Re: Coin operated and risk/reward
> Salespeople are largely coin operated and will find ways of maximising their income based on the incentive plans put to them - there is nothing wrong with that. Commission plans need to be designed to incentivise behaviour (and deals) which are in line with company objectives.
Exactly this.
We had an issue a little while back.
There was an option on our services that customers could take that was really expensive to manage/maintain (it never turned a profit as a result).
We got a feature out-of-the door that allowed the customer to get the same functionality in a self-service manner, whilst massively reducing our support overheads etc, and reducing the cost incurred to us to peanuts.
The challenge, though, was how to get customers off the old and onto the new come renewal time.
The business didn't want to totally withdraw option A yet, so made the decision to instead make the price very high.
We ended up with something like
Option A: $20,000/yr
Option B: $1000/yr
However, crucially, the business didn't exclude either from the sales commissions. So Sales, of course (quite predictably), started selling customers on the benefits of Option A because it significantly increased their commission payments.
Sales commission is a useful tool when wielded properly, but it has to be carefully managed to ensure it results in benefit to the company, rather than just more sales on paper.
Biting the hand that feeds IT
