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January 28, 2015

High Tech Sales Programs May Need to be Reinvented

By TMCnet Special Guest
Jason Angelos, Managing Director for Accenture Strategy and Sales Transformation

There are several challenges with corporate sales programs. A new Accenture (News - Alert)-sponsored survey focused on sales executives in high tech and other industries finds that:



  • sales representatives spend only one-third (34 percent) of their time selling, down from 41 percent in 2011;
  • only 14 percent of chief sales officers are very confident they can achieve this year’s revenue targets; and
  • only one-third (33 percent) of companies actually track and analyze the financial returns on their sales spending investments.

These findings are included in a new report titled Powering Profitable Sales Growth - Five Imperatives. The statistics suggest that chief sales officers are challenged to build the right processes, talent, technologies and customer service capabilities to drive high performance. Many have been investing in programs that yield little value. And because they have done this over a period of years, sales systems and processes have grown more complex and less effective. Today, these processes and systems may need to be reinvented.

Accenture also recently conducted complementary research focused on the electronics and high tech industry. That research revealed that as much as 10 percent of the $135 billion that this industry spent on sales and channel incentives last year generated minimal or no investment returns.  This problem is projected to escalate. In 2016, the industry is projected to spend an estimated $154 billion on sales and channel incentives.

One of the reasons for this lack of investment returns is the increasing dependency on indirect sales channels, which adds complexity to business models.

Given this situation, high tech companies should take a fresh look at their sales and channel incentive programs to generate higher financial returns.

Corrective actions to consider

Following are six actions to consider:

  • Identify and communicate the incentive strategy – Even at more sophisticated high tech companies, explicit channel incentive strategies are often missing. The strategies should communicate which channel incentive performance metrics a company wants to influence, such as program effectiveness and incentive spend optimization, and which behaviors an organization wants to incentivize.

  • Establish a common vocabulary – High tech companies and their channel partners should agree on a common definition of terms. Even simple labels such as “programs,” “incentives,” “benefits,” and “promotions” can mean different things to different people, which causes confusion and errors.
  • Listen to partners – These companies should ask channel partners what is most important to them and why, and then align those priorities to drive desired outcomes. When designing a sales program, enlisting channel partner participation early and often can help ensure their needs are met. The program should be as “user friendly” as possible.
  • Track channel spending and create an inventory for use cases - To understand what changes need to be made in channel incentives, companies need to know how the changes will affect financial performance. Tracking all categories of sales channel spending should be considered. Those range from deal registration, market development funds, upfront promotions, back-end rebates, and partner program compensation. In addition, companies should document channel incentive scenarios their partners support and the end-to-end steps behind each. Aligning these “use case” scenarios with a channel spend tracker can better identify and accurately summarize new opportunities. 

  • Hypothesize an ideal channel spend - To create an action plan for change, it’s important to create a list of probable areas of opportunity and quantify them. This can be done by asking these questions: What would one need to prove change is needed? What is the potential value of making that change? Companies can use the responses to assign opportunities and resources to categories based on priorities.

  • Create a total rewards statement for your partners – Companies should consolidate their various data sources to consistently measure channel program performance and demonstrate to partners how they earn money. An online rewards statement can enable this. By integrating necessary data, companies can identify key performance metrics that shed light on incremental sales, profits and investment returns. Once accounted for, companies can compare performance across program types, products, partners, and markets. This will facilitate more effective reallocation of incentive spending.


Jason Angelos is a Managing Director for Accenture Strategy and Sales Transformation. He can be reached at [email protected].




Edited by Maurice Nagle
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