What Motivates a Sales Force? Patrick Mosher Global Lead Sales Talent Management Accenture Jason Angelos Global Lead Incen...
Driving behavior within intended performance guardrails… Avoid Acquiring New Customers Because it Wastes Too Much Time (Or...
Behavior, and their gaps, are driven by only three factors:  Ability, Motivation, and Context. BEHAVIOR Effectively target...
“ Chalk Talk” Building a Performance Architecture <ul><li>BEHAVIORS </li></ul><ul><li>Generate and qualify leads </li></ul...
Increasing Behaviors “Within the Guardrails” The probability if… I extend the  Effort ,  that I will attain the  Performan...
Aligned Behaviors Drive Leading Indicators  Leading  Indicators Lagging  Indicators Real Time  Indicators <ul><li>Potentia...
Keys to managing incentives in a broad sales performance context <ul><li>Traditional incentive measures use lagging indica...
The end goal: A holistic approach to managing sales performance can “move the middle” 10% People Performance 70% of Sales ...
 
Financial Impact of Moving the Middle +$1B Why does shifting the curve matter? Shifting the performance curve creates meas...
<ul><li>Extra Slides </li></ul>
Executives recognize that customer facing workforces play a prominent role in the company's overall success. <ul><ul><li>S...
Executives in Leading organizations are focusing on REVENUE GROWTH and Sales Force is a primary driving force . Source: CS...
Growth comes with unique People Challenges … <ul><li>FLASH !!! </li></ul><ul><li>Nearly three quarters of CSOs say that th...
The Goal:  Transform Sales Force Behaviors Sales Force Transformation must fundamentally change the interaction between th...
Sales Force Key Performance Objectives Revenue  Enhancing Cost  Reducing Forecast  Predictability 5 4 3 2 1 2. Sell More t...
Targeting Value in Sales Transformation Shareholder Value Increase  Revenue Decrease  Cost Improve  Predictability Levers ...
Driving Value through Targeted Sales Force Behaviors Shareholder Value Increase  Revenue Decrease  Cost Improve  Predictab...
Effective ICM for agents and employees provides the platform to support desired behavior and enable high performance sales...
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What Motivates A Sales Force

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presented at TrueConnection: Sales Performance Management Conference 2007 by Patrick Mosher and Jason Angelos, Global Practice Leads at Accenture

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  • Really excellent !!!!Kuddos
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  • Transcript of "What Motivates A Sales Force"

    1. 1. What Motivates a Sales Force? Patrick Mosher Global Lead Sales Talent Management Accenture Jason Angelos Global Lead Incentive Compensation Management Accenture
    2. 2. Driving behavior within intended performance guardrails… Avoid Acquiring New Customers Because it Wastes Too Much Time (Order Taker) Balance New Customer Acquisition While Retaining Old Customers (Hunter and Farmer) Focus on New Customer Acquisition at the Expense of Existing Customers (Existing Customer Sat Erodes) (Bounty Hunter) Sell too few Units with Focus on High Profitability (Volume Erodes) Sell Volume at Reasonable Discounts (Balanced Results) Sell Too Many Units (Margins Erodes) Too Much of a Good Thing Too Little of a Good Thing Just Right Participation (n=1) No Participation Rush the Stage Illustrative
    3. 3. Behavior, and their gaps, are driven by only three factors: Ability, Motivation, and Context. BEHAVIOR Effectively target, define, and run loyalty campaigns Context and Tools Motivation Ability Right Skills to Perform Target Behaviors Right Knowledge to Perform Target Behaviors Right Person into the Right Role Right Work Assigned to the Right People Right Performance Specified and Measured Incented to show Target Behaviors Right Information to Support Target Behaviors Right Tools to Easily Access Information Right Place at the Right Time to Exhibit their Target Behaviors Motivated to show Target Behaviors
    4. 4. “ Chalk Talk” Building a Performance Architecture <ul><li>BEHAVIORS </li></ul><ul><li>Generate and qualify leads </li></ul><ul><li>Visit qualified leads </li></ul><ul><li>Establish rapport with new customers </li></ul><ul><li>METRICS </li></ul><ul><li>Customer Churn </li></ul><ul><li>Market Share </li></ul><ul><li>Revenue Mix (new vs. existing customers) </li></ul><ul><li>MOTIVATION CAPABILITIES DRIVE BEHAVIOR </li></ul><ul><li>Performance Definition and Objective Setting </li></ul><ul><li>Effective Incentive Design </li></ul><ul><li>Valued Rewards </li></ul><ul><li>Performance Feedback Systems </li></ul>PREDICTABLE BEHAVIORS DRIVEN BY.. KPOs ATTAINED BY PREDICTABLE BEHAVIORS… SUCCESS MEASURED BY… Key Performance Objective Example: Acquire New Profitable Customers (growth) B
    5. 5. Increasing Behaviors “Within the Guardrails” The probability if… I extend the Effort , that I will attain the Performance Objective Motivating a Person to a Performance Objective depends on… The probability if… I achieve the Performance Objective , that I will receive the Reward How much I Value the Reward
    6. 6. Aligned Behaviors Drive Leading Indicators Leading Indicators Lagging Indicators Real Time Indicators <ul><li>Potential Leading Indicators </li></ul><ul><li>Training Taken </li></ul><ul><li>Account Plans Completed </li></ul><ul><li>Opportunities Weighted </li></ul><ul><li>Leads Qualified </li></ul><ul><li>Deal Velocity </li></ul><ul><li>Close Rate </li></ul><ul><li>Goals Set </li></ul><ul><li>Rewards Attached to Goals </li></ul><ul><li>Lagging Indicators </li></ul><ul><li>Sales Results </li></ul><ul><li>Incentives Paid </li></ul>Correlates With Correlates With Integrated Systems Effective ICM Systems You Are Here
    7. 7. Keys to managing incentives in a broad sales performance context <ul><li>Traditional incentive measures use lagging indicators and don’t consider sales performance in context </li></ul><ul><li>Moving leading indicators requires timely insight to upstream behavior measurements in addition to traditional sales results </li></ul><ul><li>Staying within the Behavior Guardrails requires you to correlate behavior drivers – with their associated leading indicators -- with lagging measures. </li></ul>
    8. 8. The end goal: A holistic approach to managing sales performance can “move the middle” 10% People Performance 70% of Sales Force 20% 10% Low Core High 10% Curve Shift 10% Curve Shift
    9. 10. Financial Impact of Moving the Middle +$1B Why does shifting the curve matter? Shifting the performance curve creates measurable business value on all fronts, especially for core performers. $300M $750K 30% = $3B 400 High Performers (Top 20% contribute 30% of revenue) $650M $460K 65% = $6.5B 1400 Core Performers (core 70% contribute 65% of revenue) $ 50M $250K 5% = $500M 200 Low Performers (bottom 10% contribute 5% of revenue) Total Increase in Revenue @ 10% Shift Revenue Increase per Rep @ 10% Shift $10B Sales Revenue / Performance per Group 2000 Reps
    10. 11. <ul><li>Extra Slides </li></ul>
    11. 12. Executives recognize that customer facing workforces play a prominent role in the company's overall success. <ul><ul><li>Sales Force tops the list for the FOURTH consecutive year </li></ul></ul>Source: High Performance Workforce Study, 2003, 2004, 2005, 2006; Interviews with CEOs, COOs, and senior vice presidents conducted by Accenture 0% 10% 20% 30% 40% 50% 60% 70% Logistics Training & Development Manufacturing R&D IT Human Resources Engineering Marketing Strategic Planning Finance Customer Service Sales Percentage of executives citing each function as one of their company's three most important
    12. 13. Executives in Leading organizations are focusing on REVENUE GROWTH and Sales Force is a primary driving force . Source: CSO Insights, Sales Performance Optimization, 2006 0% 10% 20% 30% 40% 50% 60% 70% Other Decrease Discounting Reduce Administrative Burden Improve Communications Improve Team Selling Increase Channel Sales Effectiveness Improve Margins Reduce Sell Cycle Time Improve Customer Loyalty/Satisfaction Increase Market Share Increase Sales Effectiveness Increase Revenues Percentage of CEOs citing each objective as one of their company’s three most important.
    13. 14. Growth comes with unique People Challenges … <ul><li>FLASH !!! </li></ul><ul><li>Nearly three quarters of CSOs say that their sales force must increase by 10 percent or more over the next twelve months. </li></ul><ul><li>Does your headcount growth match your revenue growth plans? </li></ul>Voluntary Turnover Involuntary Turnover <ul><ul><li>FLASH !!!! </li></ul></ul><ul><ul><li>Sales Force attrition is decreasing, but it continues as a major challenge with about 35% attrition and involuntary turnover of 16.7 % in 2006 </li></ul></ul><ul><ul><li>Do you know your turnover rate? Is compensation the root cause for voluntary turn? </li></ul></ul>Source: CSO Insights, Sales Performance Optimization, 2006 Planned Changes in Sales Force Size Increase by 11-20% (20.0%) Decrease in Size (2.4%) Remain the Same (26.6%) Increase by 10% or Less (34.0%) Increase by 21-30% (7.0%) Increase by >30% (11.3%) Salesforce Annual Turnover Rates 2004 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2005 31.6% 17.7% 20.4% 17.8% 18.3% 15.7% 2006 50%
    14. 15. The Goal: Transform Sales Force Behaviors Sales Force Transformation must fundamentally change the interaction between the Field Sales person and the customer. Fundamental Unit of Transformation Aligned and Consistent Customer Interaction Target Behaviors Across whole Sales Force = Imagine if … All 15,000 Sales Reps exhibit target behavior set XYZ for a customer situation XYZ. No guessing. No interpretation.
    15. 16. Sales Force Key Performance Objectives Revenue Enhancing Cost Reducing Forecast Predictability 5 4 3 2 1 2. Sell More to Existing Customers 4. Improve Product / Solution Pricing 5. Maximize Return on New Product Launches 3. Retain Profitable Customers Longer 9. Reduce Customer Acquisition Costs 8. Decrease Direct Selling Costs 1. Acquire New Profitable Customers 12. Improve Sales Forecasts 10. Decrease Sales Operations Costs 6. Sell Most Profitable Services/Products 7. Sell Ongoing Service/Maintenance 11. Win the War for Sales Workforce Talent Grade your Selling Organization 13. Increase Consistent Use of Sales Methods/Tools
    16. 17. Targeting Value in Sales Transformation Shareholder Value Increase Revenue Decrease Cost Improve Predictability Levers Performance Objectives Sell More to Existing Customers Improve Product / Solution Pricing Retain Profitable Customers Longer Reduce Customer Acquisition Costs Decrease Sales Operations Costs Acquire New Profitable Customers Improve Accuracy of Sales Forecasts Maximize Return on New Product Launches Decrease Direct Selling Costs Increase Consistent Use of Sales Methods/Tools Sample Metrics <ul><li>Customer Churn </li></ul><ul><li>Market Share </li></ul><ul><li>Revenue Mix (new vs. existing customers) </li></ul><ul><li>Average Revenue and Margin Per Customer </li></ul><ul><li>Average Number of Products Per Customer </li></ul><ul><li>Revenue Mix (new vs. existing customers) </li></ul><ul><li>Sales Cycle Time </li></ul><ul><li>Average Customer Satisfaction Score </li></ul><ul><li>Average Length of Customer Relationship </li></ul><ul><li>Average Customer Life-time Value </li></ul><ul><li>Customer Attrition Rate </li></ul><ul><li>Average Discount Per Order / Deal </li></ul><ul><li>Average Margin Per Order / Deal </li></ul><ul><li>Brand Affinity </li></ul><ul><li>Reach and Frequency </li></ul><ul><li>Campaign Response/Closure Rate </li></ul><ul><li>Percentage of Revenue from New Products </li></ul><ul><li>Expense to Revenue Ratio </li></ul><ul><li>Span of Control </li></ul><ul><li>Time off Territory </li></ul><ul><li>Average Acquisition Cost </li></ul><ul><li>Campaign Response Rate </li></ul><ul><li>Marketing Return on Investment </li></ul><ul><li>Expense to Revenue Ratio </li></ul><ul><li>Direct Sales to Sales Support Ratio </li></ul><ul><li>Span of Control </li></ul><ul><li>Forecast Accuracy by Quarter Quartiles </li></ul><ul><li>Number of customer contacts </li></ul><ul><li>Customer facing contact time </li></ul><ul><li>Administrative burden </li></ul>Illustrative Win the War For Sales Talent <ul><li>Attrition Rates </li></ul><ul><li>Time to Proficiency </li></ul><ul><li>Days Open Positions </li></ul><ul><li>Onboarding Costs </li></ul>Sell Most Profitable Products/Solutions <ul><li>Product Quota Attainment </li></ul><ul><li>Margin Generated by Rep </li></ul>Sell Ongoing Maintenance / Service <ul><li>Service Contracts Closed </li></ul><ul><li>Number of Cross-Channel Leads Generated </li></ul>
    17. 18. Driving Value through Targeted Sales Force Behaviors Shareholder Value Increase Revenue Decrease Cost Improve Predictability Levers Performance Objectives Sell More to Existing Customers Improve Product / Solution Pricing Retain Profitable Customers Longer Reduce Customer Acquisition Costs Decrease Sales Operations Costs Acquire New Profitable Customers Improve Accuracy of Sales Forecasts Maximize Return on New Product Launches Decrease Direct Selling Costs Increase Consistent Use of Sales Methods/Tools Sample Sales Force Behaviors <ul><li>Target the right customers to visit </li></ul><ul><li>Articulate Value Proposition aligned to customer needs </li></ul><ul><li>Effectively Handle concerns of long-term customers </li></ul><ul><li>Convert customer’s discussion on price/cost to discussions of value </li></ul><ul><li>Clearly articulate value proposition for new products/services </li></ul><ul><li>Reduce time spent on administrative activities </li></ul><ul><li>Prioritize customer activity to focus on hottest opportunities </li></ul><ul><li>Apply Sales Methodologies and Processes consistently </li></ul><ul><li>Maintain accurate sales pipeline information </li></ul><ul><li>Apply CRM Tools effectively </li></ul>Illustrative Win the War For Sales Talent <ul><li>Coach junior sales reps </li></ul>Sell Most Profitable Products/Solutions <ul><li>During customer interactions Seamlessly introduce the value of most profitable product service </li></ul>Sell Ongoing Maintenance / Service <ul><li>Collaborate effectively with Service organizations on post sales activity </li></ul>
    18. 19. Effective ICM for agents and employees provides the platform to support desired behavior and enable high performance sales. Clear, Timely Plan Setting <ul><li>Standard, streamlined and integrated plan setting processes </li></ul><ul><li>Iterative plan setting process allowing agreement, not just acceptance </li></ul><ul><li>Training to ensure DM/AE and Agent understanding of plans and related compensation goals </li></ul><ul><li>Web-based visibility to incentive results on a daily basis </li></ul><ul><li>Self-service portal for earnings estimation, claims, and inquiries </li></ul><ul><li>Dashboard reporting capabilities to DM on aggregate performance </li></ul><ul><li>“ What If” scenarios to model outcome of potential sales opportunities (e.g., cross-sell, gain market share, etc.) to create recovery plans </li></ul><ul><li>DM/AE coaching and Playbooks leveraged to drive performance </li></ul><ul><li>Trace payments to specific transactions </li></ul><ul><li>Minimize inaccurate payment through integration of sales crediting process and HR systems </li></ul><ul><li>Consolidated sources for data feeds to reduce data discrepancies </li></ul><ul><li>Automated workflow system for submitting, reviewing and settling manual claims & payment disputes </li></ul>Accurate, Real Time Performance Reporting Timely, Accurate Payment

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