It’s amazing how people will do what we pay them to do. But how well are you defining what you want done? It all boils down to how you define success. Who is your best?
If you don’t know how you measure success, you can’t write a really good incentive compensation plan.
Here is how some of Xactly’s more than 450 customers define “best” when it comes to their sales people:
- Most revenue
- Always beats quota
- Most margin
The better you can tie incentives to specific objectives, the better your team will do.
To define what best means for your organization, ask these questions:
- Which of our products have the highest margin?
- What territories are most profitable?
- When should we drive individual performance? What about team results?
- Do we want reps to continue selling after they hit quota? (If yes, consider multiple accelerators at different levels.)
Once you’ve identified your answers, you need to work backwards to integrate these key objectives into each component of your sales compensation process. This streamlines your sales objectives with your business goals.
Then, you need to clearly identify—and communicate—how you’ll measure success. We recommend limiting yourself to three metrics.
Your decisions may impact any or all of the areas below:
- Variable pay
- Base pay
- Presidents club attainment
- Discount rules and incentives
- Quantitative vs qualitative metrics
Check out this story of an SMB that saw dramatic sales results after they went through this process: Increase sales motivation while improving visibility and reducing errors.
So, how do you define best?
