The Right Way to use Compensation: To Shift Strategy, Change How you Pay your Team

As start-ups grow, their strategy shifts, and aligning the sales force with the new direction is critical. Incentive systems should be revised to focus representatives on the new goals during each phase of the shift. The marketing firm HubSpot illustrates how this plan can be developed and implemented. HubSpot promoted rapid customer acquisition during the first phase, then shifted to emphasizing customer retention, then moved to encouraging sustainable growth. Sales contests led the way: contests were aligned with short-term changes, and were team based; prizes were also team based. Updated standings were communicated daily. Time frames are important: month-long contests are optimal. Firms, however, should resist launching multiple, simultaneous, and overlapping contests.