“The comp plan is the caboose, not the engine” – Doug Holland.
Sales compensation plans allow companies to produce targeted results by rewarding sales reps who are responsible for those results. Therefore, this should be perfectly illustrated with sales compensation plans. The efforts of your salespeople motivated by sales commissions contribute directly to your company’s bottom line.
As a result, the priorities of your sales strategy should be perfectly represented in your sales compensation plans. Ultimately, these will drive the desired behaviors in your sales departments. Then, your sales strategy and your sales compensation plans should be perfectly in sync.
Don’t work at cross-purposes and align your sales strategy and the sales compensation plans you are going to apply in your sales department. If your business evolves, your sales department should evolve as well. Also, sales compensation must evolve to support that change.
As a matter of fact, compensation issues are often symptoms of bigger problems. Remember that sales compensation plans are the connection between your sales strategy and front-line performance. Therefore, your business will go where your sales compensation plan lead.
The process to align strategy and sales compensation plans
To have the ideal commission process, you must deeply understand every point of your sales strategy. Look at existing roles and account alignment to review your sales structure. Then, link incentive compensation and performance with aspects of your sales strategy like targets, goals, thresholds, measures, priorities, and mechanics.
An important point for your sales strategy-commission plan alignment is to set realistic goals. Read this piece of information and learn more about goal setting. Without realistic goals, credibility and success could be affected. In fact, unattainable goals lead to uncertainty instead of confidence within your sales team. Salespeople could feel they are set up for failure rather than success when sales compensation plans should reward success.
With a sales compensation software like Blitz, spread the trust in your sales team. Moreover, obtain all the data you need to set the accurate goals that will keep motivation up and lead to successful performance. Click here and see how you can turn your sales compensation plans as part of your sales strategy. Plus, relying on salespeople to be closers will turn them in the most productive business generators.
Source
Donnolo, M. (2013). What your CEO needs to know about sales compensation: Connecting the corner office to the front line. New York: AMACOM.