Incentra Insights

Sales Incentives and Covid-19

Posted by David Chittock on Jun 17, 2020 1:15:00 PM

Sales Incentives and the Road to Recovery after Covid-19

In Survival Mode

There is no question that one of the hardest hit sectors in the economy is the face to face sales process. Reach and frequency sales jobs have become obsolete in the blink of an eye, and sales are either already dropping off the charts or are expected to do so imminently. Sales leaders are desperately struggling to prevent their sales teams from totally disappearing by finding ways to keep them compensated in the midst of the national lock down.

What Can We Do?

Recently, Willis, Towers and Watson released several articles addressing sales compensation issues impacted by Covid-19.  As we settle into the “new normal” of social distancing and stay-at-home campaigns stemming from the Covid-19 pandemic, organizations continue to focus on their human capital - especially the safety, health and well-being of their sales teams.

But there are some companies in the opposite situation; sitting on an unexpected surge in business due to products that are in high demand. Both situations can wreak havoc with a sales incentive plan.

With the economic challenges evolving, organizations must also grapple with how to effectively manage risks to the business. Against this backdrop it remains as important as ever to effectively and fairly motivate and reward sales teams. In such unprecedented times, many companies are asking how can we do this.

Options to Consider

To motivate and engage your sales force, consider these suggestions:

  • Modify payout curves — lower threshold performance requirements, or possibly eliminate thresholds altogether. While it won’t maintain incentive payouts at historical levels, it will at least get more people “in the game.”
  • Modify quotas — reset the bar to maintain engagement. But this needs to be used with caution because if a return to normalcy happens sooner than expected then demand for your goods may surge.
  • Reward based on relative performance — use stack ranking or indexing to “grade” on a curve.
  • Add sales contests — think about motivating performance using temporary, short-burst programs. This won’t be a fit for all, but for some it can be a useful supplement.

To manage costs and level the playing field, consider these ideas:

  • Lower variable pay — this may be a one-time opportunity where high performers would welcome a re-balance towards more fixed compensation or at least more certainty in compensation.
  • Tie more pay to corporate results — have we ever needed the community to come together more than now?
  • Cap incentive pay — potentially relevant for those with a sudden surge in demand. While we normally advocate against caps, we also feel that sales incentives should reward for contribution, not windfalls created by external events. If not an outright cap, a lower rate of payout acceleration at very high-performance levels may be warranted.

Given the fast moving and unpredictable environment we find ourselves in, it seems the circumstances have prompted companies to act now, but it is important that those actions are based on sound judgement and reasoning. Although we are in fire-fighting mode, we should also remember that this may be a unique opportunity to really solidify or re-work the sales workforce value proposition.

We’re Here if You Need Us

Tough times call for tough solutions. Readjusting and realigning your sales recognition program, even if a temporary remedy, will require a totally flexible and adaptable technology platform. Rapid response is what you need.  Rapid response is what we do.  Flexible is our middle name.  Give us a call.



Categories: Sales Incentives