Whenever I think about methodologies I always hear a voice in my head saying, “There’s a method to the madness.” In a world where so many things seem over engineered or hacked or overdone, I always come back to this saying, because no matter how complex something seems, there’s usually…😆😉🥹 usually a reason behind it. And in the case of one of my favorite photographers Ryan J. Lane (see above photo), it may be hard to see the method, but there’s true genius in there.
For as much as we often think some things are overdone, building a strong foundation for “how” you accomplish your sales goals, isn’t something that is overcomplicating your sales process, in fact, it’s a crucial one to get right if you’re going to have success. We’re going to walk through three of the most popular sales methodologies and weigh the pros and cons of each one for your organization.
Sales methodologies provide sales reps with concrete behaviors and tactics to use throughout the sales process. This structure ensures that reps always know the right actions to take and keeps the team working together as a unified whole. As you work with sales reps on adopting your organization’s methodologies, it’s important to consider the role that sales compensation should play in reinforcing and incentivising those methodologies.
In this article, we’ll consider why you should use a sales methodology in the first place, explain how the sales methodologies you use can impact sales compensation, and examine three popular sales methodologies and their relationship to compensation.
The importance of adopting a sales methodology
If you don’t follow a sales methodology, you’re going to end up struggling as an organization. Your reps may be able to close sales and hit milestones, but without a strategy for long-term success, those isolated wins won’t add up to the broader goals you need to hit.
This isn’t to say that you have to pick a single established sales methodology and stick to it religiously—far from it! But you should have a formalized methodology for your sales team to serve as their baseline. Smart sales reps will know where to deviate from a rigid methodology when necessary, but they should always have it available as their default.
Additionally, sales methodologies help guard against inaction. There can be a temptation in sales to focus on one thing at a time, putting all your effort into closing a particular sale for example, and waiting for that to complete before you move onto the next one. But this ends up wasting a lot of time that could be put to better use.
With a sales methodology in place, your reps always know what behaviors and tactics they should be using, so while they’re waiting for one thing to complete, they can focus on something else in the meantime. Committing to a sales methodology can be the difference between watching your pipeline dry up while you focus on winning a big sale, and allocating your effort in a way that keeps your leads coming and positions you to win that new business.
From the moment your organization starts to sell a product or service, you should be thinking about which methodologies you’ll build into your sales program. In the past, sales orgs were more likely to go all-in on a single methodology (“we’re a SPIN Selling shop!”), but today, it’s more common to start with one sales methodology that evolves into three or more. You may use a known, established sales methodology or your own in-house one. And you may combine several, taking the best bits from each and working them into your overall strategy.
Once you have a sales methodology in place, you can gauge performance, see how your reps are performing with that methodology, and continue refining it accordingly. Over time, expect to tailor your methodology in pursuit of the ideal strategy for your reps, your products, your industry, and your customers.
How sales methodologies impact compensation plans
Sales methodologies guide sales reps’ behavior and the tactics they implement in the sales process. And incentive compensation is what you use to drive and motivate particular behaviors and tactics. This means your sales compensation plan needs to take your sales methodology into account, incentivizing the specific behaviors and sales activities you want to see in order to adhere to your methodology.
If your comp plan incentivises sales activities that are tangential or even opposed to your sales methodology, that’s where your reps will focus their efforts, and it will distract from their ability to effectively follow the methodology. Instead, reward behaviors that align with your sales methodology, and you’ll see more of those behaviors.
Additionally, training and coaching play a large part in aligning your compensation plan with your sales methodology. In many cases, the specific tactics involved in a given sales methodology aren’t something you can directly incentivize on their own. But you can train and coach your sales reps to help them understand that these tactics are what it takes to complete sales and hit their targets. You want to create a clear relationship of events in their mind: our methodology uses these tactics, those tactics lead to sales being completed, those sales add up to hitting targets, and hitting those targets means healthy compensation.
With a sales methodology in place to guide your sales reps’ behaviors, a compensation plan that incentivises those behaviors, and sales coaching that reinforces those behaviors and ties them back to compensation, you’ll have a streamlined system that works together to reach your sales goals.
Incentivising sales reps with 3 popular sales methodologies
Let’s take a look at three popular sales methodologies and consider what it means to incentivize your reps to reinforce them. There are many more sales methodologies worth using, but this list should serve as an illustration of how to align your sales methodology with your sales compensation structure.
1. ValueSelling
With ValueSelling, sales reps are encouraged to focus on the benefits that a product or service provides for the customer, rather than its features. ValueSelling works because buyers aren’t nearly as interested in a product’s functionality as they are in what it will do for them.
What problems will it allow the customer to overcome? How much time will it save for the customer? What’s the ROI a customer can expect from using it? If sales reps can provide compelling answers for these kinds of questions, then purchasing the product becomes a no-brainer.
But answering those questions means sales reps must have a deep understanding of both the product they’re selling and the customers they’re selling to. It requires prior research and careful questioning to identify each customer’s needs and pain points in order to position your product as the solution that offers the most value.
Incentivising sales reps in ValueSelling means training and coaching them to ensure they fully embrace the process. You want to help them understand that success happens when they present value, when they illustrate a strong business case, when they showcase an ROI analysis of the customer’s business.
ValueSelling emphasizes doing thorough customer discovery, asking high-value questions, and working with the customer to help them solve their problems. When reps see that these behaviors lead to closed sales which leads to completed quotas and earned compensation, they’ll be motivated to complete them.
Motivating reps with ValueSelling:
- Coach reps on presenting value to customers with a strong business case and on ROI analysis of the customer’s business.
- Incentivise discovery, asking high value questions, and solving customer problems.
2. The Challenger Sale
The Challenger Sale methodology encourages reps to not only present value to the customer, but to actually teach the customer something new about their own business.
With the Challenger Sale methodology, reps take control of the sales process by demonstrating advanced knowledge of the customer’s industry, being able to call out needs and opportunities the customer may not have even been aware of. By offering a new way of thinking, the sales rep positions themself as an authority on the customer’s business, priming the customer to embrace the solutions they provide.
Incentivising sales reps in the Challenger Sale involves all the same elements as with ValueSelling, but it also means focusing on your sales reps’ internal behaviors and their confidence level. They’re going to need to be able to ask hard questions, speak authoritatively, be decisive, and push the customer on the monetary gain they’ll realize by adopting your solution—or the monetary loss they’ll experience if they don’t.
This means a lot of coaching to help sales reps gain the understanding and the confidence they’ll need to complete these kinds of deals. One-on-one practicing and role playing goes a long way, as does sitting in on calls to evaluate their behavior and help them make whatever adjustments are needed.
Motivating reps with Challenger sales:
- Coach reps on increasing their confidence levels, speaking authoritatively, and teaching the customer new things.
- Incentivise discovery, asking high value questions, and solving customer problems.
3. The JOLT Effect
The JOLT Effect is all about creating a customer experience that makes your product or service stand out from the competition. It does so through the use of “JOLTs”—memorable and unexpected experiences that create a lasting impression.
JOLTs work because of the way the brain processes emotions. Positive experiences unleash a surge of neurotransmitters like dopamine and serotonin, activating the pleasure centers of the brain and creating a strong connection to whatever caused the positive experience. So when sales reps are able to sprinkle JOLTs into the sales experience, they can form a lasting impression on the customer who then associates those positive feelings with your product or service. This not only helps reps close an initial sale, but also goes a long way toward building customer loyalty.
But finding the right JOLTs for a given customer requires some work to track down. As with ValueSelling and the Challenger Sale, sales reps will need to engage in discovery and ask the right questions to learn a customer’s pain points, and then they can use those pain points to craft a JOLT that delights the customer with how they’re able to overcome their problems. For example, if customers are frustrated with long wait times on the phone, an organization might create a JOLT by offering a callback service when an agent is available. By addressing this pain point and providing a convenient solution, the organization creates a positive emotional response in the customer and builds loyalty over time.
Incentivising sales reps in the Jolt Effect means helping them understand what JOLTs are, why they provide so much psychological value, and how to map out JOLT opportunities and build them into the sales cycle. Coaching will again play a big role in teaching sales reps how to craft JOLTs that make a positive impact with a customer, as well as where to bring them into play in order to help a deal progress. You can also track and incentivize metrics like customer satisfaction, retention, and revenue to understand the ROI of JOLTs and make data-driven decisions about future JOLT initiatives.
Motivating reps with JOLT:
- Coach reps on crafting JOLTs and implementing them throughout the sales process.
- Incentivise customer satisfaction, retention, and revenue.
Incentivise your sales reps with Performio
The best-performing salespeople are the ones who use your sales methodologies well. And one of the best ways to reinforce this is by giving your reps transparency into their sales compensation. They should know what they’re earning at any given time, what sales activities they’ll need to complete to achieve their goals, and how far along they’ve progressed toward meeting their quotas.
Performio’s Incentive Compensation Management (ICM) software gives your reps access to all of this with intuitive dashboards that provide real-time insights into their sales activities and the compensation they’re earning, driving performance as they move toward their goals.
Ready to see what Performio can do for your organization? Request a demo today.