It’s 1:00pm. You have scheduled a meeting to review your annual objective of driving greater sales efficiency. The goal is simple: improve revenue per sales head. Your solution is to increase available rep selling time by eliminating wasted activity. A colleague tries to sneak in after the meeting has already started. You are left with a dilemma. Either stop the meeting to provide a recap to the latecomer or ignore the latecomer, knowing they will miss valuable information that will directly impact others in the organization. Does this sound familiar?
If so, you know the outcome: an unproductive meeting.
Now, the impact is minimal when the meeting consists of only a few people. However, as the number of people or frequency increases, the impact of these unproductive meetings becomes greater—both from a cost and revenue perspective.
And whether your team is closing in on another successful year or looking to rebound after a disappointing finish, sales leaders are alike in their thinking this time of year. They are thinking about the mouthwatering turkey, the Thanksgiving slate of football games, or last-minute shopping for the family. And yes, the annual sales kickoff that will take place when everyone returns from the holiday break.
When executed properly, the sales kickoff helps position companies to make their number in 2020. When executed poorly, the result is an unproductive meeting where millions are invested with no discernible impact—and a high probability of missing your number next year.
The Why Behind Sales Kickoffs
A sales kickoff meeting is an annual event used to align the company and sales strategy. Sales reps see how they are measured and how their performance impacts the larger organization—while also receiving educational material on best practices, product updates, and customer feedback.
The sales kickoff meeting represents a big investment. The average travel and production cost on a per rep basis is $2,000. After adjusting for the opportunity cost of removing reps from the field, the average cost more than doubles to $5,000.
You know you must do it—but you want results. Best in class organizations (“Leaders”) treat SKO differently than their peers (“Laggards”) to maximize their return on investment.
SBI has created this Acceleration Summit Toolkit to help you before, during, and after your event.
Sales Kickoff Meetings – Are You a Laggard or Leader?
Over the years, SBI has attended hundreds of kickoff meetings. Our research reveals that average and laggard organizations are heads down thinking about how the event will look. They are determining the unique theme, venue, keynote speakers, and what “swag”—company branded t-shirts or bags—they will give out.
Market leaders have already determined this. They already know next year’s organization structure and design. They understand what customers and prospects are most likely to generate the most revenue.
Now, they are working on territories, quotas, and compensation plans and stitching these together. There is a right time (sales kickoff) and the wrong time (March) to distribute this content.
Refer to Sales Kickoff is Dead, and executive brief written by SBI’s Fred Penteado, to understand the seven deadly sins of kickoff events, and how you should think about SKO in the future.
Sales Kickoff – Are You Behind Already?
A recent study revealed that 57 percent of firms believe compensation plans, and quotas are delivered too late. This resulted in an unhappy sales force and increased rep attrition. An organization that is unable to attract and retain its top talent is hard-pressed to achieve plan.
How do you become part of the 43% of organizations that are delivering these materials on time? SBI recommends a four-phased approach that typically takes 10-12 weeks to complete. It is encouraged that organizations start the process towards the end of Q3. This allows ample time to make final adjustments and close the fiscal year strong.
- Phase 1: Current State Assessment – Are the plans aligned to the overall strategic objectives? Do they drive the right behavior? Do reps understand the plan? Do they like it? Align pay levels and pay mix to market to attract and retain top sales talent. Ensure the plans adequately reward top performers, and enough reps are at or above target.
- Phase 2: Direction Setting & Plan Design – Develop compensation plans that drive the desired sales behavior. Conduct backwards and forwards modeling to understand cost at different performance levels. Determine the impact of compensation plans to top performers to mitigate the risk of unwanted turnover.
- Phase 3: Quota-Setting & Territory Design – Create territories that are balanced in terms of accounts, revenue potential, and earnings opportunity. Determine how many accounts reps can handle using workload capacity models. Ensure enough quota is allocated to the field to achieve the Board plan.
- Phase 4: Communication & Implementation Planning – Develop communication materials to facilitate manager and rep conversations. Materials should include plan documents, compensation calculators, and FAQ sheets.
The result is compensation plans that align with the market and best practice. These plans:
- Align with business objectives and sales strategy
- Drive growth through existing customers and new business initiatives
- Reflect business, job role, and geographic differences
- Provide competitive market pay to attract and retain top sales talent
- Give reps control over earnings and are easy to understand
Equally important, the compensation plans will drive the desired rep behavior and create greater focus—the result, improved revenue per sales head, and greater sales efficiency.
Don’t Risk Being Left Behind
The internal and external pressures to make your number have never been higher. Companies expect year-over-year improvement in revenue, while also realizing a reduction in sales expense. These financial targets are often difficult to achieve—and can feel impossible.
There’s an adage that states, “if you’re early, you’re on time. If you’re on time, you’re late. If you’re late, you’re left behind.” Whether it’s an outing with a client or planning the sales kickoff, your punctuality says a lot about you and your organization—and can be the difference between missing and making your number.
SBI is a firm comprised of former sales, marketing, and operation leaders that have been through the planning process before. We have experience in various aspects of the planning process. Call us today for assistance with account segmentation and prioritization, sales coverage, organizational structure, compensation design, and quota-setting. SBI’s Acceleration Summit Toolkit will keep you on track and maximize your return on investment.