The pandemic has turned the world on its head. The work order has transformed, and priorities – work-life balance, working from home, sustainability – have been rearranged. As employees, particularly sales professionals, adapt to the new normal, organizations, too, must recognize this seismic shift and attune themselves accordingly.
For sales representatives, adapting to the change is cumbersome, which is why companies must take measures to enable a frictionless and expedited transition. Companies can do this by building comprehensive compensation plans that benefit both the sales staff and the organization.
New compensation plans provide the company and the sales staff with the right opportunities to align the overall vision with personal goals. Following these five high-level steps can ensure that your company gives its sales team the best compensation plans while increasing the chances of higher revenue.
5 simple steps that will help you create an effective compensation plan
1. Get the compensation planning team right
The sales team influences different functions within an organization. To chart out the right compensation strategy, you must brainstorm with the representatives from sales, human resources, finance, product, marketing, and legal teams. It will ensure the potential compensation plan is in line with the company's vision, budget, and regulations. Also, the inter-team alignment will ensure the company makes progress while reducing red-tapism.
2. Get the compensation data right
No strategy can be based on assumptions and whimsical expectations. When the right team is in place, it must have the relevant data to understand, analyze, and expound. Collecting data from different trusted sources ensures a comprehensive data set that provides actionable insights.
Data will give your team access to market rates for commissions within your sector or location, number of sales professionals, salaries, number of opportunities present, and risks, among others. It helps formulate the right ideas and prepare for risks with effective mitigation plans.
3. Get the compensation philosophy right
Sales roles cannot be pigeonholed into one specific type or purpose. There are often varying degrees of complexity and involvement in every sales deal; it is essential to bind all of them together with the right pay philosophy.
Details in this phase will help your company determine how you want to pay high- and low-performing sales reps, what percentage of commissions the sales staff should get, and what targets and objectives should be provided to drive performance. It will also help you set the ground rules for collaboration and complex deal payments.
4. Get the compensation mix right
Establishing the right pay structure and range minimizes the risks of erroneous payments and conflicts in the future. Determining different factors such as base pay, commission percentages, tangible reasons for clawbacks, bonuses, and increments, among other things, increases transparency and boosts the morale of the sales staff.
5. Get the compensation tools right
A modern, high-functioning sales team needs modern, high-functioning tools. Technology is a key enabler in today's environment, and the sales team needs that extra dimension.
Robust sales management platforms cut down on mistakes, eliminate late payments, and add a layer of transparency and flexibility. Sales teams can check their numbers, pull reports at their convenience, and use them to drive better efficiency. Leaders, too, can check in on their team's performance and readily change KPIs according to the team's needs or weaknesses. It provides the key to unlocking higher sales and ROI.
With Blitz, you can give your sales team the advantage of a cutting-edge, powerful platform that will help you automate your commission processes that can help push their sales much higher. It’s a win-win situation. Contact us today for a free demo!