7 MIN READ
Can sales incentives work to sell customer education programs?
The mantra from most business executives is "expansion in all ways", and for most teams in the organization, it's easy to figure out how to do that. Customer education (CE) leaders want to do their part too, so how can they sell more education programs? One way is to partner with sales teams to sell education and offering them incentives to do so.
CE leaders *want* to help increase the bottom line and expand the business, yet besides hopping on the sales calls themselves, it's not always obvious how they can do that. By stealing an idea from sales however, CE leaders can increase their visibility in deals and contribute more obviously to that mandated expansion.
What idea? Incentives. We're talking about using incentives to encourage the sales teams to sell more education programs. CE leaders may not be familiar with how to use incentives like their sales leader counterparts, so let's discover a bit more about it.
Education is an important part of sales
These days you can buy pretty much anything you need online: books, shoes, clothes, groceries, stocks...everything. But there are just some things that are worth going in to a brick-and-mortar store. Personally, I hate buying shoes online, especially if it's from a brand I don't know. The last time I needed a new pair of running shoes, I popped in to a specialized running shoe store. This isn't just your run-of-the-mill sporting good store. No, in this store they won't even let you try on a pair of shoes before they analyze your feet and walking style. They want to see how your feet behave before you put on a shoe. They'll even look at your old shoes to check out the wear pattern on the soles to see how that matches up with your feet. The staff have been trained to do all this to help me pick the best type of shoe for me. They explained how my foot strike and wear pattern translates into my running stride and therefore dictated a particular kind of shoe support. I was hooked into buying the right shoes for me — and will keep coming back — because they'd taken the time to educate me.
As a CE leader, you already know that when you're educating people, you're helping them understand the benefit of a solution. Sales teams know that a better educated prospect or customer makes them easier to sell to because they already know so much about your product and its benefits.
Where does CE fit in with sales?
Before determining the incentives to offer, CE leaders should look at their sales funnel to see when they speak to customers and prospects. Understanding the potential placement of CE programs in the sales funnel will ensure that both CE and sales teams are on board with the partnership.
The placement within the funnel then dictates the metrics the sales teams use to determine their efficiency. A good understanding of these metrics will help CE leaders determine the right kind of incentives to offer the sales teams.
What sales metrics should CE leaders look at?
The first group of sales metrics CE leaders should be interested in are the activity sales metrics. They show what sales people are doing on a daily basis and they're directly influenced by sales managers. Activity sales metrics include:
Number of calls made / emails sent / social media interactions
Number of conversations / meetings scheduled
Number of demos or sales presentations
Number of referral requests / proposals sent
This information tells CE leaders how sales people are engaging with customers and prospects, and how they could possibly influence these numbers by including CE products.
Next up are pipeline sales metrics, which gauge the health of the sales pipeline, showing what's working and what's not throughout the sales process. For example:
Average length of sales cycle
Total open opportunities by month/quarter (by team and by individual)
Total closed opportunities by month/quarter (by team and by individual)
Weighted value of pipeline by month/quarter (by team and by individual)
Total value of sales by month/quarter (by team and by individual)
Average contract value (ACV)
Win rate (by team and by individual)
Conversion rate by sales funnel stage (by team and by individual)
Both of these sets of metrics deal with new prospects and leads, while not really including existing customers. The expansion MRR metric is the one CE leaders should look at to see how much existing customers spend with you after that initial purchase. It includes numbers like:
Revenue through cross-selling
Revenue through upgrades/upsells
Revenue through greater volume purchases (buying more seats, usage data, transactions, etc.)
Another metric that may prove useful to CE leaders is the CAC Payback Period (or Months to Recover CAC). Essentially this is the number that explains when a customer becomes profitable for you because they've generated enough revenue to cover their acquisition cost. Adding education programs to the sales cycle can decrease this number since it'll increase the amount of revenue the customer is bringing in.
What about sales incentives to increase CE program sales?
Okay, now that we've covered how education and sales teams can work together and gone over the sales metrics that CE leaders should understand, we can now look at the incentive portion of the show.
According to Harvard Business Review, there are two main conditions that must be present to ensure that incentives will work in the organization:
Salespeople must have a large impact on sales results by focusing on activities that add value and directly influence customer buying decisions.
The company must have the ability to measure individual results by separating out each salesperson’s contribution and determining how much an individual’s actions affect the outcome.
One pitfall HBR mentions is the fact that in the past, many organizations relied too heavily on individual effort and results that were tied to short-term standards like quarterly sales quotas. Instead, they recommend weighing incentives more to overall company goals, while engaging sales people to best understand how their performance affects the overall goals.
Examples of incentives for CE program sales
1. Give non-monetary rewards
The glow of a monetary reward fades quickly as the sales person spends the money or deposits it into their bank account. Out of sight, out of mind.
A non-monetary reward however, reminds them of their success whenever they look at it. E.g. They're proud to explain where they won the new flat-screen TV to anyone who asks about it.
2. Give a personal reward
Motivation is a unique thing, in that what motivates you, may not work for me. Sales people who are unengaged with the incentive program will demonstrate bad body language, less enthusiastic tones of voice, and more.
A personalized reward inspires them to work harder for it because it means more to them. It could be tickets to a theatre show, a gift certificate to a fancy restaurant, or tickets to a sporting event. It generates excitement for them, so they're more motivated to sell the CE product.
3. Make sure everyone has a chance
The incentive here is to ensure that everyone on the sales team has a chance to win the award. If it's always a straight numbers game (most sales, most calls, etc.), the greater the chance that the same person wins over and over. It's demoralizing to the rest of the sales team if they never see a different name on the leaderboard.
So, change up the way you get to the incentive. For example, you could do a knockout tournament-style of leaderboard, pitting sales people against each other in different rounds. Or you could do a quiz show type of game to help them learn more about the CE program, testing their product and CE program knowledge, with each correct answer garnering a point. At the end of the month, the team with the most points wins a prize.
4. Ask the sales team their preference
Not everyone wants the external validation of seeing their name up on the leaderboard or being called up at the monthly sales meeting to be congratulated by the team.
"This month, Julia's the big winner! Julia, stand up, and team, let's give her a round of applause!" (FYI, I would just hate that.)
So ask the team members and the sales leaders how their team likes to be recognized and then go with that.
5. Make the CE incentive different than the regular sales ones
The final example is to make the CE sales incentive different than the regular ones the sales team sees. Adding this variety into their metrics and work changes the way they view their targets and help them be more creative in their sales techniques.
Starbucks is great for this with their Starbucks Rewards program (I know this is for the consumer, not the sales person, so bear with me here). Based on the time of year and products they're looking to promote, they'll offer me different star rewards. For example, "3 stars on a purchase after 2pm during the week" or "5 stars for purchasing something 5 days in a row". This changes my purchasing behavior and helps them increase sales in the afternoon (for example, since those are typically lower than their morning purchase numbers). It causes me to behave differently and make different purchases.
The same can happen with CE incentives, if they're different than what they're used to getting. Try out some different combinations and see what works (within reason of course!)
Over to you
Has your CE team used incentives to increase sales through your sales team? How did you implement them and were they successful? Share your experience in the comments, as we'd love to hear how it's working for you.