Forty-nine percent of account managers have a single revenue goal that
makes no distinction between retention and growth, according to Gartner,
Inc. However, sales leaders note that account
growth is an essential component to meeting their organization’s
revenue goals, yet only 28 percent report their account management
channels regularly meet cross-selling and account growth targets.
“In most cases, sales reps look to account growth as a last resort,”
said Craig Riley, senior principal analyst at Gartner. “This is because today’s
sales compensation plans fail to motivate sales reps to grow their
accounts; instead single-metric plans allow sales reps to receive most
of their variable pay from renewals.”
The median proportion of sales reps’ overall goal assigned to growth
accounts for only 9 percent of sales reps’ variable pay, which is not
reflective of the time and effort required to grow accounts, according
to Gartner. In addition, Gartner research also shows that many sellers
don’t actually understand how they will be paid, with only 24 percent of
sales reps able to easily calculate their total variable compensation.
“It’s not surprising that organizations struggle to use their incentive
program to drive account growth,” added Mr. Riley. “If sellers don’t
understand how they will be paid, then it is very hard to use
compensation to motivate them to perform in a specific way.”
To solve this problem, Gartner recommends sales leaders re-evaluate how
they compensate sales reps to better incentivize account growth.
Specifically, sales leaders should follow three key steps to identify
and implement appropriate compensation plan changes to drive growth:
Identify Where and How Sales Efforts Fall Short: Sales leaders
should diagnose whether sales rep behavior is aligned with strategic
goals by evaluating current sales performance on renewals,
cross-sells/upsells and new revenue against projections and growth
Include Account Growth in Compensation Plans: Motivate
sellers using single-metric plans to grow their accounts by using
thresholds and pay accelerators to limit their ability to earn
incentive pay via renewals only.
Ensure Sales Rep Understanding: Improve multimetric plans’
ability to motivate sellers by having each metric account for at least
15 percent of on-target earnings (OTE) and limiting compensation plans
to no more than four metrics.
Additional details are available to Gartner for Sales Leaders clients in
the report “How
to Use Compensation Metrics to Drive Account Growth.”
About Gartner for Sales Leaders
for Sales Leaders provides heads of sales and their teams with the
insights, advice and tools they need to address mission-critical
priorities amid mounting pressures to drive growth through new and
existing customers. With extensive qualitative and quantitative
research, Gartner for Sales Leaders helps sales teams combat
commoditization and price-based purchasing, develop critical manager and
seller skills, elevate the value of sales interactions, unlock existing
growth potential and optimize sales force enablement.
About the Gartner CSO & Sales Leaders Conference
Sales leaders face unprecedented changes in customer expectations,
technology and the talent needed to drive results. At the Gartner
CSO & Sales Leader Conference, taking place September 17-19,
2019 in Las Vegas, sales leaders will learn from the latest research and
Gartner experts covering sales talent, customer buying behavior,
account-based marketing strategies and leveraging digital channels.
Follow news and updates from the event on Twitter at #GartnerSales.
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indispensable insights, advice and tools to achieve their
mission-critical priorities today and build the successful organizations
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To learn more about how we help decision makers fuel the future of
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