Rewarding the Sales Rep of the Future: What You Need to Consider

Rewarding the Sales Representative of the Future: What You Need to Consider

By Mark Donnolo and Michelle Seger, SalesGlobe

Over the past year, COVID-19 has changed our lives which, in turn, has changed sales. As we’ve experienced, most reps have shifted from field to home along with 42% of the working population, trading their wingtips and in-person relationship-building for bunny slippers and remote digital connection. Inside reps, who would seem could continue as usual, have migrated from collaborative call centers to their living rooms, working from a digital distance.

Since the beginning of the pandemic, we’ve been mind-mapping the drivers of change that will impact the future of sales. From SalesGlobe’s research, Rethink Sales Round Tables, and client work, we’ve captured some valuable insight to help companies look ahead to the post-pandemic future. There are three factors for sales that will drive lasting change: Fear, financials, and expectations. Fear drove us to where we are, and it will continue to shape us. How long will the pandemic last? How will we deal with new strains? Will we ever sell face-to-face again? Financials have hit us with a massive impact to sales results. Financials will also impact companies’ willingness to bring people back to the office, because of the savings in commercial real estate expense, hurting collaboration and innovation. For sales organizations, justifying a return to the past travel and expense budgets will also be a hurdle, continuing the distancing between customer and seller. Finally, expectations of employees and sales in particular, have changed with work-at-home becoming the norm, another potential long-term detractor to collaboration.

So, who is the sales rep of the future and how should we think about sales rewards in the new world? Here are a few considerations as you think through these questions for your organization.

Understand How Your Sales Roles are Evolving.

Accurate sales role definition is the foundation for creating the right rewards. Field sales won’t go away, but in many organizations, sales roles may range from inside to hybrid to field. If your field roles are shifting toward the inside, don’t make the mistake of reclassifying them as traditional inside roles. Inside, field, or a combination are now descriptions of place, not job classifications. In our book, What Your CEO Needs to Know About Sales Compensation, we lay out the six dimensions of sales roles: sales strategy, product and service, market segment, sales process, marketing/technical/operations, and management responsibilities. These provide a great foundation for rethinking your new sales roles with a few post-COVID twists.

The successful salesperson of the future will be first and foremost a creative problem-solver for the customer. The environment will likely continue to change at a rapid pace and the business cannot know the answers to all emerging customer challenges, which requires the salesperson be effective at taking indicators, inputs, and clues and using them to solve problems rather than pitch products or solutions.

“There are three factors for sales that will drive lasting change:

fear, financials, and expectations.”

Understand the composition of field, hybrid, and inside. Traditional territory structures will become less important. This will allow the sales organization to quickly deploy to hotspots of opportunity, whether certain geographies or industries across geographies where expertise is required.

While we believe face-to-face will remain king for relationship-building and problem-solving, travel will become more selective and targeted toward ROI. To overcome the relationship gap, hybrid and inside sellers will likely be supported by enhanced backroom data mining and customer information capabilities to help them bring better insight to the customer. Consider these sales role factors to reveal your priorities for role refinement, talent requirements, and rewards structures.

Clarify Your Employee Value Proposition.

As sales roles and sales process evolve, the employee value proposition must evolve as well. Included are work style and content, career path, and recognition. With the pandemic, sales organizations were immediately launched into a new work style operating in a virtual world. A steep learning curve, isolation, and new pressures of work-life emerged. As bunny slipper fatigue wears on and reps find themselves not aspiring in their roles, the risk of voluntary turnover increases with an improving economy and potentially better prospects for career fulfillment elsewhere. Understand the new value proposition for your sales roles. What are your employee needs for fulfillment, how will they connect with one another, and what are considered motivational personal and professional development opportunities and career paths? Most visible among these are events such as president’s clubs and trips, almost all of which have postponed trips during the pandemic, pushing them to the following year. While these recognition levels may remain, consider whether the value of these events will change for your organization.

Calibrate Compensation.

In the scheme of sales rewards, compensation is the most prominent. During the pandemic, companies made their largest sales compensation shifts by adjusting performance measures to align with their new priorities of helping customers as well as selling, lowering pay entry thresholds to allow reps to earn earlier, and shifting out quotas to later in the year or adjusting them altogether. As we look ahead, here are a few possible developments.

Pay levels may shift competitively and may need to recalibrate with value. Target total compensation may shift for many organizations based on their ultimate sales roles, their sales capacity and the value they provide to the organization. For example, a field sales role converted to an inside role will have greater geographic reach, higher efficiency of contact, and more selling time than it did in its field-only mode. However, its average revenue per sale may not be at the same level based on the offers it sells and its ability to solve problems and convey value to the customer. These puts and takes have to be considered to ensure the company aligns rewards with value. On the cost-of-living and pay competitiveness fronts, with work-from-anywhere policies, organizations have to consider their policies of paying big city compensation for employees who have exited the city for lower cost areas. These factors, as well as potential post-pandemic turnover and movement of salespeople to companies with greener pastures, mean that traditional off-the-shelf pay surveys will become quickly perishable and rewards professionals will need to look to more timely Rapid Insight surveys directly targeting their markets.

Along with pay calibration some companies are shifting pay mix to more aggressive higher-incentive mix to emphasize performance over fixed costs and provide greater upside in return. These greater upsides are also designed to help attract top talent. In these cases, companies may be sharing some of the future risk and upside reward of an uncertain new sales environment with their sales teams. Within that incentive pay, we are seeing a continuing shift toward fewer performance measures with revenue as the primary measure depending on the role. This gives sales teams greater clarity on revenue as a priority and the flexibility to deliver that revenue in whatever product and customer combination necessary in the environment ahead.

The Bottom Line.

Putting it together, being proactive about understanding who your organization’s sales rep of the future is will put you in the direction of the right rewards solutions. When solving your sales rewards challenge, don’t ask what other companies are doing. Ask what your vision is for your future sales organization around roles, value proposition, and compensation to align with what your customer needs. Know your sales rep of the future.