While the economic recession is still a pressure that many companies need to be mindful of, a number of companies have begun to see signs of growth. That means they are beginning to shift out of survival mode and into expansionary habits.
One of the key drivers of growth is sales – the more sales companies can secure, the more revenue they can pull in. However, in an uncertain market, the challenge of scale makes fair and appropriate compensation a difficult challenge to deal with. Businesses obviously want to encourage their sales teams to convert more leads, but at the same time, if they promise too much in the way of compensation, this could lead to funding issues.
Momentum can be a difficult thing to account for when planning any sort of business strategy. For example, if a new product hits the market and finds its niche, it can drive massive amounts of sales in a short time. Conversely, any sort of disaster or catastrophe could lead to decreased demand. At a time when companies are trying to scale up, accounting for momentum is a tricky subject to approach.
As Business 2 Community notes, compensation and cost planning for a salesforce that is growing rapidly due to momentum is a leading challenge for businesses.
"On the one hand, sales costs can quickly become uncontrollable if the company does not master the sales learning curve and plans to add or promote its sales people appropriately," Business 2 Community contributor Tien Anh Nguyen added. "A deep analytics challenge that arises in this situation is to understand how much of the growth is dependent on marketing investment as opposed to sales efforts, separately from the market's organic growth."
While there is no single specific way of addressing this problem, one strategy that may help is the integration of sales incentive management software. By using software solutions, companies can develop compensation plans that are easier to manage and less time-consuming to run, while also enabling them to create better strategies in the long term.