CRO Rule #8 - The Most Underutilized Tool

CRO Success Rule #8
Incentives are the most underutilized tool available to Chief Revenue Officers in terms of meeting their performance objectives.

Truly, there are certain things I encounter, when working with CROs, that are as consistent as an underutilized incentive plan (and strategy).  Salespeople are motivated by money in most instances.  That motivation will drive behaviors.  If you incent the motivation, you will elicit the behaviors you want.

That is a bit simplistic, but you get my point.  One thing all sales incentive programs should contain is that new business should pay out at a higher commission rate than existing (customer) business.  There are variations and adjustments needed to fit your plan, but this basic structure should always be followed.

I discuss margin incentives, threshold incentives, team incentives and more in the book if you are interested in learning more.

CRO Rule #7 - No Subsidies

CRO Rule #7
Reward the strong and effective; don’t subsidize the marginal performers.

Incentives are one of the most under-utilized tools available to the CRO today.  Strong salespeople are almost always motivated by a return on investment which speaks to money.  Yet, there are certain mistakes I have encountered over my career that I have listed in my book.

Here they are (with more details available in the book):

Incentive Mistake #1:
All business (new and existing accounts) earns the same incentive.

Incentive Mistake #2:
Putting a cap on a salesperson’s earnings.

Incentive Mistake #3:
Not creating an incentive based on desired outcomes.

Incentive Mistake #4:
Not having a defined sales cycle.

Incentive Mistake #5:
Letting Finance design the incentive plan.

Incentive Mistake #6:
Paying incentives on orders versus customer payment.

Incentive Mistake #7:
Assigning more sales leads to the reps that are NOT doing well to help them crack the incentive column.