Sales Commissions Blog | Blitz

4 ways sales compensation plans could be easier

Written by Mauricio Duran | 07.06.2018

Make it simple… and accurate

Complicated sales compensation plans give rise to redundant administrative problems and lead to salespeople disappointment and constant rotation. Sales directors should design commission plans as simple as possible. Consequently, compensation will be easier to manage and track. And, it will be clear to salespeople what they are to achieve. Avoid using endless measures in your commission plan.

Complexity in your sales compensation plans is disastrous for your company pay strategy. Therefore, we want to help you by explaining 4 ways to make them easier and simple to understand. Follow these and have the standards to follow in your commission plans.

1. Specify the plan goals and objectives

Before making a compensation strategy, figure out what do you want to achieve. Write down and prioritize your business objectives. Then, your sales department will have a solid foundation on which developing accurate sales compensation plans will be possible.

Structure commissions around the achievement of these sales department goals. Salespeople will have more control over their accomplishments. And, at the same time, your sales compensation plans will be key motivators for your sales department. Click here and learn more about sales goal-setting.

2. Don’t get too excited about success metrics

Your sale team performance is at risk when reps don’t comprehend the sales compensation plans and their metrics. Too much metrics means too much confusion for your sales reps. For example, if you have four products, each has its own target revenue goal and metric. Therefore, you already have eight metrics. Plus, the overall performance number or rank which sums a total of nine metrics to consider.

Find the right balance in the number of metrics you will apply to your sales compensation plans. Thereupon, enhance performance without getting your salespeople confused. Keep your sales team focused and delivering great results.

3. Avoid micro-managing your sales compensation plans

Micro-managing limits salespeople abilities to treat customers and to achieve goals. If you already have specific goals and rules for your sales compensation plans, let your salespeople work hard to earn their commissions. Plus, micromanaging adds unnecessary activities to sales directors. Also, it could be time-consuming and it can slow down the compensation workflow.

4. Automation

Manual processes and spreadsheets are making commission tracking complicated. Spreadsheets are powerful mathematical tools. But, sales compensation plans are much more than just math. Therefore, automation is the solution you are looking for. Using a commission tracking software will let you see the whole commission panorama: accuracy, missed payments, transparency, and analytics.

When looking for a compensation software, remember to consider Blitz. It is the tool that will make your life easier when it comes to processing, tracking and analyzing sales compensation plans. You can schedule your Blitz demo here, check out all its features.

Less is more when designing sales compensation plans. Take a headache out of commission tracking and implementation. Eliminate distractions from your sales reps and see them deliver great results.

Sources

Society for Human Resource Management

Farley, John U. “An Optimal Plan for Salesmen's Compensation.” Journal of Marketing Research, vol. 1, ser. 2, 5AD, pp. 39–43. 2.