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role
Characteristics of the most effective sales compensation
NYO
NYO
operational hangovers
2001 Towers Perrin
NYO
NYO
Services
Support
Communication
Development
Training
Career
development
Advancement
NYO
Commission
Incentive form
Bonus
Fixed %
versus variable
Pay levels
$
1998
Mix
Payout
frequency
Payout
Mechanics
Performance
measures:
definition
//
0%
Performance
Revenue
Volume
Profit
Market share
Performance
measures: relative
importance
Growth
Baseline
% Weight
NYO
Inputs
Performance
measures and
weights
Incentive form
Pay mix
Payout frequency
Process
Payout
mechanics
Output
TARGET TOTAL
COMPENSATION
NYO
Busines
s
strategy
Selling
roles
Inputs
Performance
measures and
weights
Incentive form
Pay mix
Payout frequency
Process
Payout
mechanics
Output
TARGET TOTAL
COMPENSATION
NYO
Competitive
market pay
Business
economics
Goal setting
Inputs
Performance
measures and
weights
Incentive form
Pay mix
Payout frequency
2001 Towers Perrin
Process
Payout
mechanics
Output
TARGET TOTAL
COMPENSATION
NYO
Competitive
Market Pay
Business
Economics
Goal-Setting
Process
NYO
10
Competitive
market pay
Revolutionary change
Business
economics
Role redefinition
Segment roles
NYO
11
What do
you want
me to do?
How will I
get paid?
NYO
12
Consultative
to long
Price is a key component of
buying process
Sales focus on generating
maximum revenue at
minimum cost
2001 Towers Perrin
NYO
13
Farmer
2001 Towers Perrin
NYO
14
Consultative
Hunter
Traditional Small
Game Hunter closing
many small deals
Relationship managers
who grow the
business with longterm customers
Farmer
2001 Towers Perrin
NYO
15
Consultative
Low %
High %
No
Yes
Yes
No
No
Yes
NYO
16
for this!
When can I order online?
Ill buy from whomever
take my business
elsewhere
NYO
17
Introduction
Growth
Hunter role is
more common
Maturity
Farmer role is
more common
Time
NYO
18
Mastery of sales
process execution
Excellent problem
solving skills
Able to use technology
to facilitate the process
Consultative
Mastery of sales
process execution
Excellent relationship-
building skills
Farmer
2001 Towers Perrin
NYO
19
Consultative
execution
Minimal to modest sales
experience
execution
Deep technical
knowledge
Significant hunter
model selling
experience
Excellent problem-solving
Excellent relationship-
skills
Able to use technology to
facilitate the process
Minimal experience
required
building skills
Deep customer/industry
knowledge
Functional management
experience
Deep industry
experience (may have
been a customer)
Farmer
2001 Towers Perrin
NYO
20
Transactional
Hunter
execution
Minimal to modest sales
experience
Drive/desire to cold call
execution
Deep technical knowledge
Significant hunter model
selling experience
Comfortable interacting
with top management
Excellent problem-solving
Excellent relationship
skills
Able to use technology to
facilitate the process
Minimal experience
required
Strong customer service
orientation
Farmer
2001 Towers Perrin
building skills
Deep customer/industry
knowledge
Functional management
experience
Deep industry experience
(may have been a
customer)
View customer senior
management as peers
S:\67022\01PPS\TOOLS\PRESENTA\NJCA Sales Comp.ppt
NYO
21
Transactional
Hunter
Mastery of sales
Mastery of sales
process execution
Minimal to modest sales
experience
Drive/desire to cold call
process execution
Deep technical
knowledge
Significant hunter
model selling
experience
Comfortable interacting
with top management
Excellent problem
Excellent relationship
solving skills
Able to use technology
to facilitate the process
Minimal experience
required
Strong customer service
orientation
Farmer
2001 Towers Perrin
building skills
Deep customer/industry
knowledge
Functional management
experience
Deep industry
experience (may have
been a customer)
View customer senior
management as peers
S:\67022\01PPS\TOOLS\PRESENTA\NJCA Sales Comp.ppt
NYO
22
Consultative
Hunter
Insurance
Agent
Major
Account
Development
Service Rep
Key Account
Manager
Farmer
2001 Towers Perrin
NYO
23
Transactional
Hunter
($$)
($$$)
Farmer
2001 Towers Perrin
NYO
24
Consultative
($$$)
Highly variable pay
High upside ($$$$)
Farmer
2001 Towers Perrin
NYO
25
Transactional
Hunter
($$$)
Highly variable pay
Highest upside ($$$$)
More performance
measures
Individual plus team
measures
Revenue and profit
Farmer
2001 Towers Perrin
NYO
26
Transactional
Hunter
Farmer
2001 Towers Perrin
NYO
27
across roles
High turnover due to below market pay levels
NYO
28
Transactional
Consultative
Hunter
Transactional
Consultative
Hunter
Sales
Executive
Blended
Sales
Role
Client
Relationship
Manager
Farmer
Farmer
Provided Focus
and Task Clarity
S:\67022\01PPS\TOOLS\PRESENTA\NJCA Sales Comp.ppt
NYO
29
monitoring
NYO
30
account acquisition
NYO
31
Target Total
Compensation
Pay Mix/Leverage
Performance
Measures
& Mechanics
Competitive with:
Technology Industry
CXO level relationship
Deep technical knowledge
50/50/200
Based on high prominence of the
hunter role
1. Deal Commission Matrix on Deal
Profitability by Deal Size
2. Quota Bonus based on annual quota
attainment
3. Deal Kickers additional incentives
for strategic imperatives:
New accounts
Team selling
Q1 business
S:\67022\01PPS\TOOLS\PRESENTA\NJCA Sales Comp.ppt
NYO
32
Target Total
Compensation
Pay Mix/Leverage
Performance
Measures
& Mechanics
Competitive with:
Technology Industry executive level
CXO level relationship
Deep customer or vertical industry
knowledge
70/30/160
Modest prominence
NYO
33
Positives
Challenges
New business at it
Some difficulty
coordinating multiple
selling resources at
same client
Attraction of hard to
find client
relationship managers
NYO
34
Top-performing selling
organizations clearly define roles
Transactional
Hunter
Consultative
Account Executive
Sales Consultant
Major Account
Manager
Farmer
NYO
35
NYO
36