Don’t fail over bad sales compensation plans

By Helena Hernández

What’s preventing you from reaching targets?

Maybe you landed on this blog post because you are falling short of your sales goals. Therefore, you are going back and forth trying to find out where the issue is. You are on time to do changes. It is very possible that the main reason behind this problem is that your sales compensation plans are not working correctly. Don’t let a bad compensation plan make your business fail. Here’s what we recommend.

Sales compensation plans that lead to bad performance lack well-defined best practices. A bad commission plan will not drive financial performance. Don’t forget that strategic and business planning is key to every business decision. Therefore, a compensation plan alone will not do big changes.

Planning involves defining specific KPIs. These should be team oriented, should be set to encourage collaboration. Align your sales compensation plans KPIs with your overall business objectives. Which KPIs should you measure in your commission plan? Click here to know even more about this theme.

Are you performing evaluations with your sales compensation plans? Always remember to do this periodically. Tie your evaluations with your sales compensation plans. And, identify meaningful metrics for each sales position. Your evaluations should be simple to create and provide accurate feedback to each sales team member. Otherwise, your commission plan will start failing.

For accurate sales compensation plans evaluation, sales directors should regularly track achievement and sales process. But, you may be experiencing complications if it is not clear what to measure or how to measure it. Companies managing a big amount of data coming from different sources have complicated processes. Issues come in when it becomes hard to identify the information that best contributes to measuring sales success.

To make this problem disappear, sales departments should use a sales compensation software like Blitz. This software will provide the right analytics. Salespeople will be able to see their goals and progress all in one place. Blitz will give your sales compensation plans proper attribution to metrics. And, your sales teams will be able to see how each channel, project, deal, and teammate contributed to those goals.

Consequences of bad sales compensation plans

We have mentioned it before, and we will not get tired of saying that sales compensation plans should drive good behaviors. Doing the right things consistently, including the commission structure, will lead to long-term business success.

Think about this, maybe your current sales compensation plans are causing your team to split off. Avoid sales compensation plans that provide commissions for division vs company-wide performance. These kinds of compensation plans endorse individualist behaviors where overall company success comes secondary. Then, the firm suffers.

Take care of your sales team, your business outcomes and keep your sales compensation plans under observation. Make the necessary changes and avoid failure. Think commission plans as vehicles to business success.


Construction Executive

Tags: Commissions, Commissions Management, Sales

About Blitz

Blitz is a global software for sales commissions. We help our clients to track and calculate sales commissions effectively and on-time.