CRM Driving Changes in Sales Compensation

The myth of the sales superstar remains strong. It’s easy to think of a top sales rep as a maverick individual who closes the big deal, collects the big commission and then rides into the sunset. While no amount of technology will ever remove individuality from the sales process, CRM inevitably tends to make sales a more collaborative effort – and that may require corresponding changes in compensation.

A major reason for this is that CRM puts more power in customers’ hands. Many CRM applications allow customers to order products and services directly over the Internet. Often, they also can check order status and obtain service and support assistance. As a result, it’s not uncommon for sales reps to run across customers who have extensive knowledge of price and configurations, information that otherwise would be part of the sales rep’s added value.

CRM thus forces sales reps to become less oriented toward paperwork and manipulating the system and more oriented toward working with customers to come up with complete solutions to complex problems. Because CRM makes it easier for customers to obtain commodity products, sales reps increasingly are required to be expert consultants able to help customers understand their needs and then come up with a plan to fulfill those needs.

CRM systems facilitate and encourage the human-to-human interaction that is the core of the sales process. Because of this, in the future successful sales reps will need not only advanced technology skills, but also skills that enable them to marshal the resources of their firm to solve customer problems. A big sale will become more of a collaborative effort and less of a maverick performance.

The professionalization of business-to-business sales will require sales management to rethink compensation. Because selling in a consultative manner is a highly skilled job, sales reps who can do it well will need better compensation packages. Furthermore, because sales will be more collaborative, compensation may need to be based more on team performance than individual performance. In fact, some companies already are beginning to compensate sales reps based on customer satisfaction rather than merely sales revenue.

The above is based on a conversation with Erin Kinikin, vice president for CRM at Forrester Research, a high-tech analyst firm headquartered in Cambridge, MA.