Sales compensation and commission plans should work for you and your team. In an ideal world, these plans are good for the sales representative and generate compensation that is both motivating and fair. These plans must also benefit the management team in their utility, ease of use, and simplicity yet effectiveness. It should be win-win. What do you do, though, if it’s not win-win, or if there are some hiccups in your perfect plan? First, it’s important to identify the issue in order to move forward. Here are 7 common mistakes that occur in compensation tracking to avoid:
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Communication breakdown: You can have the most wonderful compensation plan, but if it isn’t communicated to members of your team, what is its point? Representatives that do not know the ins and outs of their compensation plan, cannot take full advantage and are not properly motivated. Make sure any new strategies or changes are clearly communicated.
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Overly complicated: A sales commission plan is only as good as its utility. If sales representatives cannot understand a compensation plan, it fails in its effectiveness. Remember, a compensation plan should be a win-win without time consuming and complex issues. Make sure your plan is simple, effective, and useful.
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Reuse old plans: A sales compensation plan is a map to best achieve representative effectiveness. It should be tailored to your team specifically. It may seem convenient, easy, and smart to reuse old plans, but incentivizing employees takes creativity and some semblance of novelty. Old plans are less exciting, and leave little room for improvement.
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Ignoring monitoring and evaluation: Sales commission plans should be evaluated for effectiveness and for appropriateness. A plan cannot simply be implemented and left to its own devices, but must be refined and improved at every chance. Monitoring and evaluation open opportunities to adjust sales quotas to meet changes in market trends and incentivize employees for creativity and productivity.
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Rushing a plan’s design: It can be tempting to get a sales commission plan in place as fast as possible in order to capitalize on employee motivation. As mentioned, though, a plan must reflect your team, market trends, and organizational goals. This takes some time to plan and implement. Taking the time to design an effective plan on the front end can ensure fewer problems down the line.
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Creating the same plan for different positions: Each role and position has a different job description within your company. An employee’s work should reflect their specific job descriptions, and any incentive remuneration should reflect and encourage work that meets the expectations of the position. Every role and position should have a plan tailored to the expectations and goals that you have and hope to foster in their work.
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Designing a plan with out-of-date data: Data should drive your commission plan, and that data should be the most up to date information. Your team benchmarking goals cannot use old data and still be the most effective in reaching company objectives. Make sure your data is working for you as you update your sales compensation plan.
You want to increase your sales turnover rate, right? An effective commission plan can get you there, but you want to make sure to avoid these common compensation plan mistakes. In 2021, it’s time to employee the best in the business and look to Blitz for all your commission plan software needs. Reach out to a member of our team today and find out more about what Blitz can do for you. Find more information at blitzrocks.com.