Monday, 25 February 2013

Selling in a Aa1 economy - Changes in Selling Style - Changes in Sales Incentive Plans

"For this is the end
 I've drowned and dreamt this moment
 So overdue I owe them
 Swept away, I'm stolen" *

Our debt junkie status as a country has caught up with us. The words above come from Adele's Oscar winning hit won yesterday. They have an ironically apt resonance to last Friday's announcement.

Moody's ,the credit rating firm, said weak prospects for British economic growth, which have thrown the government's deficit reduction strategy off course, lay behind its decision to cut the rating by one level , from Aaa to Aa1.

Sterling has slipped down but the stock markets seem to have already factored in their response.

UK Exports will be helped by this but things will be tighter at home.

Adele gets the Oscar for the *Skyfall song

What could this mean for Selling in the long term ?

The economic slump brought with it  some far reaching long-term challenges for UK businesses and resulting in the sales role becoming more complex as well.

We now have new ways of working with customers, longer sales cycles and a need to shift mind sets from products to solutions.

 Organisations are keen to find new ways of ensuring the millions spent each year on rewarding sales teams and ensure they are delivering the best returns for the business.

The  Aon Hewitt Sales Compensation Survey delivers a comprehensive source of information on sales policies and pay practises across 44 organisations, 14 industry sectors and 71 unique sales compensation plans in the UK.

Only half of the companies thought their Sales incentive plans (SIP) arrangements were effective.

Over 70% plan to make further changes to their SIP in the next 6-18 months.

100% have a sales recognition programme for top performers up from 60% in 2009 – the most popular awards are free trips , followed by cash.

Fixed Pay now makes up 70% of the remuneration for account managers and sales managers. 30% from commission or bonuses.

Among sales executives, the ratio has risen from 50:50 to 60:40 as a result of an increase in fixed pay.

Duncan Brown of AON stated

 “Companies want to grow their sales in a flat economy, which is why in most sectors the incentives are to sell more."

With the shift to more online and call-centre selling, companies now need  sales professionals  who can develop relationships.

This type of relationship selling needs a different type of professional and it also means they need to pay them more fixed pay, with less reliance on variable pay or commission.

We are going to get more of a career focused rather than a commission focused team if you offer them a higher base salary and more training, development  and career structures and that is what AON are seeing.

More organisations are looking for graduates in sales roles.

 They also have clearer career and pay structures and the move away from monthly commission to annual bonuses which are more like management bonus programmes with sales as one objective but also customer service another key requirement.

"The trouble in the past is that top salespeople also tend to get the most complaints."

… The best sales incentive plans reflect a clear set of principles and link to the business strategy and structure, while being supported by world class governance and management”

 So as Adele inspires us:
"This is the end
 Hold your breath and count to ten
 Feel the earth move and then
 Hear my heart burst again
For this is the end
 I've drowned and dreamt this moment
 So overdue I owe them
 Swept away, I'm stolen
Let the sky fall
 When it crumbles
 We will stand tall
 Face it all together
Good selling to all in Aa1 UK ! :-)

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