Incentive drives behavior.
My company is drastically changing how my commissioned role is paid out. Prior to this change I was incentivized to sell marketing fuel for my clients to help grow their businesses. I was very good at this model, a top performer across 600 people. Now I’m incentivized to grow my clients accounts with additional services the company offers.
The reason I believe for this change is a client becomes more sticky the more products and services they use. When a client is sticky they will stay around longer. Whenever you have a business model heavily integrated into your company’s software and team they are less likely to leave your firm for another. Why? It’s painful to restart and rebuild. The business logic would say stay with what is working and improve upon your services offerings to offer even more value to clients and their businesses.
My company is trying to grow. When clients leave it’s challenging to grow as that’s less monthly revenue coming into the business to reinvest. Thus the change in my commissions is going to incentivize me to onboard new ‘sticky products and services’ to further grow their business models. I’m less incentivized to sell marketing fuel. In fact, this new structure turns my old commission structure on it’s head which poses it’s own challenges I’m excited to solve.
I’ve worked with many businesses in my career and few are capable of changing so often and so fast, while maintaining consistent growth. This is a reason I want to stay working for this company since it’s a rare quality.
However you’re incentivized is going to affect your behavior and performance. If a CEO wants to see more sales, he’ll structure the commission payout in a way that incentivized more sales. If the CEO wants to retain more clients, he’ll structure the business to incentivize this goal.
Always pay attention to what a persons or organizations incentives are. Insurance guys want you to buy their insurance because “it’s risky not to have full coverage.” The barista wants you to buy more coffee and bagles because they’ll make more money. Your spouse wants you to show you care, are dependable, and reliable because they want a successful long term relationship.
Incentives are everything – pay attention to them!