Presented with a huge growth opportunity, the company wanted to capitalize on “first-mover advantage” to accumulate market share, yet the sales organization was consistently missing their targets. In order to drive growth, the company addressed its sales organization’s structure and compensation approach by aligning it with the experience their customers desired.
The client is a privately held leading provider of innovative cooking-oil management and distribution services to more than 22,000 national quick-serve and full-service restaurant chains, independent operators, grocery delis, hotels, casinos, universities and hospitals.
The business challenge
The client developed an innovative closed-loop oil management system that safely and efficiently disposes of used cooking oil. Installs of these systems are a critical growth metric for the client and contracts can run for up to ten years; so acquiring new customers before competitors is vital. The client was looking to capitalize on its first-mover advantage and industry expertise to achieve growth, accumulate market share, and improve customer loyalty. However, the path to capitalizing was not without some challenges;
- Even with no direct competitors in the marketplace, the client was failing to meet its growth targets
- Despite missing organizational sales targets, compensation payout was over plan and over budget
- High-potential talent was voluntarily leaving the sales organization, citing the lack of advancement opportunities as a key factor in their decision
- The current sales structure, roles, responsibilities and compensation plans were not aligned with the experience customers desired
Strategy and solution
The client engaged Baker Tilly to develop a new sales structure and compensation plan that would address its systemic issues and drive the growth that was expected by leadership. Baker Tilly provided a metric-driven, collaborative approach to address the challenges, including:
- Analysis of the current state including the review of data from time studies, historic sales performance, job descriptions, and customer experience research
- Extensive stakeholder interviews, ranging from C-level to middle management to field sales representatives.
- Baseline modeling that projected installs generated by the sales team at current productivity levels compared to future annual sales targets to understand the magnitude of the gap
- Development of six potential sales structures that would address existing pain-points, deliver the experience desired by customers, and achieve growth targets
- Development of detailed economic models for the top two rated potential sales structures including roles, responsibilities, and compensation plans that would drive the correct sales behavior and align with customer expectations
- Creation of a comprehensive transition plan
While only partial implementation of the new sales structure and compensation plans has occurred to date, the client has experienced some quick wins and positive reactions from the sales team. Highlights include:
- A sales organizational structure designed for growth – The sales organization structure enables true strategic planning, provides clear opportunities for career progression, and a scalable solution for long-term organic growth. A reduction in the number of direct reports to managers facilitates effective coaching and a new account management function will drive growth within current accounts
- Simplified compensation plan to drive the right behaviors – The compensation plan will reward true growth and eliminate distraction. The sales team is incented to focus on the task most directly related to the strategic priorities of their position. Total compensation has also been aligned to meet industry standards
- Enhanced customer understanding – Newly discovered customer insights were factored into the sales organization structure changes to ensure delivery of experiences desired by customers
- Increased role clarity – With detailed competency descriptions and job descriptions for each role in the sales structure, a clear distinction exists between the roles/responsibilities to gain new customers and grow existing accounts