For a thriving small business, growth is the biggest priority. Demonstrated growth creates leverage you need to get new funding, attract top talent, and build customer confidence in your company’s longevity.
I’ve worked in sales, or closely with sales, my entire career – at both large companies with tremendous and rapid growth, such as Salesforce, and much smaller, private companies. I’ve learned that nothing can guarantee you a Mount Everest sales trajectory.
However, by creating the right foundation and putting effective processes in place, research shows that you can positively impact quota attainment and revenue. Here are my top findings on how small businesses can accelerate growth leveraging incentive compensation.
If you’re a small business, your growth takes a direct hit from sales turnover. Keeping your team motivated plays a crucial role in growing your sales numbers.
To help retain and motivate reps, small businesses need to look at compensation. A recent study by the Sales Management Association found that a better-paying position is one of the top reasons reps voluntarily leave an organization. In fact, data shows that companies paying at the 75th percentile or higher have 50% less turnover.
Just like larger companies, smaller organizations must use the right mix of base pay versus variable pay and sales incentives to drive performance. According to Aberdeen Group, best-in-class companies are 45% more likely to leverage special incentives that drive improved sales rep behavior and business results.
Every dollar counts for a small business, but, you can’t be penny-wise and pound-foolish. The Salesforce 2016 Connected Small Business Report found that less than half of small business owners use any business process automation. With outdated, manual systems, small companies slow down growth opportunities.
In its 2017 “Sales Analytics Benchmark Research,” Ventana Research reported that spreadsheets are used even more often by smaller organizations. Yet, Ventana also noted that “using spreadsheets to manage aspects of sales, including compensation and incentives, is ineffective and can be problematic.”
Automation improves business efficiencies by streamlining processes and increasing employee productivity. Larger companies are already reaping the benefits from cloud-based, SaaS business applications, such as Salesforce CRM and automated solutions for lead generation (i.e. Datanyze), comp planning (i.e. Xactly), and more. With intelligent, automated solutions, companies can optimize processes and lower time spent on administrative tasks.
To increase and speed your sales efforts, small businesses must be able to grow quickly – requiring hiring agility, integrated business processes, and scalable systems. You don’t want to miss out on growth opportunities because you can’t hire sales reps quickly enough. If you’re in a competitive market, understand in advance what compensation is needed to attract the best reps, and know the pay mix. In addition, research best practices on how to balance field reps vs. inside sales, or even have a hybrid role.
Further, as you grow, getting visibility across different departments takes more time and effort. To have a complete picture of your business, systems and processes must be integrated, so data can be easily shared. Be sure that your systems (such as CRM, ERP, or SPM) have the capability to expand as needed to support your growing business.
The most forward-thinking companies always forge the path for others to follow. Small organizations need to continuously watch and learn from the winning practices that are being adopted by successful, larger ones.
Today’s best-in-class enterprises are applying analytics to improve decision-making. They’re leveraging comparative data analysis to benchmark their activities against peers. By seeing how they compare with other companies of a similar size or within a similar industry, they can make sure that their practices are competitive with the market and adhere to best practices.
With easy-to-use and affordable SaaS solutions, smaller businesses are now gaining the ability to use data in the same way. With these types of tools, they can get new systems up and running fast to optimize their sales processes, increase efficiencies, and grow faster.
With fewer resources and manpower, smaller businesses are often challenged in growing sales. By using incentives to motivate your sales team, modernizing outdated processes, and applying new technologies, you can grow faster. Emerging cloud-based software levels the future playing field – giving small businesses the same advantages being used by larger companies to accelerate performance.
Micheline Nijmeh is CMO at Xactly Corporation, a leading provider of enterprise-class, cloud-based, incentive compensation for employee and sales performance management. Xactly’s products allow organizations to make strategic decisions, increase employee performance, improve margins, and mitigate risks.