Rethinking Sales Compensation

Frank V. Cespedes

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Article | Top Sales Magazine | February 2017

Rethinking Sales Compensation

by Frank V. Cespedes

Abstract

Compensation is probably the most discussed aspect of sales and the single biggest portion of the more than $900 billion that U.S. companies alone spend annually on sales efforts. But research indicates that less than 10% of companies believe that their sales incentive plans “consistently drive selling behavior.” This article discusses three common assumptions about sales compensation that merit re-examination and skepticism: “Money Is the Only Motivator” for most sales people; “Comp Plans Must Be Simple”; and “We Pay for Results, Not Process.”

Keywords: Sales; Compensation and Benefits; Motivation and Incentives;

Format: Electronic

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Citation:

Cespedes, Frank V. "Rethinking Sales Compensation." Top Sales Magazine (February 2017).

About the Author

Frank V. Cespedes

MBA Class of 1973 Senior Lecturer of Business Administration

Entrepreneurial Management

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Case | HBS Case Collection | February 2016 (Revised August 2020)

InsightSquared: Developing the Sales and Marketing Plan

Mark Roberge, Tom Eisenmann and Frank Cespedes

Fred Shilmover and Sam Clemens prepared for their fourth quarter board meeting. They were excited to have scaled their software startup, InsightSquared, to $2 million in revenue and secured an $8 million round of venture capital. However, they disagreed on the path ahead, specifically on the sales and marketing plan. Shilmover preferred a sales-centric approach to growth while Clemens preferred a marketing-centric one. Which strategy was optimal for their venture’s next phase of growth?

Keywords: Sales planning; Software; Marketing; Sales; Planning; Growth and Development Strategy;

Citation:
Roberge, Mark, Tom Eisenmann, and Frank Cespedes. "InsightSquared: Developing the Sales and Marketing Plan." Harvard Business School Case 816-074, February 2016. (Revised August 2020.) View Details

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Teaching Note | HBS Case Collection | July 2020

Shindigz

Frank Cespedes

Teaching Note for HBS Case No. 819-010. Shindigz sells party and celebratory items through its branded direct online channel, third-party retail and wholesale channels, and online marketplaces. Shindigz has for decades successfully executed a premium-priced branded strategy across its distribution channels. But market developments put this approach at risk. The teaching note discusses the impact of omni-channel buying processes on marketing requirements in an event-driven product category; the links between channel choice, pricing, and business strategy; and the requirements for change in response to market conditions that put pressure on established processes in a business model.

Keywords: ecommerce; e-commerce; pricing; Price; Strategy; Decision Making; Distribution Channels; Brands and Branding; Consumer Products Industry;

Citation:
Cespedes, Frank. "Shindigz." Harvard Business School Teaching Note 821-024, July 2020. View Details

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Case | HBS Case Collection | August 2017 (Revised July 2020)

Cumplo.com

Frank V. Cespedes, Fernanda Miguel and Mariana Cal

In August 2017, Cumplo’s Founder Shea and CEO Kirberg meet to discuss growth and strategy issues faced by this Chilean fintech startup. What sales and marketing strategy will best foster the compny’s growth? Are changes needed in the product lineup? How and when should Cumplo begin to expand beyond Chile, to other countries in Latin America? The company raised $1.4 million in its first three years, mainly from individual investors, and then issued new shares for $3 million in 2015. By June 2017, Cumplo was debt-free, had achieved break-even, and had raised an additional $2.3 million.

Keywords: fintech; alternative finance; crowdfunding; crowdlending; Marketing Strategy; Growth and Development Strategy; Social Entrepreneurship; Expansion; Latin America; South America; Chile;

Citation:
Cespedes, Frank V., Fernanda Miguel, and Mariana Cal. "Cumplo.com." Harvard Business School Case 818-039, August 2017. (Revised July 2020.) View Details

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Rethinking Sales Compensation

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