One question sales professionals ask me often is, “What’s the best sales compensation plan?”
The short answer is: there is no such thing. The longer answer is: don’t look for the best compensation plan. Look instead for the best compensation plan for your company.
Sales compensation plans aren’t one-size-fits-most. What yields positive results for your competitors may not necessarily do the same for you. Finding a competitive, results-oriented compensation plan for your organization takes time, but if you use a strategic approach to design the plan that’s just right for you, your time will be well spent. So, instead of asking just one question, ask three:
1. Are we spending the right amount on incentives?
Identify your sales goals and objectives. Do you want to increase performance by, for example, 25%? Increase team productivity by 45%? Generate up to 20% more revenue? No matter what your specific goals are, once you determine and fully understand them, align them with your sales compensation plan. Then, double check your work with the experts — make use of the specialized resources available to you at Xactly Express for small and emerging businesses.
2. Do we provide enough opportunities for our sales team to make money?
Factor all the variables into your new sales compensation plan. Consider personnel structure, the ages of your sales representatives, your industry’s economic climate, and whether or not you are launching new products or services. Then, offer multiple compensation incentives. Using sales compensation management software, take a look at past and current incentives, performance, and territory sizes to determine which sales compensation strategies have succeeded, and which have failed.
3. Can my sales reps easily be lured to a firm with a more lucrative plan?
Reps are happiest when their path to success is clear. So, consider investing in compensation management software that has real-time visibility and allows easy access to data. Balance your new sales compensation plan against business needs. Also, consider removing the cap on your top performers; look outside of a base-pay salary and offer quarterly sales bonuses, if possible. Then, motivate and reward results with various strategies: competitive contests, leaderboards and SPIFFs.
Building the ‘best’ sales compensation plan for your company doesn’t have to be a complicated task. If you ask the right questions, you can simplify, motivate, and grow in no time.