- Affected areas. Some of these areas have a direct impact on sales compensation plan design, others are areas of consideration being contemplated for the change needed in a sales rep’s skills, traits, drivers and/or behaviors.
- Rise of AI. Understanding how reps utilize these technologies within the sales process and build tactics and rewards to support the use of technology, will be key to better adoption.
- New skills. New sales enablement programs focused on digital selling, solutions selling, and data and analytics help sales reps do their jobs better.
As we get deeper into 2024, five key areas have emerged that organizations are addressing when considering their new sales incentive strategy and focus.
Learn: Sales Compensation: Foundation and Core Principles
Some of these areas have a direct impact on sales compensation plan design, others are areas being contemplated for the change needed in a sales rep’s skills, traits, drivers and/or behaviors. To remain aligned, your sales compensation plan will need to support these areas and not conflict with the new market dynamics.
1. Rise of Artificial Intelligence (AI)
Sales leaders are starting to realize the importance of chatbots and AI — more specifically, how technology can make a significant impact on sales performance numbers by supporting simple tasks and processes. AI helps sales teams gather valuable data on consumers — data that can then be used to establish sales and marketing strategies or make product adjustments. AI can help forecast trends to help sales teams stay ahead of the game, boost productivity through task automation, identify leads with a higher chance of conversion and improve overall customer experience. From a sales incentive rewards perspective, the key to better adoption will be understanding how reps utilize these technologies within the sales process and build tactics and rewards to support the use of technology.
2. Buyer Expectation Around Self-Service and Personalization
In 2024, a higher percentage of customers, especially from younger generations, prefer to conduct their buyers' journey independently, without interaction from sales or marketing teams. This poses a complex problem to businesses that have relied, for decades, on human sales assets to push products. Instead, companies and the compensation plans must now place focus on product experience and allow interactions with the product itself to drive customers further down the sales funnel.
For example, in software, self-service demonstrations will be vital in driving more independent customers. Once customers have had their own self-activated experience with a product, they will be more inclined to seek assistance from high-end sales activities because they can then be better prepared for questions and negotiation points. Sales incentive plans will need to focus on providing the proper measures for customer success and support. Less emphasis on “hunter measures” and more of usage, consumption, service and support will be key.
With this expectation, customers are also demanding a better, more personalized experience. This has been shown to increase customer loyalty. Incenting efforts to understand buyer behavior will encourage reps to speak with a customer longer and provide a more personalized experience. An incentive plan will have to focus on the sales rep’s ability to position themselves as a thought leader and offer something of value (SOV) in every conversation.
3. Value Selling in the Customer Sales Process
Customers are smarter and savvier than ever, and they see through common sales tactics. Simply pitching a product and what it does isn’t as effective anymore. Your sales incentive plan will need to support a customer’s need to understand the value of your offerings. This is where value-based selling measures will come in. Unlike with revenue and production measures, sales compensation plans that use value-based selling measures will help a rep focus more on showing customers the benefits or value they gain from using their products or services. Aligning your plans to balance the revenue, production and value measures will help the sales organization transition more easily and help your rep provide more value to your customers.
4. Sales Certifications and New Skills Requirements
Sales enablement continues to play a key role in scaling the impact of your sales team and product or service. New sales enablement programs focused on digital selling, solutions selling, and data and analytics help sales reps do their jobs better by giving them the training and tools they need to more effectively and successfully close deals. To create a winning strategy, sales incentive plans will need to prioritize processes and increase content engagement across your organization. Reps should be rewarded for increasing their mastery of the key skills needed to be successful in their role.
5. Customer Data, Sales Analytics, Pay Transparency and Cost of Sales Data
In 2024, sales customer relationship management (CRM) and incentive compensation management (ICM) automation are more than a necessity, they are a must for an organization’s efficiency, especially if you want your sellers to maintain a competitive advantage in their respective industries. More and more businesses are investing in automation in response to the changing business climate and pay strategies that have occurred during and post-pandemic. Along with your CRM tool, an ICM tool is an efficient way to monitor the compensation cost of sale (CCOS) of the prospecting process and ensure that a rep has more time to focus on nurturing leads, supporting current clients, and personalizing customer experiences.
Additionally, the data from sales enablement software, incentive tools and CRM platforms will continue to help sales teams identify close probability, opportunity prioritization, and the next best opportunities. It will also help identify the best opportunities to pursue, invest in and eventually pay out on.
Editor’s Note: Additional Content
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