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March 15, 2012
Are My ‘B’ Players at Risk of Leaving Because of A Bad Sales Comp Plan?
By: Ryan Tognazzini
There is so much written about over-compensating ‘A’ players and shedding ‘C’ players, including our own blog. The middle is generally ignored. Here’s why you should care: They typically make up 60-70% of your sales force. If they leave, the future success of your sales organization is in jeopardy.
‘B’ player sales incentive plans can often be the most difficult to master. While it’s easy to overpay top performers and underpay bottom performers, getting compensation right for the middle might be the most important thing you do this year.
Why?
‘B’ players are the engine that keeps your sales organization humming. Many are on their way to becoming future ‘A’ players in your organization. Sometimes, they just need time to develop.
Tiger Woods (professionally speaking) was an ‘A’ player from a very young age. He won his first major championship at age 21. His future success on the golf course was a no brainer. Contrast Tiger with Phil Mickelson. Always thought of as a potential ‘A’ player, he was never given the ‘champion’ mantle until he won the 2004 Masters at age 34. The list of professional golfers who have followed Phil’s trajectory to stardom is lengthy, while those who were certain for stardom like Tiger is very short. If players like Phil were never given the chance to succeed, the turnover on the PGA tour would kill the fan (re: customer) base, costing players high purses and ultimately diminishing the sport’s presence. Apply this anecdote to your sales force and the risk of damaging your future success becomes tangible.
Here are 5 tips to diagnose and take action to secure the future of your ‘B’ players:
1. Do: Benchmark your current sales compensation plans.
2. Look For: ‘B’ players will typically achieve 80-100% of their annual quotas. Relative to total target compensation (TTC) they should be earning 70-100% of the plans.
3. Validate: If they are above 80% quota attainment and below 70% TTC, dig into your plans to ensure you aren’t underpaying for attainment levels. Similar to the top end, you should be paying 100% TTC for 100% quota attainment.
4. Action: Take action to remedy any inconsistencies with your plan for 2012.
5. Result: Retain the future stars of your sales force by ensuring you are paying commensurate with their quota attainment.
Key Takeaway: 60-70% of your sales force is comprised of ‘B’ players. Ensure your sales compensation plans account for ‘B’ player performance and secure the future of your next Phil Mickelson.
