Now that the first half of the year has come to a close—let’s pause for a collective sigh of relief—it’s time to give your incentive plans a good look.
What metrics are paying out? Who is winning, and why? Has the market changed enough for you to do a SPIF?
Last year, only about half of sales teams met quota, and this year, quotas are up by 93% more (CSO Insights).
Here’s an action plan to make sure your company’s commission plans inspire the results you want in 2012.
1) See What Is Working:
- Clear half a day in your schedule. It’s never too early to start analyzing the impact of different content special incentive funds (SPIFs) and incentive compensation plan rules.
- Get all the right people in the room. Too many people means too many agendas—but if too few people are involved, you won’t have enough information to gauge your plans’ success.
- Generate customized sales performance reports for a holistic view of your sales team’s performance across each territory, product, and channel. Look at your margins. Delve into each bonus plan and commission structure.
- Get granular. What elements of your compensation plans are doing the best? Are you leveraging all elements of your incentive plan? Look at your highest performers. What behaviors have they put into practice that you could incent others to emulate? What about your lowest performers—Would some 1:1 training help them perform better, or is it time to pull the plug?
Above all, you want to make sure profits are aligned for your company and your salespeople. Don’t stress if your sales reps are taking home big checks. You created your sales compensation strategy to generously reward high-performing sales people.
However, if your cost per sale is too high, you probably didn’t have right analytics and modeling before you implemented your incentive plan.
2. Change What Didn’t Work:
The next step is to change or get rid of the elements that haven’t worked in your compensation strategy:
- Pull up your incentive dashboards to instantly see which sales reps most need your help. Make sure your team’s quota attainment approximates its incentive plan attainment. If, for example, your team averages 60% quota attainment and 150% target incentive payout, you need to rethink your commission plan.
- Ask the right questions. Did you start a SPIF that only paid two people? Are all your sales people struggling to sell one particular product? Use your analytics reports here.
- Use only metrics that matter. Some of the most popular sales metrics aren’t actually meaningful or truly actionable. You can find out which 6 key metrics to watch on this quick-tip webinar with Sibson Consulting: Test Your Sales Comp – Is This Thing Working?
- Immediately correct what needs to be corrected. Don’t wait until it is too late. If you don’t fix what you can now, you may not be at the table when your team writes incentive plans for next year.
So, how did your sales compensation plan perform in the first half of the year?