saying we want you to be able to earn earlier. We're going to take the thresholds away. We want you to be able to earn the upside if you can get it. We're going to take the caps away. So things opened up, those governors removed from, from the plans. And then what we're seeing now is a shift from 2021 to 2022 in the following areas. So caps are Reducing to some degree. Now, we're not big fans of caps here at Sales Globe. We think about caps kind of like free range chickens. Right. So you got this chicken sitting in a very small cage and that very small cages is the, and that, that little, very small cage is kind of depressing because it kind of influences how I perform as a chicken.

Right.

So, so that's our pay cap. But you want a free range chicken. You want somebody who's positive. I mean when you talk to people about a compensation plan and they, they talk about the cap on the plant. We don't like the cap on the plan. You ask them the question, well, have you ever hit the cap? No, I never hit the cap, but I know a guy that hit the cap. It was a couple years ago. Right. So. So nobody. So the cap is more psychological. So back to the free range chicken thing. I'd rather have a free range chicken that has aspiration. Right. I want somebody who's, who wants to go out there and blow out the plan. Because like the free range chicken, we know there's a fence out there somewhere. Right. There's a natural limitation to how far we can go. So the cap is hugely psychological. So those are starting to pair off a little bit. But other things are coming along. Bloomberg and megadeal policies increasing a little bit. You'll see. So that's, that's those unforeseen deals or huge deals where we take them outside of the plan. Remaining even is thresholds for hunters. And you can see that's holding even from year to year. And also your thresholds from far for farmers holding even year to year. And we could talk separately about why you use thresholds, but those are holding pretty consistent. And then regressive payouts are increasing as well. Swing by there. So you can see that regressive payouts are increasing as well. Regressive payouts are basically when you get to that excellence level, they start. The effective commission rate starts to slow down on the plan. So, so it's slowing down the payout. So that's kind of like a soft cap in a way.

Yep.

Right. So that's a little bit what's happening on plan governors.

All right, so let's get into the plan measures. This is where this came from. So we went across industry and this is also for your field and hybrid sales roles. It was. And actually the inside sales is in here too. So whether I'm doing account acquisition, account management or I'm doing both, that we grouped in all the different jobs together. So what we found is top performance measure across all three areas. So whether I'm a hunter, a Doberman or I'm out there doing account management, penetrating accounts, or I'm doing both. Revenue appears to be the number one Measure. It's number 1 52, call it, you know, 62 on acquisition and management. So call it. More than half of companies are using that as the top measure in their plan. Secondly is coming in bookings. Right. So that's when I booked that order. And then gross Profit as the third measure with 39 and you know, about 35% of companies using that as well. So that's just a little bit of a breakdown. And again, as Mark said, we've got this broken out by industry and by job role as well. But we want to aggregate this to show you what it looks like.

So a question came in from one of the viewers on are we seeing compensation on price increase at all? Price increase? And that would be kind of inherent.

In revenue, but so it hits in revenue but also on gross profit. And that was the question that came back to us which was if I can, if I'm understanding the question right, because you're looking up and I never know what he's thinking when he's looking up. But anyway, what one of the questions that have come back to us is if I can give them control across the price that they offer. So they've got, you know, a starting and then a higher price. Obviously that higher price brings in greater margin for the company. And the thought was, you know, should we could pay them for that spread. Right. So the answer is yes, we are seeing some of that. However, your rep has to be in control of that and it has to be realistic, right?

Yeah, yeah. And probably the most common measure that I think I'm seeing on price increases is price realization. So it's a target price and how close can you get to that target price if you don't, like you said, Michelle, if the rep does have control over price in margin or even if they don't, one of our clients said recently that our reps are customers best negotiators. I mean, they'll come back and tell us why we need to lower the price for the customer. Right. So. So that would say the reps not highly impacted or compensated for price in that situation. But yep, good question.

So the other thing is we just wanted to bring up a consideration point because we're being asked this a lot as well, whether you're paying on bookings or revenue. That's where it starts. But Then it's like, okay, how do we measure what, what the value looks like? And it starts with contracts. And then you've got, though we mentioned that TCB and ACV are being used most frequently for bookings by companies in this study. But then you've got MRR monthly recurring revenue and how long should that be paid out volume in units? It could be whether it's new business versus renewals, do we pay for renewals and how much and then one time sales. Right. So there's all these different things that you need to be thinking about in bookings and revenue and get very specific on how that's defined and make sure that's communicated very well in your plan and very well defined for the sales rep. So they know what they're going after.

Yeah, yeah. And I think one of the biggest challenges that I see in this area is that we're trying to align the SaaS payment with what used to be the, the perpetual license or the premise payment. And the other one is the concern about annuity. So I don't want to create something that's going to be a long term annuity that people are just going to continue to earn that money over and over and over as long as we have the account. Because what it starts to do is it starts to offset the, the new customer selling. So you've got questions about what are the right roles. I'm going to just swing over here for a second. What's the timing of your payout? So when you, when you're doing your TCV or your acv, how much of that are you paying at the time of the deal? How much of that are you paying a year in or at certain, certain points? Who's eligible? RPN responsibility, like I mentioned, retention, penetration and new customer acquisition responsibility. And then finally rules of engagement. So how does the team work together? So again, going back up, the revenue roadmap, the answer to a lot of the, the SaaS questions is going to be how do we want that, that sales process, those rules of engagement, the sales strategy to work.

That's exactly right. So as you're thinking about, you know, you're being asked to solve for a plan, you're being asked to create a plan around everything as a service or as a service. There are these other questions that need to be answered. And this is again, I think a good tool mark to get the conversation going with sales and finance and those that you need to get their buy in from.

Yeah, let me bring up another question here. Any thoughts on how to attach value to bookings for hunters in a consumption based SAS model. Yes. The, the challenge with a consumption based SaaS model for a hunter is that we have some kind of soft commitment from the customer that we're going to use your product or use your service to a certain level, but we don't really know what that level is going to be until we get some time further out. If you have a true hunter or true Doberman, you don't necessarily want them hanging around and babysitting the account for a year to see what that consumption level comes in at. One good solution, and there are a number, but one good solution that I liked was a company we worked with that had two different sales organizations. One was a software based organization where they sold an actual license. The other was a service based organization that was SaaS in nature. And what they found was the software based license organization. People would get paid on billings. They'd work all the way to the end of the year. They work through the holidays because they knew bookings. I'm sorry, if I booked something, I would get credit for it. Right. The other organization, the consumption based organization, was paid on revenue or actual billings. Well, the consumption based organization, they were enjoying the holidays in a different way. Right. They were going home because they're like, well, if I sell something in December, it doesn't matter because I'm not going to see any, any revenue or billings come through from it anyway. So what they did, being good analytical people, is they figured out what is the typical percentage of committed consumption from the customer that will come in because they had such a history of that and what level can we actually commit to the salesperson and paying them. So it actually turns it into a pseudo bookings measure. And it changed, totally changed the behavior of the organization. And because it was financially modeled, well, they didn't lose money off of it. It was highly predictable.

Yep. So like you said earlier, that might not be the answer for your company. Whoever asked this question, it was a great solution for that business. So we can, you know, we'd be happy to talk further about that. But the. There's a lot of answers out there and they're out there. It's just a matter of, you know, figuring out the one, the right one for your business. So a little bit about M and A, because we said that over half of the companies that were involved in the study were part of M and A over the past 12 months. And so, you know, we've got 1, 2, 3, 4, 5, 6 top challenges. The top three role definition alignment across the organizations. And we hear this time and time again. So we had, you know, about 80% of companies saying that that was the top challenge. And I focused in Mark on enterprise companies here because for M and A it's more prevalent on the larger companies how big those challenges really are with a smaller company that might have five people buying, you know, in and there might be two more joining the challenge may be a little bit less. So we wanted to get, get some good solid representation. Incentive compensation alignment. That's everything from the pay philosophy to what the measures are used that people are paid on to the timing. You know, that is a big challenge as well. And then a big one we see that we're solving for all the time is total target compensation and pay levels across the organization. So gosh, I remember, I still recall a global client that you know, it was they offered on prem bought a software company and their inside sales team with the premise product was fairly entry level and the acquired company there inside sales organization was extremely sophisticated. In fact, their pay rivaled that of the field sales of the other company that was acquiring them. And that was a highly compensated role. Well, they immediately started to see fallout where people were leaving the company and they couldn't figure out why the company that, that they had acquired. And they found out, you know, rumor mill, right, Chatter at the, chatter at the cooler and beyond. They thought that their roles were going to be diminished so they started going to the competitor. So you know, there are other issues around integrating the sales organization, cultural differences, aligning the performance expectations. Again that gets around to the culture of the company and what they expect. But you know, I think the big one here is get your role definition alignment across the organization set and everyone bought into that before you even tackle the other things. That's what would be one of our lessons learned on that. And when we talk about and think about what the expectations are from an acquisition. So there's three, three big ones usually that we see and a couple of them fall into the sales organization. So cost synergy, when we think about sales, that's reducing the overall cost. By combining the companies a lot of times they're thinking they can leverage best practices, they can leverage what's best best across the companies. Maybe their, their structure and model that they have revenue synergies would be things around cross sell. The ability to put products together, bring new products to the market and grow your market share by having both companies take advantage of what the other company has to offer. And then of course capital synergies Right. So what kind of buildings and things that they have in place. And then, you know, when we think about the outcomes that depend on sales revenue, big challenges. We know that you've got cross selling, new product solutions, bundles, geographic expansion and segment and sector expansion and then the cost synergies we see around sales capacity improvement. Again, I talked about leveraging best practices, the belief that there can be a headcount reduction at some point and streamline processes. So the big warning here is that or the biggest thing to be thinking about is 20% of that revenue center synergy potential it's typically put on cross selling. But yet less than 20% of companies actually achieve that cross sell goal. So there's a lot to be thinking about. And as we delve into the root causes, why it goes back to that role alignment and the setting expectations and people understanding what it is that they need to do.

You know, it's funny, Michelle, the, the biggest barrier that we hear on cross selling is risk.

Yeah.

It's not like we're going to throw more spiffs or more incentives at somebody to cross sell products of a company that's been acquired. It's, it's the person says, hey, I don't know how, how good those products are that I'm selling, how reliable those services are. I've got a really strong relationship and I'm in my best accounts. I don't want to put that at risk. And you know, if I'm going to introduce somebody new as a person into the account to sell with me, well, that's a risk as well. So risk is the big, single biggest factor in, in the single biggest thing that companies look for for synergies in an acquisition, which is cross selling.

Yep. So, you know, got any questions on that or you need some help around that? We're here to help. So with that.

Awesome. So that's what we have for today. A couple action items for you. We have the Rethink Sales podcast which is on Spotify and Apple you can check out. We have a ton of great podcasts out there on all sorts of different topics. We have books, as we mentioned before, for some great practices and, and call us, email us if you need advice, you need some ideas, you need some help making something happen. Whether it's a significant transformation or it's focusing specifically on your sales compensation program, we, we'd love to help you solve the problem. So thanks everybody for joining us.

Thanks a lot. And we really appreciate you taking time out of your day to spend with us. We hope this was enjoyable for you and that you learned something new.

Thanks, everybody. Have a great rest of your week.