Sales & Marketing Management - November/December 2007 - (Page 10)

the Pitch SALES STRATEGY A Carrot That Works Savvy sales compensation techniques can drive transparency and strategy carrot out to sales if it’s not steering them in the right direction?” Say a medical devices company introduces a new product. The sales reps don’t know much about it and are more comfortable selling the old device. One strategic solution is to devise variable commission levels for the two products—lower for the old one to disincentivize sales, and higher for the new product. “You also might want to pay higher commission levels in some territories versus others to gain market share,” Conlin says. An automated analysis of sales volumes, commissions and margins can forecast just how profitable (or unprofitable) various scenarios might be. Centive offers an on-demand subscription application called Compel that calculates commissions and bonuses, as well as provides real-time visibility into sales performance metrics. Salary.com, based in Waltham, Mass., has deployed Compel within its Salesforce.com system. At the very least, says Salary.com’s Cathy Otocka, managing director of sales operations, her company is hoping that compensation automation will add greater visibility to the process. “Historically, commission statements here were done by finance, and often a salesperson’s paycheck would hit his bank account the same day as his commission statement would arrive by e-mail,” says Otocka. “But sales doesn’t have access to finance’s applications. They’d have to take compensation on face value.” As a publicly traded company, the greater visibility afforded by automation also should help Salary.com’s Sarbanes-Oxley compliance initiatives. And Compel’s integration with Salesforce.com should leverage its CRM investment better. —Christopher Hosford ales compensation is seemingly a straightforward proposition: Dangle a few carrots, give the best sales folks a trip to Hawaii, stand back and reap the rewards. But according to Bob Conlin, it’s much more complicated than that. An appropriately constructed sales compensation program, says Conlin, chief marketing officer with Burlington, Mass.-based Centive, can help eliminate that most vexing—and divisive—issue for salespeople: Why am I receiving what I’m receiving? Moreover, he says, better strategic compensation planning can help achieve strategic marketing goals as well. But it’s seldom used that way, Conlin says. “While most companies think they’re paying their sales staff adequately, 67% of all sales vice presidents think their current commission system does nothing to drive behavior,” he says. “Why hold a S DONE DEAL A LITTLE LEGWORK GOES A LONG WAY glass would stick to the bottom and fall with a crash,” remembers owner Michael Crooks. “I got the contact’s name and number, called and introduced myself, and went through my lineup of products and just happened to mention coasters off-handedly.” The client leaped at the opportunity to replace the problem coasters with Crooks’ version—without drips and puddles, and with plenty of absorbency—and Crooks had a new and very big client. The final order: Two thousand coasters of one design for general distribution,and 160 each of three other designs packaged in gift sets, complete with coaster caddies for dignitaries and special guests. The total order was for $7,155, or 10 times Crooks’s average invoice size. Most importantly, Crooks had an opportunity to develop a long-term relationship with a large account. “To get into places like that, you have to do your homework,” Crooks observes. “Once you find out their specific program or need, you can let them know you have an answer for it.” —C.H. www.salesandmarketingmanagement.com istock photo It’s essential to find out about a potential customer’s needs before showing up with a pitch. Doing so aids the initial sale, and paves the way toward up- and cross-selling. Crooks Advertising Alliance in Leslie, Mich. followed this advice with the W.K. Kellogg Foundation, which is based in Battle Creek, Mich. and associated with big food retailer Kellogg’s. It was quite a large target client for a small promotional products company like Crooks, with advertising specialties sales volume of about $120,000 a year, and a typical invoice amount of $730. “We heard they were having problems with their promotional glazed ceramic coasters—liquid would puddle in them, and the 10 SALES&MARKETING MANAGEMENT NOVEMBER/DECEMBER 2007 http://www.Salary.com http://www.Salesforce.com http://www.Salary.com http://www.Salary.com http://www.Salesforce.com http://www.salesandmarketingmanagement.com

Table of Contents Feed for the Digital Edition of Sales & Marketing Management - November/December 2007

Sales & Marketing Management - November/December 2007 Contents Editor’s Letter Management Strategies What “Tell Me More,” Really Means Sales Strategy Marketing Management Motivation/Incentives Training Technology The Brains Behind the Brawn Are You a Bad Manager? Pipeline = Lifeline Feeling the Squeeze; The Foray Mobile Workmate; Seeking the Sights of Pittsburgh; Testing the Social Media Waters. Gadgets & Gear Books That Improve Strategic Thinking, People Skills and Sales Work/Life Take-Aways

Sales & Marketing Management - November/December 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.