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October 2013

Five Ways You Can Manage Risk in Your Compensation Plan

Cabrera_newToday's blog post is by Christopher Cabrera, CEO of Xactly Corporation, the industry leader in sales compensation automation.


In the past, managing risk was a topic that flew under the radar in the sales-compensation world. Today, experts in the field are bringing the topic to light. Managing risk is no longer just an abstract idea; it’s a mind-set that must be applied to the entire sales-compensation system. So how can you avoid leaving your company vulnerable to unforeseen costs, turnover, and uncertainty?

1. Analyze sales crediting.

In order to manage risk in your compensation plan, sales-credit rules must be examined carefully. When Xactly analyzed existing sales-comp data, we found as many as 160 commissions being paid out on one deal! This is a big problem. The cost is excessive, and if the company is still calculating compensation on spreadsheets, the true, comprehensive cost of the deal is likely not understood.

Get a read on your current crediting status by asking these questions:

  • Does the type of product sold change the amount of credit that’s given?
  • Does the type of customer alter the amount of credit given?
  • How much credit does each role receive?

2. Ensure that governance is in place.

Governance gets a bad rap in the field, but if you’re tightening your operation, governance has to have a part. To implement it properly, departments need to come together and communicate with one another. Human resources, sales, finance, and legal all need to be invited to the party – and they need to mingle.

Finance leaders claim they’re paying too much; sales reps say they’re not getting paid enough. With governance and an on-demand compensation solution, these communication issues are eliminated, and all departments can learn to play nice.

3. Use a plan-effectiveness metrics tool.

A tool to look at the analytics of geography, position, business unit, performance distribution, and pay differentiation is imperative. This will give you rich information so you can discern what’s working and what’s not in your incentive-compensation plan. It also provides insight into the financial and behavior risks your company could be facing.

4. Use an incentive system instead of a reward system.

How can you tell the difference? In a reward system, you hand a rep money and say, “Thank you for working hard.” The end.

In an incentive system, compensation drives behavior. Sales reps will look at the plan and modify how they sell, where they sell, and to whom they sell in order to be compensated accordingly.

5. Spot red flags.

Do any of these scenarios sound familiar? Your company is making money, but your reps are coming up short. Quota attainment is lagging. There’s an elevated rate of turnover.

These low-level problems are indicators of stormy weather ahead. Signs like these indicate issues that need to be remedied and the need to adjust your sales-compensation plan. Higher-level problems would include unhealthy levels of channel conflict, rising cost of sales, and poor turnover management.

Remember that managing risk is a team effort. It takes communication, teamwork, and the engagement of human resources, finance, and sales to do it effectively.

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Let's Stay Positive On Social Media

Since my wife, Laura, and I founded Selling Power in 1981, it was our objective to create a positive platform for the professional sales community. So imagine my surprise when this tweet from a sales consultant appeared on my timeline: 




The 18 characters “Totally disgusting!” sounded like an alarm. But what’s alarming is the complete inaccuracy of the tweet and the harm it caused to us. After working diligently for over thirty years to serve the professional sales market, I was – and am – alarmed that anyone would send such a thoughtless and malevolent message. But that’s the downside of social media.

That tweet was fired off prematurely. At the time, the conference speaker line-up and the agenda was still a work in progress. Of the final 26 speakers, our sponsors selected 14 and of the 10 remaining speakers that we selected, 5 are women.

In the years we’ve been publishing Selling Power, we’ve reached out to the sales community to cover every innovation and tried to keep ahead of the market. One of the areas we began covering back in the mid ’80s was women in sales. We profiled or interviewed many who’d made a significant contribution either to sales or to motivating others to succeed, including (and here I list only a few because to list them all would take up the rest of this post) Mary Kay Ash, Venita Van Caspel, Meg Whitman, Anne Mulcahy, Danica Patrick, Maria Sharapova, Mary Lou Retton, Jackie Joyner Kersee, Oprah Winfrey, and many others. We also profiled many women sales managers and reps who were doing well in the field. In fact, we wrote our first cover story on women in selling in 1983. Who else was doing that?

Our company, Selling Power Inc. employs more women than men. Over 2/3 of our staff are women. My wife is the editor of Selling Power magazine, one daughter is the editorial director and another daughter is VP of Sales and Marketing and she also runs our Sales 2.0 events serving over 2,000 sales leaders in four different locations in the US and the UK. I don’t have the slightest bias against women, and I would not want my daughters or wife to be discriminated against. The ratio of women to men running our Sales 2.0 events is 90% to 10%. 

Staying Positive

It’s easy to fly off the handle, tap out 140 characters, besmirch someone’s good name and efforts, all in order to get some attention or a reaction. After all the hard work we have done to support the entire sales expert community, it’s dissappointing. And does no good for the sales community. We’re about building, not tearing down. We’re about staying positive in the face of adversity, not dragging people into a  muddy bog.

Within days of Jill’s first tweet, a number of women sales trainers, consultants and authors joined her crusade, not knowing that the conference agenda was incomplete, and not knowing that our hands are tied when our sponsors decide who in their company, or of their customers, would be best suited to represent them and provide useful insights to the audience. 

Jill Konrath founded the group of 30 women sales experts some time ago with the goal to “share news.”


In the past we have offered a number of Sales Shebang members free passes to our events and shared their expertise with our Selling Power audience in print and online. Two Sales Shebang members have previously spoken at our events, and a third is joining us at the upcoming event.

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I have had the privilege of contributing and working with some of the most amazing women in America like Oprah, Hillary Clinton or Mary Kay Ash and I deeply appreciate their contributions to our world.

Do we withhold our support of women for any reason? 

Jill Konrath admitted in her email that she’d held a grudge against Selling Power magazine because seven years ago, we researched and featured the top earning sales keynote speakers and all of them were men. Jill wanted to see us feature more women sales speakers. Any magazine subscriber can go online and within minutes find that Selling Power has written about Jill Konrath and her work at least ten times in the past ten years. (Search “Jill Konrath” on

What’s really behind all this brouhaha?

Jill Konrath is a respected thought leader in the field of selling. She has written books that have helped thousands of salespeople improve their professional skills. We also share her view that not enough women get promoted in corporate America and we agree that we are going through a period of equalization. As more women move up to sales management, American business will grow, sales will improve, and the power of women will rise. I applaud her vigilance and I’m glad we were able to correct the initial misperceptions that started this whole tweet-o-rama.

So here is the happy ending. A 140-character peace offering from Jill Konrath that was tweeted yesterday:


I think the US Government should take as an example how regular people can figure out how to reach across the aisle to resolve differences. We need more thoughtful, positive resolutions in this world where it’s easy to tear things down, but difficult to build something of value. That’s what we’ve always tried to do at Selling Power and that’s what we’ll continue doing in the future.

I’d love to hear your thoughts.

P.S. I hope to see you at the Sales 2.0 Sales Performance Management Conference in San Francisco, Oct 16-17. It’s not too late to register today. As a way of thanking you for reading all the way to the end I am offering you this special discount code SPMCircle to get 50% off.

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Seven Strategies for Maximizing Account Success

Today's blog post is by Ron Snyder and Marty Levy. Ron Snyder is the President of Plan2Win Software. Marty Levy has held various VP of Sales positions in Silicon Valley companies.   

One of the most important sales battlefields is the account. Winning an account is more than winning a deal.  In account management, you are seeking to earn a position of trust that enables you to grow and build your business over an extended period of time. Maximizing your share of the dollars each of your most important accounts spends in your product/service area is a key driver of overall sales success.

The strategy decisions you make that position you to participate in and win an ever-increasing share of your customer’s business are critical.  Account managers should carefully choose the strategies that will, over time, yield the maximum results.

There are seven fundamental account strategies. To select the best approach in each case, you must analyze your position in the account, the account’s needs, and the competitive situation. This gives you the highest probability of success and optimizes your use of time and resources.

One of these strategies will be primary in your approach with an account.  You may also consider applying more than one of these in combination with your primary strategy in more complex or changing account situations.

  1. Defend and Grow
  2. Land and Expand
  3. Direct Attack
  4. Niche
  5. Change the Game
  6. Maintain and Support
  7. Develop Over Time

1. Defend and Grow

When you are established in an account, it is critical to defend your base so that you do not lose account share, future revenue potential, or influence in the account. From a strong account position, you build on your successes and promote the impact they have had on your customer’s business.  In defending your base, you are establishing a foundation from which you expand your presence and increase your share of wallet (the percentage of dollars spent in your area of expertise) at the account. Use this strategy to grow your business by mounting sales campaigns designed to expand your position in the account into other business units, functional areas, and departments.

2. Land and Expand

This strategy is used in accounts where you do not have an established position. Here, the objective is to win the first piece of business, creating a foothold in the account, and use that foothold to expand. It is critical to make this installation/use of your product or service successful. Then use this success to expand to other users, business units, functions, departments, etc. in the account. Ensure that early users achieve maximum benefit from your product or service, and communicate those successes. Use the benefits gained and referrals by that set of users to establish a strategic position that supports your expansion effort with others in the account.

3. Direct Attack

This approach is used for capitalizing on a strong market or technical position or for displacing a competitor. You must determine your significant advantage and build an account plan that delivers the benefit of your advantage to your account. Knowing your account’s needs, business goals, and priorities is fundamental to the effective use of this strategy. These account scenarios typically pit you directly against your competition. Effective and intensive use of your company’s resources and external resources is necessary to win the deal and ensure a strategic position.  Focus, engage, and attack the account’s needs for which you have a significant competitive advantage.

4. Niche

The objective is to demonstrate that you are the expert or leading provider of solutions for a specific problem, industry, or vertical market. Here, your company and solution address a clearly defined, often narrowly focused need or problem. You target a specific area within the account, such as one business unit, function, department, or even individual. To manage your resources effectively, it is especially important here that you focus on only those accounts that match your target account profile.

5. Change the Game

Bringing to your account unique insight on a business issue or industry dynamic will provide the opportunity to change the game to your advantage. Changing the way your account views its needs and how to solve them is your objective. This strategy dramatically builds your credibility as a trusted source of valuable perspective in your domain and weakens your competition’s position. Thus, it makes it much easier to become the preferred provider of the solution, regardless of your previous position at the account. As long as key decision makers can be influenced to agree with your perspective, you become the only choice.

6. Maintain and Support

If you have no significant new growth opportunities, then applying substantial resources to win marginal new business opportunities is not justifiable. Identify objectives for the account that maintain current business levels without overcommitting your resources in pursuing marginal incremental revenue. Your objective is to maintain a reasonable level of business with the most cost-effective deployment of resources.

7. Develop Over Time

In this scenario, the account has the potential to be very important to your business; however, there is either no compelling event driving the customer to buy now, or the customer is satisfied with its current solution. Good information about your account will provide insight into your opportunity potential. You anticipate having a better chance to win in the not-too-distant future. For example, you may be waiting for a new product/technology to be released. You position your offering to be the future solution of choice by investing now in building relationships and champions at the account.

In Conclusion

It is very important that you select the appropriate strategy for each account. Develop and implement a plan based upon a strategy that enables you to optimize the use of your time and resources and maximize your results. With a focus on the long term, your strategy will determine the action you take to win business now and develop a trusted relationship with the customer.

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My Thoughts on the 50 Best Companies to Sell For

Logo Selling Power - 50 Best Companies to Sell For 2013Recently I spoke with a sales leader from a company that’s featured on the Selling Power 2013 Top 50 Companies to Sell For list. I was particularly impressed by the number of years he’s spent building the best sales force possible. His approach involved a combination of factors that I’ve often advised sales leaders to think about: people, process, and technology.

Is this combination easy to get right? Hardly. Just think about the effort that goes into each one.


  • Motivation sounds simple -- the reality is that many companies are only getting it half right. For any sales organization to be competitive, your compensation plan needs to be attractive, transparent, easy to understand, and automated. And comp is only part of the equation. Do you offer incentives? Are you taking advantage of gamification apps? Do you know what motivates your team? (Just asking can be a good start.) 
  • In reality, not all “top performer” job candidates are right for your company. Half the time, they’re not even top performers, because they’re better at selling themselves than they are at selling anything else. Hiring success starts with creating a clearly defined job role, complete with the characteristics that you know lead to success in your particular industry and company. (An investment in assessment tools has been a key success differentiator for many companies.)
  • Quick tip: conduct internal survey -- these help leaders learn what is and isn’t working in your existing sales culture.


  • A sales team needs to follow a defined sales process. You’d be surprised how many companies think they follow a process, when in fact their reps are out there winging it.
  • Selling has always been about the customer, but never before in history has the customer been such a powerful driver of how purchases are made. Even great companies miss opportunities because they fail to pay attention to how the buyer wants to interact with the sales and/or marketing team and how they prefer to purchase.
  • Go ask one of your reps right now to tell you what your value proposition is. If it can’t be articulated, it doesn’t exist. Which means your customers probably don’t know what your value is, either.
  • Alignment among all teams, across all divisions, is a must. Without it, you are spinning your wheels and losing the productivity game.


  • Here’s something I encourage all sales leaders to do: learn how to shop for technology. There are technology solutions for almost anything you can name -- training, coaching, prospecting, generating leads, managing time, managing your team, recruiting, compensation, incentivizing … the list goes on and on. This is a great boon to sales teams, but it also represents an investment of money and time. There is no question that these days one of the most difficult aspects of technology is wading through the thousands of offerings that promise to supercharge the efforts of salespeople. 
  • Here’s another trick sales leaders must master: learn to make the internal sale for technology investments. The number one company featured on the 50 Best Companies to Sell For list is SunGard, where the Vice President of Global Sales Enablement, Ken Powell, recently helped lead a $4 million sales transformation that pulled together technology solutions from more than one dozen vendors. One thing he did was plant the seeds to support change by building a coalition of supporters internally. Once they became champions, it was easier to align the whole team around a successful investment.

What’s behind a great system of people, process, and technology? Great leadership. Without leadership, any company is like a ship without a rudder. The wind might blow you in the right direction from time to time, but when the weather changes -- look out. A rudderless company will not attract good sales talent or encourage existing talent to stay.

Based on my years of working with sales teams and profiling successful sales organizations in Selling Power, here are the top three characteristics of superlative and sales-friendly companies.

  1. They offer industry-leading solutions. No salesperson wants to sell for a company with a mediocre offering. Remember, your company doesn’t have to be everything to all customers -- just the best to your best advocates.
  2. They communicate well. We live in a real-time economy, and that is simply what all employees expect from employers. If you fail to communicate comp-plan changes, announce new product offerings with no game plan, and never take time for coaching sessions, then you’re not creating a supportive and transparent sales culture.
  3. They empower their salespeople. Today it is almost impossible for top companies to lead in the market without sales enablement solutions, training, coaching, and mentoring. It takes a village to create a sales superstar. Combine that support with the natural drive and ambition of a talented seller, and watch your sales take off like a rocket.

Yes, it can also be very difficult for sales leaders to build a winning company culture that attracts the right kind of talent. However, they do exist. When we assemble our list of 50 Best Companies to Sell For each year, we put a high premium on sales cultures that set the standard for hiring, motivating, retaining, and supporting sales teams. This year, we see that these opportunities exist among companies at all levels of maturity. Each company is succeeding when it comes to helping salespeople perform at their best.

I encourage you to check out the full list and see for yourself which companies are setting a high bar for sales professionalism and achievement.

For a chance to see your company on next year’s list, go here

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Where the Good Entry-Level Sales Hires Are

Deeter headshotToday's blog post is by Dawn Deeter, Professor and Director of the National Strategic Selling Institute (NSSI) at Kansas State University and the J.J. Vanier Distinguished Professor of Relational Selling and Marketing. 

Sales leaders face tremendous challenges when trying to find entry-level reps that will succeed out of the starting gate. In fact, as Professor and Director of the National Strategic Selling Institute (NSSI) at Kansas State University, I receive far more calls from businesses seeking to hire salespeople than I do from students looking for jobs.

It’s common to hear stories about what a tough job market college graduates face these days, but most of my students are receiving multiple offers before graduation. However, according to a 2011 Sales Education Foundation article, “ROI: Is a University Education Worth the Price?” the job placement rate for 2009 college graduates was 43.5%, while graduates of university sales programs experience a 90% placement rate. One former student in our K-State NSSI Sales Program, Dan, called me on a Tuesday in July hoping I could help him find a job. I made some calls to our corporate partners; by the end of the week, Dan had several interviews. By the following Tuesday, he had been hired by a great firm to be a sales representative.

At K-State, we are transforming students into salespeople by:

  • Providing real-world experience. Students perform multiple role plays in each class, participate in sales competitions on our campus and at other universities, and take on sales internships.
  • Teaching them how to use sales tools. Students in our Sales Management class, for example, learn how to use In our Advanced Sales class, students put on a benefit auction to raise funds for our program; as part of the auction each student will make 30-50 cold calls, by phone, to find items for the auction and sell tickets to the auction.
  • Providing a realistic preview of a sales career. Through their role plays, internships, and interactions with sales leaders, students have great insight into their role in the sales organization and what it takes to be successful.
  • Helping build their personal networks. Students interact with “real” sales people inside and outside of class, through our executive mentorship program and interactions with members of our advisory board and corporate partner program.

Howard Stevens, CEO of HR Chally and President of the Sales Education Foundation, notes in the article “The End of Sales Education as We Know It” (2011 Sales Education Annual, Issue 4, p. 47) that graduates of university sales programs:

  • Ramp up 50% faster and are 30% less likely to turn over.
  • Have already demonstrated an aptitude and desire for a sales career.
  • Are more focused and in-tune with the numbers and the sales processes needed to achieve those numbers.
  • Are more aware of the specific skills required to succeed in a sales role.

We are certainly seeing these benefits in our students. As a result of these in-class and extracurricular activities, our students are prepared to hit the ground running in actual sales jobs on day one. They are poised and confident due to their experience gained through role plays, class activities, and internships. One employer told an Advanced Sales student she would start her career with that firm a step above entry level because of her cold-calling and prospecting experiences.

If you are a sales leader seeking to hire well-prepared salespeople, you owe it to your bottom line to check out our program, as well as the other programs across the country. To find a list of programs in your area, check out the University Sales Center Alliance (USCA), a consortium of universities with sales programs working to set quality standards in sales education. Also, explore the Sales Education Foundation, which posts the Top Universities in Sales Education each year.

Where did you find your last great entry-level sales hire? Share your stories in the comments section.

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