You are previewing What Your CEO Needs to Know About Sales Compensation.
O'Reilly logo
What Your CEO Needs to Know About Sales Compensation

Book Description

The way a company designs its sales compensation program has a greater impact on behavior and results than any sales training, sales management method, or leadership message. Yet most senior executives fail to see the big picture, leading to fundamental misalignments between sales strategy and organizational goals. Featuring insightful interviews with Fortune 1000 C-level executives and real lessons from the field, this essential book reveals the tough questions leaders should be asking about how sales incentives drive the business. It provides valuable thought models and a Revenue Roadmap identifying the four major competency areas and 16 related disciplines that must connect for an organization to grow profitably. Last but not least, readers will find an interactive report card they can use to grade their own compensation plans. Sales compensation powers the performance of the entire business. What Your CEO Needs to Know about Sales Compensation casts a spotlight on how leaders at all levels can leverage the strategic power of incentives to reach the ultimate goals of their organization.

Table of Contents

  1. Cover
  2. Half title
  3. Title
  4. Copyright
  5. Contents
  6. Acknowledgements
  7. Introduction
  8. Chapter 1 Your Revenue Roadmap: Driving Your Sales Strategy with Sales Compensation
    1. Aligning to the Strategy
    2. The Four Layers of the Revenue Roadmap: Connecting Your Sales Strategy and Compensation
      1. Insight
      2. Sales Strategy
      3. Customer Coverage
      4. Enablement
    3. Setting Your C-Level Goals
    4. The Sales Compensation Diamond: The Facets of Evaluating and Designing a Sales Compensation Program
      1. Determine Target Pay
      2. Calibrate Pay Mix
      3. Create Upside Potential
      4. Establish Performance Thresholds
      5. Develop Measures and Priorities
      6. Define Levels and Timing
      7. Design Mechanics
      8. Align the Team
      9. Set Objectives and Quotas
      10. Institute the Governance Process
      11. Operate the Program
      12. Evaluate the Program
    5. 5 Questions You Should Ask Your Team About Sales Strategy
  9. Chapter 2 Lapdogs, Dobermans, and Retrievers: Motivating the Breed that You Need
    1. What Breed Do You Need? Aligning Sales Roles to Revenue Flows
      1. The Three Strategies for Revenue Growth
      2. Sales Roles and Their Canine Counterparts
    2. The Big Picture on Sales Roles
      1. The Six Dimensions of Sales Roles
    3. 5 Questions You Should Ask Your Team About Sales Roles
  10. Chapter 3 The Reverse Robin Hood Principle: Differentiating Top Performers
    1. The Building Blocks of Sales Compensation
      1. Base Salary
      2. Target Incentive
      3. Pay Mix
    2. The Reverse Robin Hood Principle: Upside Potential
      1. Factors Determining Upside
      2. Thresholds
      3. Thresholds Aren’t for Everyone
      4. To Cap or Not to Cap
    3. 5 Questions You Should Ask Your Team About Pay Mix and Upside Potential
  11. Chapter 4 Performance Metrics: Measure Twice, Pay Once
    1. Performance Measures3 (Cubed)
      1. Measures
      2. Level
      3. Frequency
    2. Performance Measure Pitfalls
      1. Using Measures Without Clear Line-of-Sight
      2. Measuring at the Wrong Level
      3. Measuring What Can’t Be Controlled
      4. Measuring on a Sliding Percentage Scale
      5. Using Conflicting Measures
      6. Selling Incentive Plan Real Estate to Marketing
      7. Misaligning Bookings and Billings and Losing Urgency
    3. 5 Questions You Should Ask Your Team About Performance Measures
  12. Chapter 5 Big Deals: Aligning and Motivating Strategic Account Sales
    1. Defining Strategic Accounts
      1. Sales Potential
      2. Strategic Value
    2. Understanding How the Customer Makes Decisions
      1. Centralized Process
      2. Preferred Provider Process
      3. Decentralized Process
    3. Promoting a Solution Sale
    4. Motivating Creative Sales Roles
      1. Discern Between Creativity as an End and Creativity as a Means to a Sales Result
      2. Consider Fewer Directive Incentives and More Incentives with Latitude
      3. Understand Motivators for Highly Cognitive Sales Roles
      4. Involve Creative Sellers in Creating Their Own Goals
    5. The Sales Crediting Balance
    6. Measuring Mega Deals
    7. 5 Questions You Should Ask Your Team About Strategic Accounts
  13. Chapter 6 A Quota Quandary: Setting Equitable and Profitable Sales Goals
    1. Some Challenges with Quotas
    2. The Forensics: Do You Have a Quota Issue or a Sales Effectiveness Issue?
    3. 10 Success Factors for Better Quotas
      1. See Beyond a Single Number
      2. Remember the People
      3. Involve the Right Team
      4. Don’t Get Lost in the Legacy
      5. Get a View from the Bottom-Up
      6. Move Beyond History
      7. Balance Market Opportunity with Sales Capacity
      8. Fit the Methodology to the Account Type
      9. Make Your Approach Scalable
      10. Don’t Over-, Over- Allocate
    4. From History to Opportunity
    5. 5 Questions You Should Ask Your Team About Quota Setting
  14. Chapter 7 Managing Sales Management: Understanding Roles and Rewards
    1. Sales Managers Aren’t Just Big Salespeople: What Does It Take?
      1. They Understand How to Lead
      2. They Strategize the Growth of Their Organization
      3. They Are Creative at Planning and Systematically Solving Customer Problems
      4. They Are Effective at Coaching and Developing Their Teams
      5. They Sell in the Right Places
    2. What Motivates Managers?
      1. Role and Recognition
      2. Career Map
      3. Investment
      4. Rewards
      5. Sales Compensation
      6. Long-Term Incentives
    3. A Few Sales Compensation Ideas for Sales Managers
      1. Establish Pay Mix with a Longer View
      2. Do a Simple Roll-Up
      3. Look at Team Participation
      4. Shift Measures Down the Income Statement
      5. Get Objective
    4. 5 Questions You Should Ask Your Team About Motivating Managers
  15. Chapter 8 Making Change: Communicating and Implementing the Sales Compensation Plan
    1. Change Management Key Steps
      1. Start Strong
      2. Craft the Change Story
      3. See the Organization’s View
      4. Get the Change Forecast
      5. Leverage the Learning Modes
      6. Follow the Process
    2. 5 Questions You Should Ask Your Team About Making Change
  16. Chapter 9 The Role of the C-Level: Getting Involved in the Right Way
    1. C-Level Involvement in the Sales Compensation Process
      1. Providing Strategic Direction
      2. Getting Involved in the Process
      3. Reviewing, Approving, and Supporting the Program
      4. Asking Good Questions
    2. 5 Questions You Should Ask About Your Executive Involvement
  17. Chapter 10 Your Strategic Sales Compensation Report Card: Grading Your Plan and Taking Action
    1. Grade Your Plan
    2. Time for Action
  18. Glossary
  19. Index