Align sales incentives to company cycles

One challenge in sales teams is how to incentives people to perform at their best. And one problem is closely related to measuring performance using single criteria: if you incentivize people exclusively on, for example, the volume of deals closed, you may find situations of misalignment with the company.

For example, someone may close a high value customer with an insane need for support (or integrations). In the end, the company will stress about this customer more than all the others (Pareto Principle) but the sales person would benefit the most.

Moreover, as soon as there is a downturn in sales, people will seek other opportunities since long-term loyalty is not built in nor incentivized.

In Build - Tony Fadell argues that there are more sophisticated approaches to creating proper structures and preventing the cobra effect within the sales organization: incentives are not paid after a closed sale, but over time. Considering the use of extra resources of the company to maintain the deal can be included.

The secret is aligning what the company is trying to optimize with the incentives that individuals receive to pursue those opportunities. Short-term revenue may create mid-term bottlenecks if people are not aware of how to company operates in a holistic way.