Rewarding the Sales Rep of the Future: Three Game Changers You Need to Know NOW!

Hi, I'm Michelle Seeger from Sales Globe and thank you so much for joining me as today we talk about rewarding the sales rep of the future. But first I just want to tell you a little bit about Sales Globe. So Sales Globe is a consulting firm and what we do is solve the biggest challenges that companies have with their sales organization. We refer to ourselves as a data driven, creative problem solving firm for sales challenges. You'll see that we've written a few books and one of them, what your CEO needs to know about sales compensation we'll be exploring a little bit today in our talk. So there are three things that we are going to be covering with our time together today. The first one is I'm going to tell you a story and it's going to be a story of what the pandemic has had on the evolution of sales and particularly the sales roles. Secondly, we're going to discuss a little bit about the war for talent that we've all heard about and changing expectations, expectations of employees, employers and the customers that they serve. And thirdly, we'll discuss and explore a little bit about what's happening with incentive compensation. And I would be remiss if I didn't leave you guys with some tips and tricks and things that you can do today and consider for your own organization as you think about the future of sales. So now let's get to our story and what we know is that pre pandemic, inside sales was the fastest growing role in the sales space. So in B2B sales, of all the different sales roles, the inside sales roles was actually at a hiring rate of 15 to 1 to any field sales role that was being hired. And there are three reasons that that happened. Lot of factors, but three big ones. One, because of needing to give global support 247 support for customers was becoming more and more of a priority. Secondly, it was proven and shown that inside sales is actually a lower cost model. So supplementing your support with inside sales with field sales out in the field was actually a pretty good model for many companies to manage overall costs. And, and then of course there is that whole center of excellence. In fact the whole thing about the center of excellence and that's where teams of people work together to the betterment of the organization, how they sell, the process. Those people encourage and work together in that team environment. And that was something that companies really had an eye on as it was being seen as a great way to grow and develop sales. But then the pandemic happened and what happened then is that People that were working inside offices or that were going on site to visit their customers, everybody, sales or not, they were being forced to work from their homes. What that led to was a lot of fears in the early days. So fears around productivity from the management perspective, fears around how am I going to connect with my customers? We're hearing that a lot from salespeople and. And finally just the pandemic itself. So what's going to happen, what's ahead, and how is that going to impact me and my family? And what we found throughout the first 12 months or so of the pandemic was that productivity was actually higher. Now, some of this is because people are working around the clock. There was a lot of different factors as to why we believe productivity was higher. And now the question, though, is being asked, as we're going into 18 months into the pandemic, is the party over, leading to what I like to call the whole love, hate relationship that people have with work. So the relationship with remote work. Let's talk about what we all love about it. For those salespeople and anybody that was in a role, that was traveling a lot of their time, the road warrior days are over. And they're like, wow, this is so cool. I'm spending time at home, spending more time with my family. Everybody else who wasn't traveling is saying, wow, I really like not having a commute. You live in a city like Atlanta. That commute can be an hour one way, and so no commute is good. And then what we found through this big virtual experiment, because that's really what it was, is that virtual really does work. So remember 18 months ago in B2B sales, Zoom wasn't on everybody's, on the tip of everybody's tongue. We didn't really know what virtual communications were all about. And then finally, we're hearing from a lot of people that they really enjoy the flexibility that working from home has provided to them. But then there is the flip side. So what is it that people really hate? Well, one, we know for a fact that the isolation is real. And that just means that people are working at home all the time. And they're starting to miss that camaraderie of working with others. And for those of you in HR that may be listening, think about this. We hear a lot of challenges around people that are younger and maybe they're graduating from college and it's their first job coming out of school. That particular set of people or that particular demographic, they're expecting to join a company where they can meet Colleagues, they can learn from others. It becomes a bit of a social as well as a work role for them, a work job for them. And they're missing that so many times. They're working out of a one bedroom apartment, sometimes a two bedroom apartment, and two people are working from that place. So it's creating some challenges. And that leads to the other challenge, which is development and career path opportunities are being missed, some people believe. And you know, I read something in the Wall street just about a week ago now and they were mentioning that those that are in an office environment are actually finding that they are on track with their career path and those that are home are not from a sales perspective. And even beyond sales, we're finding that it just doesn't replace face to face. So this is great what you and I are doing today, but I think it would have been a really wonderful opportunity if I could have been looking out at all of your faces instead of virtually looking at a camera right now. And then finally, we are starting to hear from managers that there is this loss of productivity and engagement that's starting to be experienced from some roles out there and some people. And what does this mean for sales? What it means is that we've got a new role that's coming and it's called a hybrid sales role. So we've got the emergence of a hybrid sales role. We've got field sales that we're finding is not dead. So even though that road warrior has been working from home, there still is a place for face to face. And thirdly, inside sales, that's the one that's really in flux. Now let's get a little deeper into each one of these. The hybrid sales role. Let's discuss how this is defined and how we at Sales Globe have defined this. Is it was more than likely a field sales role that would now be spending 50, so about half of their time or more virtual and spending maybe half of their time face to face with customers again. So it's a hybrid role. They got to be really, really good at virtual communications, but will still be meeting with customers face to face. Secondly, we've learned that field sales, it's not dead. Field sales again, are those people that spend the majority of their time in front of customers, either at their place of business or somewhere else. And thirdly, the discussion around inside sales, that's in flux. As we're talking to leaders of B2B sales across the world. What we're finding is that they're trying to figure out and determine if they should be bringing back the center of excellence. Let's discuss a little bit more about why. What we found is that geographic boundaries, when people are working from home, they matter a whole lot less. The other thing that we know is that many offices remain closed as a result, particularly for inside sales. What we have found is as they're hiring up on that role, rather than looking in a small geographic area where people can come into that center of excellence we discussed, they're able to broaden the talent pool for that particular role. And as a result they're getting better people in the role. And so we're hearing a lot of the productivity increases are actually with inside sales teams for people that have hired that are very, very good and strong in the role and they're more successful than when they had a smaller talent pool that they could choose from within a geographic location. The other thing that we're finding is that expectations are changing. So now we are over 18 months into the pandemic and customers are changing their expectations, employees are changing their expectations, and employers. We'll discuss customers for just a moment. What they are expecting and what we're hearing is that they've learned new behaviors for how they're buying. So they've been having to buy virtual. They've been buying possibly through online websites, through virtual communications and the request for maybe some self service, the request for more information, what it is they want and how they want to be serviced from B2B salespeople is definitely changing. Employees are changing what they're expecting and employers are changing. So now let's discuss the employer. They are talking about building a sales culture as being a top C level goal. And what does that mean? They're like, well, sales organizations, they always sell. But what we're hearing is that the whole culture of the organization, they want them to become more focused on the growth of the business. As we discuss employees expectations, we've got this big war for talent. So one of the things we know is it's approximately maybe 1.3, 1.4% of the workforce leaves the workforce every single year in the United States. This is a US centric stat. What we've heard is that that number has gone up to about 2.3%. These are people that are leaving their jobs and they're choosing to not get another job or they're choosing to get a job somewhere else. There's a lot of this job shifting around. It's creating this war for talent, for, for people. And two things that we know coming out of that is this. Employees who know that this is a great job market for them. They're asking for pay increases. In fact, we're hearing approximately 20% pay increases are being requested from employees that are applying for a job. We also know that everyone that applies for a job, every applicant that applies for a job, they've got about five to six offers for a particular job that they are applying for a particular job type. We also know that the employee value proposition is going to need to change and that would be the other benefits that people are receiving outside of just pay alone as a result of building a sales culture, becoming a top C level goal priority and employees that are asking for pay increases and having better employee value propositions and incentive compensation. Guys, this is the big news. It is becoming more important than ever before. But I'm going to warn you of this one is not a panacea. So now I want to get a little bit deeper into the big three sales roles of the future. Now there's a lot of different jobs within these, but we've got inside sales field sales and hybrid. Let's talk about the inside sales role first. As we've already discussed, that whole center of excellence that is continuing to remain in flux, we know that geographic boundaries matter less so these people can successfully work from home. We know that the talent pool has already opened up. So companies looking to hire inside sales roles, which previously was an entry level position in many, many companies, now they can look at hiring people with a lot more experience. Experience. And we know as a result of those top three things, people working from home, they're more experienced in selling, they've got a lot more skills, there's a lot bigger talent pool that companies can source from productivity is up. So what do you need to know about these new inside sales roles? You as thinking about this within your own organization. Well, one thing that we're hearing from sales leaders, the role that they're most focused in filling or the job that they're most focused on filling for inside sales is someone that can do lead generation and deal qualification. That's becoming the highest demand role. And what companies are really looking for, gosh, titles for that role might be a MDR market development rep, an SDR sales development rep, a bdr, maybe a business development rep. I just like to call them those deal generators. So, so the other thing is that remember in this particular role, if you're looking at hiring entry level, there are challenges with onboarding new hires and this entry level hires that are faced with that isolation. So there's a challenge if they don't have an office to come into, and there's a challenge with getting them trained up appropriately when you're just doing that virtually. Career creating a career progression for this role. If truly this is going to continue to be a very high demand role. If truly you're going to get more productivity, if truly more skills are going to be required. Create a great career progression for this role. It's not just entry level. And one of the other things that we'll explore momentarily is that you'll see that the pay mix for this role is increasing. And we'll talk about that a little bit in just a moment. But new skills are also going to be required to this role. So it's taking discovery, if you will, to a new level. And what does that mean? What we know is that a lot of the entry level roles, they would be given inbound leads to follow up on. So let's say marketing created a campaign, they might be given lead lists for people that they can call. What we're finding is that now they are being asked to conduct discovery on the potential or the prospect that they'll be calling. So to discovery is being taken to a whole new level. And so is this whole inside sales role, the field sales role. We know that for many jobs in person interaction is still required. Now this can range anything from people that are required to be on site because maybe they're helping their client with, oh, I'm thinking about a field sales role right now that does a beer distribution company. And those salespeople, not only did they sell in stock the beer, they make sure inventory levels are right. They plan events for the clients. They will work with them on stocking their shelves, making sure inventory is fresh. So they really do need to be on site. And there are many other sales roles that fall into that role as well. So remember that in this role geography it could matter a bit more. And another thing, for your best salespeople, these could be the pool for the best position as you start looking to fill hybrid sales roles. But what you need to know is that new skills and training is definitely required for your field salespeople. So guys, the way that we're working it isn't going away anytime soon. And we do know that there are still some challenges with virtual selling. That can be everything from what's in back of you when you're talking to people. It's lighting, it's how you present yourself, how you talk and being natural in front of a camera, which is a challenge for many, myself included. Virtual selling and then new method problem solving. So they're going to be a new method of selling. So the way that they sold before in face to face environment, maybe it was going out to the golf course together and doing some natural discovery. There's got to be new ways of connecting to help people sell better. And you heard me talk about this sales culture. Well, one of the things that seems to be going hand in hand is companies desire to continue to aggressively push forward with outcome based or solution selling. Many of you in sales have heard this expression before. We want a solution sell, not transaction sell. So not just one product and it's a one and done. But how do we solve longer term problems for our customers? Salespeople need more training on this. It is far from complete. And just so you know, I did say that this role could be best positioned to fill hybrid sales roles. Just know that not everyone is able to or will be able to make that shift or transition to a hybrid role if that is your strategy. Now let's discuss a little bit about the hybrid sales role. And I already did define this, but I'll repeat it once again. Think about the traditional field salesperson that is now going to be spending at least half of their time, we'll call it a significant amount of time, doing virtual selling. Between virtual selling and face to face selling, they will still meet customers face to face. And this is a good piece of information for you to know. 69% of companies plan to hire field sales roles or the hybrid sales role over the next 12 months. So 69% of companies. And that statistic came from a study that we did with World at Work earlier this year that had just about 500 companies participate in it. So what are the big things that you need to know? Well, just like with the other roles, new skills and training are going to be required. Virtual selling, a new method of selling, problem solving, outcome based or solution selling. And again, not everyone is going to make the transition to hybrid if that's your strategy. So you may need to look outside of your company as well. Now let's discuss. Let's move over to the war for talent and changing expectations. So here are some of the big things that we're hearing out there. We know that for every applicant, and this number came from Robert Hap International that surveyed hundreds of companies. And we know that there are five offers for every job applicant today. So it truly is an employee's market. We know that companies are beginning to hire the best sales talent for inside sales roles. But I bet they're going to be looking for the best hybrid and field sales roles as well. We know that across all different jobs types, not just sales, that applicants are asking for job increases upwards of 20%. And I'm sure that many of you heard about the whole thing. Gosh, Fortune, Forbes, the Wall Street Journal, everybody, Pew Research, everybody's talking about geodifferential pay. And that's where as people that are familiar with that, if you work in a very expensive city like New York City for the same job in a small town, maybe in the Midwest, you will be making different base salary and that's because of the cost of living. So we're hearing that employees are beginning to push back on the geodifferentials and that's becoming a challenge as well. Companies, in the meantime, they still are under a lot of pressures to manage their expenses. Why? Because there is a shortage of talent. Because people that are applying for new jobs are asking for more for it. And there's still a lot of challenges around supply chain that's impacting what it is that people can actually sell. And this leads to some changing expectations and responses of the employee. So what companies are saying and what leaders are saying, we need to adopt pay for performance plan. And that means that your pay is highly correlated to the results that you bring in. We already discussed this corporate shift to a sales culture and we're starting to see already. And this came from our study with World at Work and is being substantiated with some interviews that we're having with sales leaders globally. We're finding that pay mixes are becoming more aggressive. And a pay mix is simply the difference between base pay and incentive pay. So I'll just give you an example. If I'm making $100 salary or $100 is my salary and I'm on a pay mix of 80, 20, that means that $80 is my base salary and $20 would be my incentive. More aggressive means that what we're seeing is that more pay is at risk. So that 80, 20 job might be 50, 50. So maybe $50 is part of my base pay and $50 I have to earn through incentive. And the newest, biggest news out there is that companies are beginning to rethink incentive compensation eligibility. So what that means is should more jobs be on an incentive where they have to they get paid for the performance and the results they bring in in lieu of a corporate bonus Based on company results, the big changes that are impacting compensation, we can kind of boil them down to three. So incentive comp is Going to be driven by your C level goals and the roles that you have in the company and the C level goals. Like what we said, building a sales culture is becoming very important. And we've already discussed emerging roles and changing roles. So before you design or redesign your incentive compensation plans for next year, talk to your company, talk to your sales leaders, understand if roles are changing, are the responsibilities changing? Are there more emerging roles that are happening? But make sure you understand them and what your company's C level goals may be as we go into the next coming year, before you design the plan to make sure they're aligned. The other thing though that is impacting incentive compensation is the thing I touched upon earlier, which is supply chain and other reasons that companies are beginning to find it more difficult to identify and understand what the target and quota should be for their organization. And that just means that companies have less certainty as to what they're actually going to say. So all of these things are usually connected to the plan itself and one really feeds into the other. So it all starts with the roles and the C level goals and then the plan pays out based on the target and quotas that are being set. So with those challenges, it's causing some challenges with the plan designs themselves. Challenges to the plan and things that we're seeing some changes to incentive compensation and things that we're seeing increasing pay levels. So the target pay is increasing as people are demanding higher pay, we've got these more aggressive payments. As I already mentioned, we're seeing that plan thresholds are on an increase and a plan threshold is just at the point how much is sold before the incentive begins to pay out. And then we're starting to see because of these quota setting challenges, individual and team targets are showing up in the plans. Now, usually with a salesperson individual, we like to tie the results to that individual. But because of these quota setting challenges, we're starting to see plans come off that have individual and team targets. So again, this building a sales culture, the emerging and changing roles that are happening as we speak and quota setting challenges are causing all these other things to change on the incentive compensation and this whole push for pay for performance plans is what's happening as we look at incentive compensation in the future. So if you're thinking which a lot of companies are, should we put more people or more roles on an incentive plan? Well, if you are thinking that we're going to encourage you to take what's called the variable pay eligibility scorecard and we happen to have one at sales globe and we're happy to send this out to you, but you want to think about these four things as you look at each role. And you need to do this in a very objective fashion. Not the people and what they're doing, but think about the role and the responsibilities. The first thing you want to look at is the interaction. So what's the level of interaction that this role has with the buyer? Secondly, you want to focus on influence. And influence just means, you know, does the role persuade or influence the decision to buy or to actually sign a contract or a deal with your company? Then there is the whole question around position. So does my role lead the engagement with a customer? Does it support? Is it just a back office role? And then finally, how does this role impact actual revenue generation? Now there's a few questions and things that you can answer as a company that help you create and understand if a role should be on an incentive plan. But these are the basics. And now I'm just going to show you an example of what one looks like in action. Now this is our example of the variable pay analyzer. So it's an example of a real client. I took out the names of the roles, but you'll see three different roles here. And there are questions that go behind these questions. But basically you'll see that each role gets scored and the scores over there that you see is, will inform should this role be on a corporate profit sharing plan team or an individual add on bonus or a incentive plan? And you'll see that on this particular role we got somebody who falls into each one of them. And this comes through just by asking those key questions that are around interaction, influence, position and results and helps you understand for your organization if a role should be eligible for incentive compensation. Now this particular example that we have here and our own variable pay analyzer is just based on our experience with organizations across the globe, many years of experience where we think these are the important criteria. However, I would encourage you to think through what the criteria may be for your organization because some of this may be slightly different. Next tip. If you're thinking, should we move to more aggressive payments, well, this is a big one and it's a tough one because when you go to more pay at risk. So we Talked about that $100 total target compensation. So I make $80 off my base pay and $20 on incentive. When you look at shifting that some people can look at, many do look at the base pay as something that creates a little bit of fear for them. And they see it as A complete takeaway and they think you're almost tricking them. Right. So you've got to really, really do a good job of, of communicating what it is you're doing and why. But let's talk about the four things you need to think about. First, if you're even considering moving to a more aggressive pay mix across some roles in your company, we have again, another scorecard that you can run. It's called a payment scorecard. This takes you through some really key questions that you need to ask yourself and criteria that help you understand what the right payment should be for a role. Secondly, if you make someone's pay more aggressive, so more pay is at risk, then you need to build more upside in the plan. Now, upside, if I said that you can earn $100, upside is if I do everything that's expected me out of my role and I earn that $100, what is there for me if I do above and beyond? So the point of excellence, what we say a rule of thumb is more risk, more reward, and incrementally more. So you need to make sure that there's upside in the plan so that people who are high performers have an opportunity to earn even more with the more aggressive payments. Thirdly, we recommend, particularly in this work environment that we're in, that you don't make any blanket roll moves. So in other words, going out there and saying, okay, everybody, we're going to go from 80, 20 to 70, 30. That's it. Well, consider starting with people that are coming in new to the role. That's one thing. Consider a transition period. Consider global impact and things like works council and one good transition plan. Four, consider low or no threshold in these plans or a floor. So a floor would be, here's the minimum, however, that everyone would earn an incentive in this new plan. And companies are using these and different techniques so that they can move to a more aggressive pay mix while still helping people feel secure that they're going to make or have an opportunity to earn at least as much as they did with the pay mix that they had prior to the change. So here are some things that you should know about payments. Behind me are some stats that you don't have to look at, but you can certainly please request the full report. But as I mentioned, we did a survey with World at Work earlier this year in 2021, and it had almost 500 companies that participated. And what we found out is that across all the sales roles, yep, variable pay is increasing as a percentage of pay. So that pay mix That I talked about, it's getting more aggressive now. It used to be that if I was a role that sells new business, so call it a hunter, we use a canine model, we call them Dobermans that are out there getting new business. If I was in that role, that typically was the most aggressive payments role out there. But we're finding that whether you are responsible for account management or you're responsible to go out there and get new business, that pay mix differential, it's becoming more narrow, so people are getting more pay at risk. And what we're finding is that new hybrid role that I talked about earlier, that particular role is being reported with having the highest pay mix. And that could be because it's a new role coming into the organization. And I'm thinking that it could be a leading indicator for where things are headed. So pay mix key considerations. You want to think about five things before you make any big pay mix changes. One, the revenue responsibility of the role, which is, is it retaining? Are they just responsible for managing existing business? Maybe they're doing back office support. Are they responsible for growing business within accounts and customers that you already have or are they responsible for going out and getting new customers? Secondly, you want to think about the impact that that person has on the sale. Very similar to the eligibility matrix. But do they support or do they directly influence the buying decision? And how do they interface and work with your customers? You also want to think about though the attributes of the sale itself. So what's the sales cycle? A long one, a short one? Is it a transactional product, one time purchases? Are you focused on outcome based solution selling, consultative selling? Think about all the different sale attributes. What are the priorities that you have that that particular role has? Is it to sell, is it to manage or is it to service your biggest customers? So what is it that your company has as the priority of that role? And then as I mentioned earlier, demand and talent. So what's the market supply out there? You want to take that into consideration and do you need any specialized talent? So again, as you think about the payments position or that I'll show you an example of in a moment, these are the five big areas that you'll be exploring and there's a lot more that goes behind it. But again, for payments, think about these five things before making the change. And here's an example of a payment. So those questions that I posed earlier, those big buckets come down to about 10 different things that you would ask about a particular role, you'd answer it and it Scores it. So we've got an example here of a role that has been scored and it had a total value of 40. And that just meant in this particular example that this role could be and should be eligible for a 6040 payments because based on the roles, the responsibilities, the influence, the sales cycle, the products and services they sell, how much time it takes and the demands of that particular role. So in summary, what have we learned today? Well, three big things I hope that you have learned. One, Sales roles are changing. New roles are emerging. You've got new skills and talent that's going to be required. Creative problem solving is really key. And virtual selling guys, we're all getting better, but we're just not there. So really focus on giving and enabling your sales team with these key skills that they need. We know that working remote, if that is the future of your sales organization, it is still not without challenges. So that whole love hate relationship, keep in touch, in tune with your employees. Understand what's working and what's not, what's working and what's not for the managers and leadership of your company. Because aligning and bringing all that together is going to be very important as you build your future of sales. And finally moving to a sales culture is becoming a C level priority. So find out if that's what the priority is for your organization because that will help drive the importance of. It has driven the importance of incentive compensation. And remember it's not a panacea. So the incentive comp, although critical it needs to be your salespeople still need to be enabled with other skills. And what you can do today boils down to just five things. Aligning with your company's C level goals. So talk to the leaders, find out what's important to them. Understand how sales roles. Please understand how sales roles may be changing for your organization as you plan your incentive compensation changes. You can conduct a rapid sales compensation assessment. Please request that from Sales Globe. We're happy to send it on. There is the eligibility scorecard for incentive compensation. If you're thinking about putting more roles on incentive, a lot of considerations there before just making the change. You can roll out a payments page positioner if you are thinking about creating different levels or changing the aggressiveness of the payments of the existing sales roles you've got. And remember, most importantly is to create a strong transition plan and communication plan and the why behind any changes that you're making and making sure people do understand how they're going to earn. Because remember this is the business of sales. So thank you so much for joining me today. I hope that you learned something and have some good takeaways. Please reach out to me directly with any questions that you have. You can connect with me on LinkedIn. I always respond and I would love to hear from you. And I'd love for you to join us on our podcast as well, the Rethink Sales Podcast. And of course, contact us if you want the payments, position or eligibility scorecards. Anything else, we would love to help you solve your biggest sales challenges.