Common pitfalls in sales strategy and remuneration schemes

Working for a telecom operator in east-africa is reminding me of the old-times of the third-entrants in Europe in the lates 90s. Every visit to the country is giving me some kind of a ‘deja-vu‘ as if I had that same situation in the past. My last deja-vu is related to sales strategy and the approach of our client towards the distribution network and their commisioning plan.

At this point I have to say that fraud, inneficiencies and pitfalls in sales and marketing is one of the major exposures for a mobile telecom operator business. If we consider hot emerging markets, where acquisition is a must, this exposure can be translated into several millions of revenue erosion.

The african operator in which we are currently working is victim of non-competitive incentives for the sales channel, fraudulent actions designed to generate fictitious commissions, (or sales representatives may defraud customers for the benefit of the operator and themselves) and a quantity (vs quality) approach making it really difficult to achieve the sales objectives in the short term, and therefore, to mantain their current market share in the mid term.

There are some lessons in sales strategy to be remembered prior to starting a sales turn-around project:

A) Some sales fraud may be an exaggeration of a previously accepted practice.

B) To understand fraud in sales, the consultant must fully comprehend the sales compensation methods and the related exposures.

C) Executives have their own agenda. Management may protect top performers.

D) Success encourages blindness.

E) The top performers may have “stolen” top awards, honors, and bonuses from those who earned them honestly.

F) Sales fraud success is contagious. It spreads to other members of the sales force, channels and agents.

G) In competitive times managers fighting for sales may turn a blind eye toward practices they would challenge in other times.

But fraud is not the only driver. Main pitfalls include some other topics that can be read in the following slides we prepared for the CEO after a high level assessment of the sales situation:

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