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Alignment Through Compensation

By Steven

I recently completed a compensation workshop with a client and was pleased that the final results led to a complete alignment of the firm's distribution organization. Proper alignment across Sales, Marketing, and National Accounts is one of the fundamental keys to distribution success.

The heightened role of research analysts at broker/dealer firms is decreasing the relative impact of wholesaling and marketing efforts. Neither group can begin to impact asset flows without National Accounts' role in getting products on the right shelves. National Accounts, therefore, must be structured to ensure that the company's products are on the right platforms and recommended lists, and that the firm achieves the best internal profitability while maximizing revenue generation potential and the strategic value of each relationship.

Alignment needs to continue throughout the Sales organization so that Divisional Managers, external wholesalers, internals, and hybrid wholesalers are all measured on the same success metrics. This should include both qualitative as well as quantitative measures.

Nirvana would be attained if Marketing would work in concert with National Accounts and Sales. While rare, a few firms in the industry have started to compensate Marketing organizations on certain sales objectives. These objectives are usually tied to the success of specific value-added programs or a combination of sales and firm wide success.

Only once all parts of the Distribution organization are properly aligned will firms be able to get the most of each distribution relationship.