Tag Archives: Choice

How Do You Manage Residual Commissions? Three Thoughts

Situation: A CEO is renegotiating the company’s agreement with a sales person. The sales person wants a declining residual commission on sales from past customers, regardless of who is servicing the account. A consultant who knows the industry advises the CEO to focus on new sales. What are the implications of each choice? How do you manage residual commissions?

Advice from the CEOs:

  • There are two types of salespeople: Hunters and Farmers.
    • Hunters focus on new business and generally get paid first year, then in later years only on sales that come specifically through their efforts.
    • Farmers focus on ongoing relationships with existing customers and are the service people for those customers. If they are paid commissions, they get paid on the ongoing sales that result directly from their efforts.
  • It is rare to find a salesperson who can manage both of these roles well, so companies often divide responsibilities, and any commissions paid, according to responsibility.
  • Decide what behavior you want from your sales person and pay for this – make the distinction between hunting and farming. Then ask the sales person which they want to be. If they say “both,” challenge this and let them know that they need to make a choice.

What Incentives Do You Offer Your #2? Six Thoughts

Situation: A CEO’s “Number 2” is returning from maternity leave. He sees a role for her helping him grow the business and wants to give her an incentive for taking on that role. What is an appropriate incentive? What incentives do you offer your #2?

Advice from the CEOs:

  • Remember, first, that your #2 is a person with a new baby. Remember what it was like when you and your wife had your first child. How did your priorities change? How did your wife’s priorities change?
  • Never make her choose between child and job – you will lose. Offer her lots of flexibility. For example, allow her flexibility in hours to accommodate the needs of her child. This will mean a lot to her.
  • Find out what is important to her – what does she see as her role and goals. Be sensitive to the possibility that the birth of her first baby may have changed her priorities.
  • Here’s the message: “You’re valuable and I want you on my team. I appreciate your responsibilities with a newborn. How can we make this work for both of us?” Build a role around this – not an incentive program.
  • Many Silicon Valley and other urban families need two incomes. Work out something that works for her.
  • Have a Plan B in case it turns out that her priorities no longer align with yours.

How Do You Create Management Alignment? Five Suggestions

Situation:  Top managers of a company are all very experienced.  All want to drive the company – but each in their own way. Overall objectives are not significantly different but the path forward varies considerably among the managers. Is this situation common? Should the CEO be doing things differently? How do you create management alignment?

Advice from the CEOs:

  • Strong differences among strong leaders are common. This is not necessarily a cause for concern or a problem. Rather, it means that you have a lot of options to help address opportunities or solve issues.
  • When you hire bright, talented people with good ideas, there will always be differences of opinion. This is healthy. You need this, particularly when sailing uncharted waters.
  • As CEO, sometimes you need a strong critic on your team to moderate your inclinations. Just because you are CEO doesn’t mean that you always have the answer. Rather, allowing the answer to come from the team strengthens the team as well as commitment to execution.
  • How do you leverage the strengths of this team to create the best future for your company?
    • First, assure that the broad roadmap is clear and that everyone agrees on this.
    • When addressing a choice, opportunity or challenge lay out the situation in broad terms. Allow all of the managers their say, and facilitate the discussion to identify commonalities and differences. Confirm the commonalities, and dig into the differences to understand the perspectives of each. Digging into differences can identify roadblocks as well as alternative options. Keep the discussion open instead of trying to drive toward a single, quick solution.
    • Summarize the options presented. If there are multiple alternatives, do a ranking exercise to see if one rises to the top. Be sure to credit the managers for their ideas and creative input.
    • In each situation there is a final decision maker. All must respect that after you’ve listened there will be a decision and that decision will be executed. Allow them to execute and focus on results.
  • Be consistent and always be who you are.

How Do You Handle Demands for Faster Delivery? Four Options

Situation: A company’s clients are demanding increasingly faster response times, particularly in areas that historically have not been considered mission critical. Clients also want faster answers to technical questions. Is this a common occurrence, and would you adjust pricing in response? How do you handle demands for faster delivery?

Advice from the CEOs:

  • If clients are demanding faster delivery, it’s entirely reasonable to tier your rates for different levels of service and delivery. Create cost / ROI breakdowns for different options, and let your clients make a business decision about the level of responsiveness that they need.
  • When brining on new clients, do a worst case down time analysis for the prospect as part of your evaluation process, then provide price options and let the prospect evaluate what is important to them. This is similar to different price / deductible levels with health or car insurance.
  • You will need to educate your current client base on what you are doing for them, and when they are reaching the upper levels of service provision under their current contract.
    • When you provide remote service, communicate what you have done.
      • Email individualized update reports to client contacts.
      • When you meet clients face to face, have a printout of service provided and toot your own horn about your service and delivery.
  • Be aware of the needs of clients who have distributed locations across time zones. A two-hour response time on the West Coast at 8:00 in the morning, translates to a half day for an East Coast location because they can’t call you until 11:00am Eastern time.

What’s the Best Way to Target Your Audience? Eight Points

Interview with Peter Koeppel, President, Koeppel Direct

Situation: The media industry is increasingly challenged trying to reach its audience. Media choices are fragmented, and the proliferation of new devices makes reaching purchasing audiences difficult. How do you best reach your target audience in this environment?

Advice:

  • Historically placement of advertising and pricing of media ad buys were driven by calculations of audience impressions – how many eyeballs a particular ad would reach. With the media market now highly fragmented this measure is no longer as effective. Sophisticated marketers now seek ROI driven media buy models to justify their advertising purchases.
  • Two companies, Facebook and TiVo, are in the lead in terms of potential to assist marketers in targeting distinct audiences, because they collect rich data on individual consumers, but this information must be balanced with privacy concerns.
  • Non-conventional channels like TiVo or Google TV and other research services can selectively present marketing messages to specific customer demographics.
  • The mobile search market represented approximately $2 billion in revenue in 2010. As more people consume media through mobile devices, this market will grow. The leader in this market is Google.
  • A growing format is longer length spots. These include short-form infomercials which are typically seen for insurance, legal services, and spots that drive consumers to web sites or an 800 number. Long-form infomercials are typically 30 minutes in length, composed of three to four 7 or 8 minute segments separated by commercials, which serve as calls to action. Infomercial marketing is not for every product, but is most applicable to higher priced products where specific demographic information is worth the investment and where the consumer needs more education about the product,in order to make a purchase decision.
  • Cable TV, print and radio, remain an effective way to target niche audiences. Television, among the traditional media, still drives the largest number of consumers to online purchases.
  • For the future, we predict a convergence between TV and online marketing and purchases. Many HDMI TVs and current Blu-Ray sets are already configured for both cable and either WiFi or Ethernet connections. Google and Apple sell devices that combine TV and online access. Netflix and Hulu serve content through either TV or online devices.
  • We see the future of TV as a device which will consume all media. As access to rich databases of consumer preferences and purchasing proliferates we see growth in content which will be increasingly tailored to personal preferences and desires of highly fragmented consumer demographics.

You can contact Peter Koeppel at pkoeppel@koeppelinc.com   URL: www.koeppelinc.com

Key Words: Sales & Marketing, Media, Audience, Choice, Fragmented, Devices, Purchase, ROI, Targeted, Facebook, TiVo, Apple, Google, Data, Privacy, Mobile, Search, Pay-per-Click, Infomercial, Convergence