The Compensation Conundrum

Posted by Ginger Conlon on Aug 2, 2012 7:33:00 AM

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Ginger Conlon

We're pleased to have Ginger Conlon join us as a guest blogger today. Ginger is editor-in-chief of Direct Marketing News. Contact her at or @customeralchemy.

Tales of the disconnect between sales and marketing have long been told. Misaligned goals, differing definitions of qualified leads, blame games, and more. 

One underexplored area that can help to increase collaboration and improve alignment among sales and marketing teams is compensation. Linking marketers’ variable pay to sales performance increases the likelihood that marketers will make it their mission to work closely with sales teams to ensure that marketing efforts drive positive sales outcomes.

The success of this approach hinges, of course, on managers from both teams setting processes and guidelines that help to ensure success. For example, the two organizations must:

Jointly define a qualified lead—This is an area of contention that needs to be overcome. The issue is more than just when is a lead “warm enough” to be passed from the nurturing stage to the sales stage; it’s also about lead quality. Additionally, the process of defining the when and who aspects of lead qualification should be addressed on an ongoing basis, as business, customers, and markets evolve.

Create a common language for shared elements of the customer buy cycle—Collaboration requires understanding and communication, so marketing and sales teams should identify key terms and processes and come to an agreement on what exactly they mean.

Align goals—Neither team can operate optimally in a vacuum. For instance, if marketers are charged with delivering 20 qualified leads per week to the sales team, but the salespeople can only follow up with 15 leads, the system is set up to create tension.

Set realistic lead targets—As noted in the alignment example above, providing too many leads is as bad as delivering too few. It’s important to consider how many leads salespeople bring in on their own when determining the ideal number of leads that marketing should provide to salespeople.

Build a partnership—Instead of sales being marketing’s “customer,” the two teams should be collaborative, working together on activities like strategic planning to ensure that each team’s focus is properly aligned with the other.

Once these areas are in sync, it creates an environment in which linking the marketing team’s variable pay to sales outcomes can significantly increase marketing performance.

This type of alignment may not be appropriate for every situation—it’s essentially that marketing activities can be directly linked to sales performance. Marketers’ variable compensation should only be linked to what can affect. Admittedly, it’s a daunting task, especially considering how complex compensation plans and sales processes can be in some organizations. But when the supports are in place and the plan is well designed, that link can increase collaboration and motivation, which will improve performance and drive results.

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Topics: Marketing & Sales Alignment, Guest Blogs

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