Several years ago, we worked with a large Fortune 500 company whose IC Director was frustrated with low performance.
The metrics were there, the incentives were good, but the understanding was low… and sales were short. How could a well-designed plan that they had spent months developing not be working?
A Lack of Understanding.
Their IC Team was getting flooded with questions on how the plan worked and there was a lot of misinformation out there. When we asked them how they had communicated the plan the prior year, they forwarded us a one-paragraph email with a 30-page, 12-font word attachment that explained the plan metrics (the first three pages were all legal copy).
We knew there had to be more, so we asked if they had done any other communication – a webinar, workshops, or PowerPoint? They looked at us with a pained expression and slowly shook their heads, no.
We helped them turn things around by reimagining how they communicate their sales incentive plans to their approximately 2,000 sales representatives.
How We Comprehend Things Matters
As humans, we have to contend with a number of factors that limit our ability to comprehend and take action on communications. One of those factors is too much cognitive load, which states that the more information we are presented with the more we tend to miss. Sales reps, in particular, want to be out in the field selling not reading long, boring documents.
In this case, the word document was actually hindering the plan. The 30-page legal document fell into the category of cognitive overload. While it contained all the relevant information, nobody read it through, or they did not comprehend it because the way the information was presented didn’t cater to how our brains typically work.
It may have pleased the legal team, but it was causing more confusion than it cured. And thus, it was causing the IC Director a lot of undue stress.
We worked with them to change not just the document that they were using, but how they were communicating their plans and created a highly effective communication campaign.
This campaign communicated the plan in different pieces, starting with a highly graphical overview, moving into some of the key pieces that sales reps wanted to know, to finally providing them with a legal document (albeit, not 30 pages and not all in 12-point font).
The IC team went from hundreds of inquiries a quarter to seven. The sales reps’ satisfaction with the plan increased by over 30% and the number of sales reps achieving quota went from just under 50% to over 65% (a 32% increase).
Now can all those be attributed just to the communications change? Probably not. But did play a vital role in the improved outcomes? That is a definite yes!
There is no magic bullet when it comes to motivation, engagement, and incentives, but there are a lot of great tools that can determine the difference between an IC plan that falls short and one that knows no limits.
Applying proper communication to a good plan design is one of the best tools you can have in your belt to bridge this gap. Don’t let your communications make your plans fall short. Below are some common scenarios we see in many of the companies we work with today. Which do you want to be?
1. A Great IC Plan and Bad Communication
The incentives are there to drive performance, but a lack of understanding leads to mixed behaviors and poor overall performance. This is where many companies find themselves and where a little investment in communications can go a long way.
2. A Bad IC Plan and Great Communication
The incentives are driving bad behavior, poor performance, and low compliance… but the team totally gets it and is acting on those bad behaviors. This is rare, but it does happen. You do not want to find yourself here.
3. A Great IC Plan and Great Communication
The incentives are there to drive performance and good behavior and the sales force is excited, educated, and motivated to act because they understand how to leverage the plan. This is where you want to be.