Gartner Says 49 Percent of Account Managers’ Sales Revenue Goals Don’t Distinguish Between Retention and
Growth
New Research Reveals Account Growth Stalling, Compensation Plans Must Be Redesigned to Focus on
Driving Growth
Forty-nine percent of account managers have a single revenue goal that makes no distinction between retention and growth,
according to Gartner, Inc. However, sales leaders note that
account growth is an essential component to meeting their organization’s revenue goals, yet only 28 percent report their
account management channels regularly meet cross-selling and account growth targets.
“In most cases, sales reps look to account growth as a last resort,” said Craig Riley, senior principal analyst at Gartner.
“This is because
today’s sales compensation plans fail to motivate sales reps to grow their accounts; instead single-metric plans allow sales
reps to receive most of their variable pay from renewals.”
The median proportion of sales reps’ overall goal assigned to growth accounts for only 9 percent of sales reps’ variable pay,
which is not reflective of the time and effort required to grow accounts, according to Gartner. In addition, Gartner research also
shows that many sellers don’t actually understand how they will be paid, with only 24 percent of sales reps able to easily
calculate their total variable compensation.
“It’s not surprising that organizations struggle to use their incentive program to drive account growth,” added Mr. Riley. “If
sellers don’t understand how they will be paid, then it is very hard to use compensation to motivate them to perform in a specific
way.”
To solve this problem, Gartner recommends sales leaders re-evaluate how they compensate sales reps to better incentivize account
growth. Specifically, sales leaders should follow three key steps to identify and implement appropriate compensation plan changes
to drive growth:
- Identify Where and How Sales Efforts Fall Short: Sales leaders should diagnose whether sales
rep behavior is aligned with strategic goals by evaluating current sales performance on renewals, cross-sells/upsells and new
revenue against projections and growth targets.
-
Include Account Growth in Compensation Plans:
Motivate sellers using single-metric plans to grow their accounts by using thresholds and pay accelerators to limit their
ability to earn incentive pay via renewals only.
- Ensure Sales Rep Understanding: Improve multimetric plans’ ability to motivate sellers by
having each metric account for at least 15 percent of on-target earnings (OTE) and limiting compensation plans to no more than
four metrics.
Additional details are available to Gartner for Sales Leaders clients in the report
“How to Use Compensation Metrics to Drive Account Growth.”
About Gartner for Sales Leaders
Gartner for Sales Leaders provides heads of sales and their teams with the insights, advice and tools they need to address
mission-critical priorities amid mounting pressures to drive growth through new and existing customers. With extensive qualitative
and quantitative research, Gartner for Sales Leaders helps sales teams combat commoditization and price-based purchasing, develop
critical manager and seller skills, elevate the value of sales interactions, unlock existing growth potential and optimize sales
force enablement.
About the Gartner CSO & Sales Leaders Conference
Sales leaders face unprecedented changes in customer expectations, technology and the talent needed to drive results. At the
Gartner CSO & Sales Leader Conference, taking place September 17-19, 2019 in Las Vegas, sales leaders will learn from the
latest research and Gartner experts covering sales talent, customer buying behavior, account-based marketing strategies and
leveraging digital channels. Follow news and updates from the event on Twitter at
#GartnerSales.
About Gartner
Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip
business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the
successful organizations of tomorrow.
Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions
on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100
countries — across all major functions, in every industry and enterprise size.
To learn more about how we help decision makers fuel the future of business, visit
gartner.com.
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Kelly Blum
571-303-5745
kelly.blum@gartner.com
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