Our client, a leading provider of data and analytics solutions for the legal industry, faced significant challenges with their sales incentive scheme.
Despite an increase in variable compensation payouts, their sales results were disappointing.
This situation raised two critical questions:
- Why did they end up paying more in variable compensation despite underwhelming sales performance?
- How could they redesign their sales incentive scheme to drive better results in the future?
These challenges underscored the need for a thorough assessment and strategic overhaul of the existing sales incentive framework. The software provider sought to understand the underlying issues affecting their sales outcomes and identify actionable solutions to enhance their incentive structure.
Data deep dive into performance and pay.
We uncovered key issues affecting the effectiveness of the software provider’s incentive schemes.
- Data analysis: We conducted an in-depth analysis of our client’s previous sales performance and compensation data.
- Sales manager interviews: To gain a deeper understanding of past performance and the specific needs of the sales representatives, we conducted interviews with sales managers. These interviews provided valuable insights into the practical challenges and motivational factors influencing the sales team.
- Issue-driven design: Leveraging the insights from our data analysis and interviews, we adopted an issue-driven design approach. This approach focused on addressing the identified problems and redesigning the sales incentive schemes for both new business and retention representatives.
Motivating incentive structure in line with strategic objectives.
We enhanced the effectiveness of our client’s sales incentive schemes and addressed past performance issues.
- Transparency: We delivered a comprehensive report that detailed the key issues uncovered during our data analysis and sales manager interviews. This report provided our client with clear insights into the factors contributing to previous poor sales results and high variable compensation payouts.
- New deal-based incentive scheme for retention reps: We designed an entirely new incentive scheme for retention representatives, tailored to match the transactional nature of the segment.
- Price quality metric for new business: To address the issue of high discounting behavior in the new segment, we introduced a price quality metric. This metric was designed to incentivize sales representatives to maintain pricing integrity, enhancing profitability, and ensuring sustainable sales growth.
We equipped our client with the tools and insights needed to implement a more effective and motivating sales incentive structure, driving improved sales performance and aligning compensation with strategic business goals.
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