My company is considering implementing an ABC program to go along with our normal comp and plans. What are some things you have seen work well and not so well?
kla8ter
Activity Based Compensation
19
It’ll last a short time and their commission checks will go up but then they’ll change it when sales don’t correlate.
Agreed…typically you want a happy medium between quality and quantity. If someone isn’t hitting their numbers inspect deeper.
In my experience if they have to pay you to do activity to get to a sale.. leaderships focus on what makes them succesful is in the wrong place. Agreed above. They will start to see many reps hit all the metrics and no sales, then they will make the metrics even higher (possibly, since they ate attainable) then some people will leave because they arent hitting activity or closing sales. Then leadership will change so they pay a % of commission when you hit 80% of metric and then more commissuon at 100%. Then depening on the size of the company eventually it will go back to “we need sales” change commission structure again. Also, that additional comes from somewhere, when I’ve seen it happen it came from the top performers commissions who are making the company the most money… i get they are trying to force good habits, but penalizing top performers to pay the others doesn’t make sense to me.
When a system is based off the metrics and not the final result, everyone will adapt to take advantage of it. Focusing on the metrics can lead to improved sales but only if they are the right ones, such as quick discovery/qualification and not just "pump out 300 calls".
activity data should be used for identifying trends, and pockets of opportunity within your sales org. Unless you work in a market with an UNLIMITED TAM (Total addressable market) like VOIP phones, or SMB accounting software, the concept of "sales math" (working back to your target based on activity) is slowly dying with the rapid decline in call to connect rates and the rapid up swing in shitty automated email "sequencing" systems. Compensating employees by activity ensures one thing, your employees are going to figure out how to game the system to get paid. You may think you've "figured out all of the work arounds" but trust me, there is nothing more creative than a group of sales reps trying to find the path of least resistance to getting paid. If your team/company is looking for a way to compensate on something other than revenue, I would suggest something still performance based like opportunities created, meetings, set- etc.)
The only activity is selling and the only metric is revenue. Everything else is sizzle, not steak. Frankly, I don't really care (within reason) how people get to their number so long as it is repeatable and predictable.
Good thoughts…thanks
Someone posted a similar thing the other day - I think the consensus was that ABC programs can work sometimes but generally have more faults than positives. E.g. If the activity isn't constantly analysed and inspected for 'Truthfullness' (can't remember the right word) then people can just BS activity and gain loads of commission - good for that individual but guaranteed to stir the pot and cause people like yourself and us that work hard and properly annoyance and frustration.
Also, doing lots of activity, as you know, doesn't result in quality work or outcomes necessarily.
I'd say ride with it and work your tits off on activities to get extra mullar but be ready for the negative things that follow!
Also, doing lots of activity, as you know, doesn't result in quality work or outcomes necessarily.
I'd say ride with it and work your tits off on activities to get extra mullar but be ready for the negative things that follow!
Similar to @LordBusiness, ABC's can easily just be gamed the fuck out of in most instances.
I've seen them work as almost a baseline to earn a small chunk of bonus as part of a larger plan.
I've seen them work as almost a baseline to earn a small chunk of bonus as part of a larger plan.
This is the equivalent of a participation award, which certain generations apparently need to feel good about themselves. It’s trash. Commissions are paid against results, but some people either don’t want to do the blocking & tackling required, or they want to be paid for “trying”. This is a last ditch effort to get people to do the things that will hopefully lead to success. It is, however, thoroughly flawed as many will game the system to get paid on empty attempts thinly veiled as effort. I don’t pay you to make dials, I pay you to show results.
When Luke said he’d try, Yoda cut him off, rightfully with “NO! Do or do not. There is no try.” Clearly Yoda was a sales manager somewhere in his 900 years.
To quote South Park, that's "dumb, dumb, dumb, dumb."
Agree. Too easily gamed to check a box. No one really wins.
When I was in recruiting they switched to this, and people literally had call lists of phone numbers that went no where that they could dial to pad their metrics. Like @GrizzleMcThornBody said, probably won’t last long.
new meaning to dial for dollars
Inputs are bullshit if they are no outputs. I think that's a bullshit way to pay reps.
My company started providing an extra $600 quarterly bonus for going the extra mile with calls. Prior to this most of our sdr team waited for inbound leads. now our outbound:inbound oppt ratio has changed dramatically since this was implemented. The way I see it is they wanna give me extra money for doing the job I'm already supposed to be doing, I'm not gonna say no!
PS I was not one of the sdrs waiting for inbouds, I was hunting for leads so this was just a little icing on the cake.
PS I was not one of the sdrs waiting for inbouds, I was hunting for leads so this was just a little icing on the cake.
This sounds like a participation medal?
You're basically asking BDRs to "spray and pray" and the results will show you that quality over quantity does matter.
This is trash.
Comp plans should be based off of results. Not activities that lead to those results.
Comp plans should be based off of results. Not activities that lead to those results.
Activity based is easily cheated. And when commish is on the line, people cheat.
Focus should be on results, not activity.
Nice bonus for the people out there putting in the work but losing deals because the company has too high of a bump rate and takes too much profit for themselves.
There's a company called SetSail that sort of does something new around this -- it's like gamification but instead of activities it's looking at the customers behaviors and awarding reps for specific ones
like we have a contest where i get points for completing a meeting with a VP+ contact in ops and receive the points only if that person accepts and shows up -- so instead of rewarding me for saying i did something it verifies the activity with results
like we have a contest where i get points for completing a meeting with a VP+ contact in ops and receive the points only if that person accepts and shows up -- so instead of rewarding me for saying i did something it verifies the activity with results
23 comments