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Changing sales behaviour? You might want to look at the sales incentive plan first.

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By Paul Bevan, Director of Surefire Sales

We have heard a lot recently, even within the recent portals of ComparetheCloud, about the need to change the way we sell. While there is always a danger in over-simplifying the drivers and levers that affect human behaviour, might I suggest that a little time and thought spent on making sales incentive plans fit for Cloud purpose would be time well spent.

I don’t think it is an exaggeration to say that we get the sales results our incentive schemes deserve. Anyone who has a run a sales team knows that sales people are masters at working out how to make a scheme work to their advantage. The more complex we try and make the schemes, to try and balance up the drive for growth and the drive for profits, the more the sales teams find ways of driving a coach and horses through its provisions.

Anyone who has a run a sales team knows that sales people are masters at working out how to make a scheme work to their advantage.
When we were selling hardware, or software on a licence basis, it was relatively easy, in theory, to construct incentives based on whether the focus was on order growth, margin growth, customer acquisition and retention, or a combination of all three… and we still got it wrong regularly.

Now, Cloud and globalisation have made life much more complicated. For example, if you are a sales person selling data centre space and are paid on monthly new bookings in your geography only, are you going to chase a local deal for 20 racks now with a national enterprise, or the new IaaS vendor, tipped for greatness, who only needs one rack in your geography and a further 10 in other geographies, with the chance that this could become a huge magnet for future business.

Trust me, without management intervention, most sales guys will take the 20 local racks now. The long-term company strategy may have been better served by taking the other deal, but the drive for revenue now can often be a compelling factor for many organisations. This is not restricted to hardware either as software and service companies struggle to incentivise sales for selling Cloud based pay per use models effectively. If the anecdotal evidence is to be believed, the problems are pretty widespread and must be impacting growth and profit targets.

Are there some great examples of simple, effective schemes out there that are driving desired sales behaviours in Cloud vendors, or do we need to adopt the DEC approach from the 1980s and do away with the bonus scheme for sales completely?

I’d love to hear your views.