What Drives High-Performing Sales Teams?

Base salary, variable incentives, and career advancement feature as common drivers for all sales reps; however, the importance of each varies between those in senior and junior roles. How does this impact performance, and ultimately, business outcomes?

What Drives High-Performing Sales Teams?

19 Oct 2017 by  Ronak Marolia

With ever increasing pressures on the bottom-line, organisations must understand the DNA of their sales force to succeed in their business objectives. Identifying and prioritising the changing preferences and engagement drivers of this important segment allows organisations to make an informed choice and maximise the impact of their sales teams.

The Aon Sales Force Employee Value Proposition (EVP) Study 2017 suggests that while base salary, variable incentives, and career advancement feature as common drivers for all sales representatives, priorities vary between senior and junior sales representatives that could impact performance delivered by these groups.

For instance, the sales plan for driving a push-based team full of sales representatives under 30 years old is very different from a team of veteran sales representatives managing key accounts. 

So what drives high-performing sales teams, and how to engage and retain them?

Along with benefits such as retirement and health, sales representatives in Southeast Asia value stability and a baseline pay over a highly-leveraged model. Yet, there are four important themes that have consistently remained on top.

Focus on short-term cash compensation

Short-term cash compensation including base salary and incentives dominate the attractors and motivators for the sales representatives in the study. However, base salary is ranked as the top driver (over incentives) 59% of the time.

Junior sales representatives are three times more likely to be driven by incentive opportunities as compared to the more senior counterparts.

Top performers, in general, are less satisfied with the total compensation they receive. The satisfaction rates increase for the bulky ‘middle’ performers and are highest for bottom performers. This poses a retention risk of top talent, and places more emphasis on differentiating total rewards strategies for different groups, as well as building capabilities of the middle performers to minimise business risks.

Furthermore, sales representatives that have more pay linked to incentives are more likely to think they can game the incentive system. Without proper governance, a highly-leveraged plan may drive undesirable behaviours. At the same time, the pay mix is also influenced by other demographic dimensions such as the role type, industry, and geography.

Creating a differentiated total rewards strategy is no easy task. It is important to integrate short-term cash compensation based on tenure and performance while emphasising other ways to engage sales teams and shape sales behaviour.

Differentiated sales targets

Individual targets and financial Key Performance Indicators (KPIs) continue to be the preferred mechanism of sales targets for individual contributors. However, younger sales representatives are more open to having team-based targets as compared to older representatives. This theme is consistent for high performers as well, who prefer individual targets over team ones. Further, sales managers are more accepting of activity-based KPIs to reflect their team responsibilities beyond financial performance.

Company brand

Company brand is a key element, especially for senior sales representatives and cited among the top two reasons to stay with the firm. Large multinational brands can attract experienced sales hires to consolidate their position and capture market share. On the other hand, SMEs need targeted strategies to retain their experienced sales hires.

Career advancement opportunities

Career advancement is another component that consistently features in the top five total rewards components. Junior sales reps, especially, cite it as one of the top two reasons that they look for in a firm. Local firms and start-ups can attract young talent by offering better career prospects and accelerated career paths on the back of performance. However, companies need to invest in developing their skills and improving the productivity of their sales force. Companies also need to have strong sales account management and on-the-job training to build competencies of the fresh talent to minimise the risk of losing the senior sales reps and their key accounts.

Direct managers

Direct managers play a crucial role in retaining and motivating sales representatives. An effective manager plays the role of a mentor and coach for the young sales force and acts as a springboard to build their capabilities, and ultimately, outcomes for the organisation.

In conclusion, while pay continues to be high on priority for most sales representatives, other drivers such as career, company brand, and manager are increasingly becoming points of concern over the traditional incentives and salary. The presence of multiple generations in the sales force adds another layer of complexity. Organisations need to navigate the shifts in preferences of the sales representatives and have a more targeted approach to tackling different groups.

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Ronak Marolia

Ronak Marolia is a Regional Solution Lead at Aon in Southeast Asia, and serves the Southeast Asia markets on topics of Sales Force Effectiveness and Executive Rewards. Over the last 8 years at Aon, Ronak has partnered with clients across industries in South and Southeast Asia. His expertise includes workforce sizing and optimisation; sales force effectiveness and design; organisation design; incentive design, corporate governance and executive rewards. He has also published multiple papers in the areas of sales effectiveness and executive rewards.

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Ronak Marolia
Ronak Marolia