Super-charging Sales Compensation Plans

At last month’s TechAmerica Sales & Marketing Roundtable, guests heard from a panel of experts who’ve clearly earned their stripes in the tech sales and HR trenches. The principal topic was compensation strategies for multi-tier sales channels in the tech world… both internal plans and partner-focused packages.

From a well-known, San Diego-based human resources leader came the opinion that there’s a dearth of compensation plans that adequately serve today’s multi-tier channels. Overlapping sales efforts are too common, with the development of specialized channel partners to ride alongside inside sales teams.

Often, these compensation plans are poorly-designed and reflect the wrong motivation… most often that of the company’s CEO. Prescribed vs. actual duties cause communications breakdown, misunderstanding and friction.

The sales person should be viewed as the CEO of his or her territory. And, the lead sales person in the company needs to form the plan, align it with HR procedures, and then be its champion while selling the plan upward to C-level approvers.

For emerging technologies, companies should have a business development state of mind when forming sales compensations. Everyone – from the test lab to the controller’s office – should be avid sales people. This especially holds true in new market sectors. Now, granted: the term “business development” is a fuzzy one. In fact, a friend and former colleague defines the title of “Business Development” as befitting for sales people who don’t want to sell, and for non-sales people who do!

Company-wide bonuses? Yes. As long as the plans stick to the SMART rule: Specific, Measurable, Attainable, Relevant, and Track-able. These plans enfranchise the whole company, including non-sales and non-marketing staff.

It’s back to the tried and true rules, folks: Base all plans on a floating mix of On Target Earnings; that is, base plus variable payouts. (aka commissions or incentives) And, again, make sales goals realistic, and specific, measurable, attainable, relevant, and track-able… Once they’re done, compare them with investor’s expectations for a complete gauge. That’s easier said than done, isn’t it?

Detroit: Motown and Muscle Cars

Today, attendees at the National District Export Council Conference in downtown Detroit were treated to a stellar lineup of presentations and keynotes, after a kickoff reception featuring a Motown Hits cover band that clearly loves the music… I think they would have sung to an empty room and still not let up! And, if that weren’t inspiring enough, we were hosted by Ford Motors for a tour at their historic and awe-inspiring Rouge Plant. It’s hard to do justice to the place in mere words.

Rouge Plant: Growing Roof Going Green, F150s ready to roll

The auto plant’s creation 90-odd years ago on the banks of the River Rouge, and its operations and generational changes since then have coursed through the veins of the US industrial world, affecting us all at home and on the job every day. 10 million Model As, followed by T-Birds, Mustangs, and now brawny F-150s are rolling off the lines. Muscle cars, all.

To cap the evening off, we were hosted by the Ford Museum, home to the best collection of transportation and mobile and modern living icons I’ve ever seen.

AirStream Yurt? Flying Saucer Diner?

And, here I learned that even Bucky Fuller had to work out the kinks before inventing the Geodesic Dome (see Dymaxion House…)

Dearborn, Michigan is home to these tributes of American Innovation, and make the city a destination spot for vacationers and history buffs alike. And, inspiration for global business crowds.

Is Your City in the Global Top 10?

Looking at the top five criteria in the poll, I know mine isn’t. Sheer size, flow of goods and capital, human and monetary; and political-policy influence… all roll up into a global capital of commerce.

So, world traveler/jet-setter business titan: take a guess, then look at the results, posted at Bloomberg-Business Week as compiled by global management consultancy A.T. Kearney, to see how well you know global commerce hot spots.

Sales Channel Strategies for In-home Fitness Equipment

My latest assignment: create a new retail brand category that addresses the unique fitness needs of an ever-growing consumer set. And, to recruit and motivate retail partners who are desperately seeking high-quality and innovative products to stock in-store and online that will serve these loyal customer groups.

Simple, In-Home Solutions for Fit and Active Lifestyles

The product line is fitness equipment for low-impact, high-result, in-home workouts for dedicated athletes in the “fit and 50s” upward into the “silver sneaker” sets… now that’s a fun challenge. Fun, because retail channel partners get to hear a compelling story of how these active folks want to sustain a healthy lifestyle… and up until now, haven’t been able to find simple, durable and affordable products in stores. And, the gym experience can be off-putting for these groups… particularly women. Hence the appeal of a compact, in-home solution.

The company’s product already sells quite well through TV advertising, and has terrific global play, too. As with any successful channel formation endeavor, in addition to the mainstream retailers – Sears and BestBuy (yes, they’re selling fitness gear now…) — smaller, niche retail channels exist. For instance, did you know Camping World sells a whole line of “add-on” products to RV owners, that enrich their on-the-move lifestyle? Well, who says Snowbirds can’t remain physically fit as they bask in the Sunbelt winters?

When recruiting retail channel partners, we also rate in-store staff and their ability to inform and educate older shoppers; and the ambiance of the store. A super-charged, gym-like show floor pumping techno-beats and stocked with high-performance and bulky equipment can be intimidating to an older shopper. Online transactions can’t be counted on to carry the bulk of sales volume, either, yet — at least for the next few years.

Learn more about the Resistance Chair line by VQ ActionCare.

Shaping North Korea’s Emerging Economy

The future of North Korea will, inevitably, include free market economics. Taking a long view, teams of business people and educators are overcoming obstacles and making contacts within the country. I recently spoke with David Day, a Honolulu-based attorney and educator and visiting professor at Sungkyunkwan University in Seoul, and Hanoi School of Business.

Q1: What is your involvement in trade initiatives with North Korea?
A1: I hope to arrange a business tour to North Korea within the next several months. For the time being, my involvement with trade initiatives is through colleagues from Europe and South Korea who have visited or done business with North Korean non-military business operations, in that country. These colleagues are in the civilian private sector, and work with North Korean high tech business enterprises on an ongoing basis

Q2: What do you feel is the most vital next step in allowing trade with North Korea?
A2: First, the global business community has to ride out the present, very unstable period of Regime Transition now taking place in North Korea. This means that we are likely to see a number of upcoming “chess moves” in North Korean leaders as Kim Jong Eun, (youngest son of Kim Jung Il) begins to consolidate his power. There were some 14 years of violent incidents that occurred during the transition from grandfather, Kim Il Sung, to father, Kim Jung Il. I think that we can reasonably expect more than the Cheonan sinking and the recent seizure of a South Korean fishing boat, as the country is whipped into a war-like frenzy to maintain unity during the transition process.

(on March 26, 2010, the Cheonan, a South Korean Navy ship carrying 104 personnel while conducting joint exercises with the US Navy, sank off that country’s west coast, killing 46. International investigators concluded the ship was sunk by a North Korean torpedo, fired from a midget submarine)

The second step is to begin to appreciate and understand the importance of North Korea’s stated national goal of becoming a “Mighty and Prosperous Nation” by 2012. This is highly significant, as the country plans to rapidly modernize over the next few years. I agree with some PRC Chinese insiders who have quietly admitted to me that North Korea could modernize even faster than China–once they get truly committed to this goal. The reason that an understanding and appreciation of the year 2012’s goal of becoming a “Mighty and Prosperous Nation” is so significant for those of us in the business community is that North Korea will have to open up to trade in order to make this happen. It also means that it will have to somehow successfully negotiate the UN sanctions off its back in short order to really get this trade and development underway at maximum speed. However, we need to understand that North Korea is already developing its civilian high tech applications nicely, right in the teeth of the current UN sanctions.

Student, Kim Chaek University, Pyonyang

Recognize that this “Mighty and Prosperous Nation” is a long way off — or so it appears to be. But consider that North Koreans will be using some 300,000 3G mobile phone by the end of 2010, a fiber optic cable system currently being installed in all of its provinces, a new central bank for foreign investors, and a new foreign investment legal regime just recently put into place. The modernized infrastructure or groundwork for a “Mighty and Prosperous Nation” is being put into place now.

The third step in allowing or developing trade with North Korea is a legal one from the perspective of American businesses interested in investing in North Korea. Initially, this is going to require an easing of security tensions on the Korean peninsula. My view is that this will occur naturally over time as the Regime Transition period works its way through. After tensions and relations can get back to the “pre-Cheonan” level, we need to work with the U.S. Treasury Office of Foreign Asset Control to begin a more expeditious processing for applications of U.S. businesses seeking approval to do business in North Korea.

We will want to watch carefully the start-up of American James Kim’s “Pyongyang University of Technology” in Pyongyang this Fall. Mr. Kim’s university start-up is a pioneering enterprise for Americans and if he looks successful, a number of other American firms are likely to attempt to push for approval to do business with North Korea.

In conclusion, peace and stability on the Korean peninsula will require heavy private sector involvement in terms of investment and trade. The country has already gone nuclear. It is way too late in the game to even think that they are going to surrender this ace. The key is to bring them into the community of nations and that is where the private sector, with its trade and investment, has to play a leading role. It is critical then, that we focus on those sectors in North Korea that are already doing work with businesses in other countries. With the stated goal of a “Mighty and Prosperous Nation” coming up, North Korea’s high tech sector, with its developing expertise in software design, IT outsourcing, and digital animation is worth taking a very close look at.

Channel Sales and Marketing for Fine Arts Products

I’m part of a family venture called Via Lucis Press, and owing to my specialty in global channels I get to form our channel sales and integrated marketing plan. I find that the market for fine arts products is comprised of a delightful mix of consumer- and trade-focused buying groups, and some unconventional but spot-on selling partners. I’m looking into the buying habits and trends for collectors, artists, and publishers; it’s an illuminating look at how and where they shop, and how they’ll use our company’s artistic photography products.

Via Lucis: Way of Light

Via Lucis’ channel plan differs from those of more mainstream, consumer packaged goods and accessories in two ways:

First, museums and societies are the power retailers. Masters of affinity-based marketing, these organizations are often non-profit, though sell high-end collectible products and catalog merchandise online to loyal and discriminating consumers. In this setting, a publisher of fine art finds not only venues for exhibition, but outlets for commercial activity. Via Lucis not only exhibits our artwork in such settings, but also engages with these organizations in targeted, global channel sales activities. Themed travel and education outreach naturally follow, which branch into several more intriguing market sectors. In the case of Via Lucis, we also appeal to religious and sacred spaces pilgrims and collectors.

Second, the business/trade and consumer sectors balance one another in influence and market potential, yet the means and methods of serving them are exclusive. For instance, art directors for books, magazines or public exhibit spaces rely upon an instant, online forum for purchasing Via Lucis photography under strictly defined, fee-based, single-use licensing transactions. This protects our copyrights, and ensures competitive pricing and flexibility for these trade customers. Meanwhile, we reach collectors of Via Lucis artwork in the greater consumer world in a more recognizable online store, offering added-value products like custom framing and matting, and delivery options. The good news? Experts in website functionality have preceded us, building commerce tools that fit both of Via Lucis’ channel models.

Via Lucis: Way of Light.
Via Lucis Press is a venture formed to share a one-of-a-kind collection of over 2,000 images (and counting) with the arts, graphic design, and publishing trades; and by aficionados and collectors of the art form. Artistic photography, shot entirely on location, highlights the many Romanesque and Gothic churches in France and Spain.

Microfinance Banking: Act Local, Think ROI

Microfinance succinctly describes the oft-repeated phrase Act Local, Think Global, wherein small sums of money are loaned to individuals or cooperatives, planting the seed for families and communities to become more self-sustaining. Microfinancing is a simple story, but is gaining backing by investors seeking ROI in high-growth, under-served markets such as India.

We global consumers may not know or care when we buy a product that originates in a micro-financed venture, but it’s reassuring to know that there are small success stories unfolding around the globe, right now. And, in such countries where there are large untapped credit demand, the investors follow.

On the expectation that credit to the nation’s poorest may surge by more than 40 percent in a market — where about 120 million households don’t have access to banking and financial services — Bloomberg reports that India’s largest microfinance company SKS has attracted such investors as George Soros’s Quantum (M) Ltd. hedge fund.

I wonder at what point investors will shift added fees onto the backs of the borrowers, in order to reduce the risk? We see it happen in the world of insurance, wherein policy holders in high-risk settings pay a premium for the privilege of being covered. And, the other inevitability is regulations. Fast Company reports on the emergence of standards aimed at keeping all parties honest, though I suspect fees levied against borrowers will again result.

In a more philanthropic frame of mind, here’s a news release announcing top-performing micro-finance organization ACCION, based in Boston and nearing its 50th year in operation. ACCION’s mission is to give people the financial tools they need – micro-loans, business training and other financial services – to work their way out of poverty. This is what it’s all about.

Successful Channel Leadership in 2011

Hanson Marketing is actively involved in San Diego’s tech marketing and sales circle. I’m co-chair of the Marketing & Sales Roundtable for TechAmerica San Diego, and here’s what’s cooking for our next event.

“How Leading Tech Marketers Foresee Product Trends, Gain Insight, and Find Revenue: A panel discussion on forming a successful 2011 marketing mix.”

– Revenue-Friendly Product Management: On Task, On Time, On Target
– Integrated Public Relations: Sway Influencers, Accelerate Sales Cycles
– Relevant Marketing Communications: Partner-friendly Resources Win Mindshare
– ROI-Savvy Global Event Strategies: Gain Face Time… Worldwide!

Those four pieces of the pie sum up what it takes to win market share in the technology field. Stay tuned for more news, or better yet, contact me at to register for the event!

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