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Gamifying Sales Comp

By Denis Pombriant
Aug 5, 2015 12:27 PM PT

Microsoft earlier this week announced that it has bought FantasySalesTeam, a sales gamification platform. The intent of the product is to boost sales productivity. The gaming part is designed after some aspects of fantasy sports leagues in which participants build a team from known professional athletes and try to beat other teams. The team aspect makes everyone more competitive, and the goal is to improve everyone's performance.

Gamifying Sales Comp

OK, I get it -- but I wonder if this is the best approach to improving sales. We're always trying to improve sales, but it seems like we're always failing -- while also bringing out new products that will do the job better.

It reminds me of the long history of antacids. You can go back in history and know what decade it is just by peeking at the ads for heartburn cures -- Alka-seltzer, Brioschi, Pepto- Bismol, Maalox, Tagamet, Nexium and many others -- but we still have heartburn.

If you see a pattern like this, it's reasonable to ask if you're just treating the symptoms and you haven't identified the root cause. I'll leave heartburn to the doctors, but for many years -- and even centuries -- we have incentivized sales people with money (the carrot) and job loss (the stick). That wasn't enough?

Imagining What-Ifs

Every business is unique, and its processes and people reflect this. In the past, we've seen sales improvement prescriptions that include methodologies, technologies, coaching and many other things.

Yet surveys of sales organizations show that improving management -- through things like having and enforcing a defined sales process with appropriate technology support -- does a better job.

The gamification approach, in my mind, skirts the real issue, which is managing through incentives. Rather than gamifying anything, I think the real issue is individualizing the incentives and applying them across the whole organization and all product lines. It's a big data problem, and you can't manage what you can't measure. I see a pattern emerging.

By applying gamification, the hope is that sales people will be better at self-monitoring or peer-monitoring, as well as self-management. However, sales reps already are engaging in a version of this activity, and many businesses are trying to squelch it.

Almost all sales reps now do what's called "shadow accounting," according to the folks at Xactly. They keep a spreadsheet of their deals and calculate their commissions hoping to catch any errors that easily can occur in a manual or spreadsheet-based corporate compensation system.

The theory is that reps spend valuable selling time tracking their commissions and playing what-if scenarios rather than selling. That is time the fantasy engine presumably would take over.

Less Pizza

My preferred approach is to get a real compensation management system like Xactly or Callidus. You could try it with spreadsheets, but one of the big problems with incentive compensation in general is that plans are too unwieldy to manage in spreadsheets or on paper, and they are soon discarded.

When that happens, reps fall into the path of least resistance. They sell what's easiest -- not necessarily what's new and improved, or what management wants to move.

With a compensation management system, all of the details involved with individuals, plans, territories, products, commission schedules and more are handled by the system. It's therefore possible to custom design a plan and enforce it through the technology, rather than relying on gamification.

Please don't get me wrong. This idea may have legs -- I am not terribly familiar with Microsoft's new product, so I don't want to put it down. Gamification is a great tool in the right circumstances -- but I just don't see how this solution solves the problem.

As with antacids, if one doesn't work, you can try another -- but when that approach gets old, it's time to look at root causes and perhaps cut back on the pepperoni pizza. In this case, you might ask if your management technique could use some spiffing up.

Denis Pombriant is a well-known CRM industry researcher, writer and speaker. His new book, Solve for the Customer, is now available on Amazon. He can be reached at denis.pombriant@beagleresearch.com. You can also connect with him on Google+.

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