Are Incentives for Team Selling a Recipe for Disaster?

Well the cop out answer is no and yes.  They certainly can be if they are not well planned in the first place.  And more importantly if you don’t account for the metrics of the different departments involved, how they are measured for performance and how they are compensated, you could be headed for a calamity.

Here’s a simple example:

A sales force is challenged to sell more of their base product, let’s say a sophisticated and expensive software system.  The VP Sales offers an incentive to the sales force for incremental sales especially to new customers.  However to make the sale, the sales force must bring in service technicians because the system requires expensive implementations.  In addition engineering needs to be involved to make sure it is a proper fit and includes the proper features to do the job.  In this example lets’ assume that the sales force is responsible for managing the team.

As tradeoffs between product features and other services can exist, the sales force opts to defer features that they feel (right or wrong) can be managed by the service team, or re engineered by IT.  Sales also rely on service and engineering to ensure proposals are realistic and on budget.  Teamwork is essential.

But it may never happen.  What if the sales team is incented on gross revenue and the service team is compensated on profit margin?  And then add to the complexity that engineering earns a bonus based on project accuracy and timeliness and that bonus can grow based on overall department profitability.

In team selling, much friction can arise and has the potential to cause a loss in sales and customers, lower customer satisfaction scores and can even effect employee retention and morale.

Before you plan and implement a sales incentive activity you need to gather the department heads involved and hash out all these contingencies.  Look at the metrics across all the functioning teams and make sure your teams are incented to work together.  When all the puzzle pieces fit, you will have less likelihood of program that can fail or do great harm and ultimately be very successful.

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