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By Jason Watkins, Senior Manager, The Alexander Group, Inc.
Growing a sales force when your company is “on the ramp” is one of the biggest, and most important, challenges that a sales manager faces. Structure is the key.
Hypergrowth companies like dot-coms, Internet, high-tech, telecom, and software firms are experiencing the challenges associated with developing the appropriate organizational infrastructure, particularly in sales and marketing, in a rapidly moving environment.
Having worked with a number of new high-tech companies in designing their sales compensation plans, I’ve seen that when those companies are on the ramp, they’re literally using any and every recruiting method known to man to bring employees in.
Some companies have offered packages that have the potential to go as high $300,000 total target compensation per-year, along with offers of anywhere from $30,000 to $60,000 in stock options to lure top talent away from more established firms.
We’re seeing incredible base salaries to begin with, even though historically, in high-tech, base salary has been much less important because sales workers cared more about the structure of the compensation plan and the chance for upward growth.
Despite the hype the mainstream media likes to perpetuate about new cars as a signing bonuses and the like, one-time incentives don't have the drawing power of a compensation plan that could potentially buy a new car many times over.
This isn’t to say there aren’t tempting incentives offered, but to hunt the best of the best you have to think in terms of the base, the overall incentive plan, and the stock options.
Part of the reason for this is that compensation plans that offer too much in the beginning attract mercenaries who literally take the money and run.
It's necessary to assess the goals of the people that are demanding that kind of an offer. Is it a five-year, get-rich-quick offer? Is that the kind of individual you want selling your products and services?
Probably one of the most important things you can offer people in today’s market isn’t money, but money plus opportunity to grow professionally and financially. And, rightly or not, people are drawn to new technology companies because they see their growth opportunities as virtually unlimited.
Older clients are starting to call back my company, AGI, to ask what they can do to keep their best people from getting picked-off by new high-tech start-ups. But, most of these established companies aren’t overhauling their pay plans just yet because the stability of their plans and of their company are the very things that keep them from bleeding more talent than they already are.
Old or new, it seems that at this point in the game, it’s the companies that have the well-defined, well-structured sales models that will win.
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