“Incentive Plans To Get What You Paid For”
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“Senior management’s job is to pay people…If they &#%!@?!”a hundred guys out of a hundred grand each, that’s ten million more for them. They have four categories: happy, satisfied, dissatisfied, disgusted. If they hit happy, they’ve screwed up: They never want you happy. On the other hand, they don’t want you so disgusted you quit. The sweet spot is somewhere between dissatisfied and disgusted.” Quote from the book The Big Short.
That quote hit home for me. Like many of us I have been on the receiving end of some interesting incentive goal setting rationale. In one case, the payout started once I was 10% above last year’s numbers, while the organization’s projected annual sales growth was set at 3%. A real disconnect in goal setting. I didn’t see a dime until I made my case to my boss’s boss for a plan modification. One of my clients was planning to offer a commission they couldn’t afford: the payout was higher than projected revenue growth. Consider the following suggestions in setting up a plan for your staff:
- Start with your organization’s strategy and what your want to achieve and link sales efforts to established strategic objectives.
- Develop sales goals in the context of the projected revenue growth for your business to sync sales performance.
- Do homework to determine what your production has been. Sales goals set without any historical analysis is like “shooting in in the dark” with goals too high or too low based on past results.
- Make goals realistic and attainable with a performance stretch. If you desire higher production, set additional performance tiers and pay accordingly. Unrealistic expectations demotivate, while easy goals won’t allow you to attain the growth you want.
- Put the incentive expense in the context of the financial benefit to your business. Yeah, you paid some big bonuses but how does your bottom-line look.
- Run the program for a test period to learn where you may need modifications.
- If a new plan, start out with a fair payout that you can always modify as you gather more data. You want to avoid reducing an amount in the future. That will hang over your sales people like a dark cloud; a real motivation and trust killer.
Great Ideas: Now What?
Everyone is enthusiastic since their ideas were heard and they are now ready to run full steam ahead with implementation of their tactics: making their idea a reality as a solution for the organization. But, maybe you are thinking: should I devote resources to it? And, if you were so fortunate as to have 10 people in that meeting with ten ideas…can you do all those tactics?
I agree, that it is never fun, since the last thing we want to do is to diminish any creative drive by our staff. But you can facilitate their continued involvement and commitment while managing resources to meet the priorities at hand. This can be accomplished by having them participate in the rating process to “weight” which tactics might have a better payoff.
What you find is that it actually structures the decision making process while successfully generating more discussion as people begin to think through their ideas. Here are the steps:
1) Title a spreadsheet or flip chart with the name of the initiative
2) Create 6 column heads on the spreadsheet:
> Idea/Tactic: action to meet the initiative
> Value/Relevancy: tactic’s relevancy to initiative?
> Ease of Implementation: easily execute the tactic?
> Resource Availability: have people, money, time?
> Cost Benefit: tactic’s impact worth the effort?
> Total Rating: total of weightings
3) List all the ideas under the Idea/Tactic column
4) Provide each team member with the spreadsheet
5) Each member weights each idea vs. the criteria on a scale1 to 4, with four as highest or best adding-up the weights for a Total Rating.
6) Highest weighted become the direction pursued.
7) Two or three complimentary tactics can be clustered into one grouping to be executed by a sub-team.
“Maximizing Customer Engagement at Your Business” Free Webinar
The link below will take you directly to my free 30-minute webinar “Maximizing Customer Engagement at Your Business” sponsored by the Mahwah Regional Chamber of Commerce as part of their Professional Development Series.
Webinar Overview
Your company, like many others, has experienced the impact of the digital revolution. You probably are spending money on digital and print advertising, website design and search engine optimization to drive customer traffic. In addition, many businesses are transforming themselves by offering their customers seamless multichannel access involving the integration of digital and physical service channels: mobile, desktop, store, and call centers.
As a result, you and your employees are now interacting with customers in multiple ways: telephone, email, retail floor, front counter and field sales.
We ask simple questions for you to ask yourself: will your staff gain the customer’s trust and confidence in those personal interactions that enables them to close the deal or deepen customer loyalty? Are your business practices in-place for quality customer assurance?
In my webinar, I pose the notion that there has been one constant of continued importance during this marketplace reinvention: that workforces must continue to possess social, customer service and sales skills and practices to deepen customer engagement.
Presentation Outline
- A customer engaged organizational culture: – what does it look like – takeaways to guide your business
- Documented research that effective customer engagement behavior benefits a business’ financial outcomes
- Responding to a changing marketplace – diverse industries hired and developed a new type of worker
- Your leadership, company mission & values as a strategic foundation for successful customer engagement
- Changing your employee’s mindset to build their confidence and comfortably transition into this economy
- Actions to develop customer engagement skills and practices at your organization
Webinar Direct Link: https://www.youtube.com/watch?v=Vd9PJWZGFl0
“What We’ve Learned Over the Past Decade” – Part 2
This is the second part of last month’s newsletter that continues with some critical learning points that we would like to share with you to hopefully add to your insights in managing and building your business. Aramini Management is celebrating its 10th year in business. It has been an interesting, and valued life journey. I say that because while I learned first hand what it means run a business, it was also an opportunity to expand my universe of experiences and relationships. Learning is life-long and the biggest thing I’ve learned is that staying static can result in failure as you are constantly moved out of your comfort zone to engage new people, industries, technological change and business trends.
- Know budget. Get to the pricing discussion early on by providing a fee range upfront once you have a framework of what the project entails. I would provide detailed proposals only to learn “it is not the cost we thought it would be” argument after spending the time scoping the project. While always be sure to convey your valued solutions to the client, getting a sense of budget early may save you time while also assist in assessing project viability.
- Perhaps they don’t like your proposal. Some times it is just that simple. They have heard a better idea or they have picked your brain and now will attempt it on their own. In some cases, I have often found that my passion and need to provide a solution – to be genuinely helpful – is not as strong as the prospect’s preference to maintain the status quo. That’s the easier decision for them than fighting the uphill battle to make changes in the organization.
- See roadblocks. Try to determine where the hidden roadblocks are to closing the deal. Ask them what would it take to move the relationship along and if there is anything that they anticipate based on their present situation and company knowledge. This is your chance to either know or not if you can address their concern.
- Old relationships, new relationships. When we started out 10 years ago, we did what most new businesses do- reached out to the contacts we knew, some long-term associates and friends. Your intent is to generate business and perhaps an introduction to the contacts in their network. Your old network may give you the time, talk about old times, wish you luck with the 80/20 rule in play – a few will open doors for you. I learned quickly that you need to move beyond that support network and develop a new network of relationships and be relentless in expanding on that since it is where the work will come from. What I found most gratifying, along with the work itself, were the new people and friendships that developed.
- Same fight for everyone. We have worked with clients in a variety of industries and helped them with what we see are three core management practices that they must do effectively: champion & lead their business, acquire new customers and then keep them. In a broad narrative: The Champion is the organization’s advocate and role model; Acquiring new customers means sales and marketing; Customer retention means effective customer service and relationships and the living the brand promise. That is our fight and yours as well.
“What We’ve Learned Over the Last Decade” Part 1
Aramini Management is celebrating its 10th year in business. It has been an interesting, and valued life journey. I say that because while I learned first hand what it means run a business, it was also an opportunity to expand my universe of experiences and relationships. Learning is life-long and the biggest thing I’ve learned is that staying static can result in failure as you are constantly moved out of your comfort zone to engage new people, industries, technological change and business trends. The following are some critical learning points that we would like to share with you to hopefully add to your insights in managing and building your business:
- Stay alert. Know what is happening in the marketplace and developing trends. The internet impacted all industries, one way or another. Banking, for example, has experienced a significant drop in branch traffic as people bank online. That means that banking staff, who were uncomfortable selling or did not sell previously, must now possess effective cross-selling and interpersonal skills to maximize the contact time for those customers who do walk into the branch or contact call centers. In response, we developed a sales training program for the non-seller to assist banks in transitioning their branch and call center staff to become comfortable in selling.
- Keep antenna up. When people are speaking “listen” as they could be telling you in the most casual conversation what there challenges are. As we were sitting in a coffee shop, an owner of a music distribution company mentioned he was having a challenge integrating sales management software into his organization’s routine, I offered for free to walk them through the applications, which eventually developed into a six month project to build their strategic plan and reorganization.
- Be patient. I learned early on that my sense of urgency was not necessarily aligned with the prospective client’s timeframe. This was the case with a very successful law practice. It took nearly two years for us to begin their branding and advertising project. A potential customer could be genuinely interested in your service but are busy meeting their own customer needs.
- Handle rejection: make no assumptions and take nothing personal. You and your business are essentially one in the same. It is very easy to take it personally when a prospect decides not to buy your product or service. The likelihood the rejection is just a business decision. Stay objective. The same people who reject you could be your next referral source. After not using our services at his former company, a vice president of sales who moved to another company, contracted us to assess their call center business practices.
- Assess probability. Assess the probability that the project will move forward by gauging the prospect’s level of commitment. Determine who the decision makers are and what the decision making process is. Are they talking to anyone else? We overlooked the competition being in the mix and were surprised when an advertising agency selected another consulting practice to assist them in developing criteria to evaluate projects based on improved ROI.
Please look for Part 2 in next month’s newsletter.