Overlay specialists play an important role in supplementing the skills of the field sales force. With proper structure and compensation, they provide tremendous leverage. However, if you fail to deploy them correctly, they can be a costly drain on the organization. Compensation for the overlay specialist can be problematic. Like a sales rep, overlay specialists should have a quota, but unlike sellers, they are not paid to simply sell. They are also paid to enable and teach others to sell. If the overlay specialists fail to transfer their knowledge, you have not only lost the opportunity for incremental revenue, but you have delayed the self-sufficiency of your reps for another year.
Paying specialists for the revenue produced by everyone they overlay will cause them to devote their time to top performers. This defeats a key purpose of their role. Instead of enabling the field to be proficient with the new product or market, the people who need the most support are ignored. Improper incentive dynamics result in favoritism and defer full implementation of the new product or vertical market strategy.
Solution: Incent overlay specialists to focus on two components: 1) participation, i.e., based on the percentage of supported sellers that contribute and 2) performance, i.e., based on total revenue or unit volume sold.
These can be two separate payout components, or the participation value can be used as a multiplying factor to raise or lower the payout on performance. The table below shows examples of the payout multipliers that are earned depending upon the percentage of the supported team that participates in selling the target solution.
An overlay specialist who rides the success of a single sales rep will only earn a fraction of the potential payout. The multiplier at the Threshold 1 participation level (0% - 9%) would earn only 60% of total revenue sold. The overlay specialist must focus on maximizing both revenue and participation. (Note that the maximum expected participation is only 90% to avoid penalizing the overlay specialist for a “C” player in their mix.) A specialist who enables 90% or more of the overlay team will earn a bonus of 10%.
This overlay sales compensation calculator can help sales leaders take holistic approach to compensation. When using the calculator, sales leaders should follow these four steps to create an effective overlay structure:
Although the steps are simple, this can become a daunting task to balance with the rest of the planning required to kick off a new year. Reach out to your SBI advisor for help creating this type of structure for your team.