I’ve started to get more and more questions about whether roles that are on the “fringe” of selling should be on a sales incentive plan. This could include roles like sales assistants, sales operations roles and even marketing roles. This is almost surely due to the strong economy and salespeople receiving payouts well above what they were a few years ago. Those who see it firsthand but don’t actually participate in the sales incentive plan want a piece of the action, too.
The first time that I saw this was between 1997 and 2000, when the tech bubble was building up rapidly, sales were off the charts and salespeople were making record amounts of money. Many firms reached out to us about some disgruntled people in roles that supported sales but were not sharing in the very high payouts. Our advice then was the same as it is now: Only people meeting certain role criteria should be on a sales incentive plan. And if they want the upside, they have to be OK with the downside.
On the first point, the generally accepted rule of who is eligible for sales incentives is as follows:
- The role must interact with customers. This may seem obvious, but you’d be surprised how many people with no direct interaction with customers believe that they deserve to be on a sales incentive plan. Roles like administrative assistants and marketing team members were commonly reaching out in the late ’90s and asking to be on the sales incentive plan, despite zero direct interaction with customers in most cases. We also suggest that people in these roles are required to spend more than 50% of their time interacting with customers to eliminate those who may occasionally help on some sales, but for whom sales is not their “day job.”
- The role must have financial impact to their employer. The most common of these roles is sales, of course. The sales team’s impact and results are attributable directly to the top and bottom line. But there are other roles that can have a direct financial impact, such as farmers focused on increasing price or minimizing price erosion.
Sometimes companies ignore these criteria and simply give in: “That’s what they want, so that’s what we’re going to give them.” But that’s why the second principle of being OK with the downside is critical. Of the companies that began putting non-salespeople on a sales incentive plan in the late ’90s, most of them have now abandoned it. The primary reason was that, in the 2000-2003 period when the economy tanked, those who were seeing low or no payouts in their sales incentive plans wanted out. “Sales results are out of our control,” they would say.
But that’s exactly the point of sales incentives: The metric and associated payouts must be in their control to drive behavior, so if you don’t directly drive sales results, you shouldn’t be on a sales incentive plan.
If you face requests to put non-sales roles on a sales incentive plan, remind them of the lessons of the tech bubble. They may not know what they’re really asking for.