Toward an overdue transformation in sales commissions
Telco players are under pressure due to increasing commoditization of services , declining core revenues as well as high infrastructure investments . Therefore , they need to revamp their sales and go-to-market ( G2M ) approach to secure market positioning and enable future growth . A key component of this endeavor is sales enablement and steering through refining and optimizing commissions for dealers and internal sales units .
Outdated , complex and inefficient legacy systems
In general , many commission schemes have historically grown overwhelmingly complex due to new or adapted tariff options , promotions , or other marketingrelated campaigns , setting the scene for inefficiency and frustration . Moreover , partner structures continue to require increasingly convoluted setups and contractual agreements which enable fraudulent behavior by agents .
Additionally , changing customer behavior poses challenges to commissions schemes in a variety of ways : On one hand , a growing focus on digital sales channels requires careful balancing and harmonization of on- and offline channels and their respective commissions . On the other , customers are more aware of being able to exploit attractive contract offers when switching providers . This , in turn , puts pressure on providers to create and market such ‘ switching offers ’ to offset their own churn which significantly drives subscriber acquisition costs .
Because of these sustained outdated structures , the commission budget is often not allocated to the most impactful points
Optimizing these outdated legacy systems means designing commissions as simple as possible , but as comprehensive as necessary , with enough built-in flexibility to adapt to changing market environments .
FINANCIAL BENEFITS OF OSCs
up to + 5 %
up to up to + 10 %
COMMISSION COST up to
EBITDA MARGIN of sale , i . e ., digital sales , but rather stays locked up at offline transaction points , i . e ., retail shops . Despite their role in differentiation , sales commissions are often not at the core of strategic considerations . Optimizing these outdated legacy systems means designing commissions as simple as possible , but as comprehensive as necessary , with enough built-in flexibility to adapt to changing market environments . However , the cost and effort of transforming such legacy commission schemes often seem so lofty that plans to alter them are left unfulfilled .
Benefits of optimized sales commissions ( OSCs )
By transforming outdated commission schemes , OSCs ensure a company ’ s success in several ways : Alignment with
Source : goetzpartners