3 Sales Compensation Concepts We’re Thankful For

Jordan Scott
Jordan Scott
In Culture, Inspiration
Jordan Scott is the Content Marketing Manager at Xactly. She attended The University of California at Santa Cruz, and received degrees in Literature and Education.

This blog post is the second part of a five-part series designed to provide you with guidance and thought leadership for the sales compensation plan design process. This second article will examine the three sales compensation plan design concepts that we are thankful for, and show you how to leverage these concepts to get the most out of your sales compensation plan design process.

Sales Compensation plan design is no easy task, and as we move through the holiday season and the tail end of the year, it can feel like a daunting task to take on the whole process on your own. That’s why we’re thankful to have guiding sales compensation concepts to take the pressure off. With data backed, bench-marked plan design components, you’re never planning in a vacuum, and you’re always on the strategic side of the fence.

So, let’s dive into the concepts and components of sales compensation planning that we’re thankful for, and touch on a few of the overarching principles that should guide the construction of your plans. If you use these concepts as the frame for your planning process, you’ll have the foundation for well-designed sales compensation plans. To prepare for the big feast, here’s what you need to keep in mind:

  • Your plans should be aligned to the sales roles.
  • Your plans need to be rooted in your company culture and philosophy.
  • Your plans must be constructed to drive the right sales behaviors.

Your plans should be aligned to the sales roles.

At the heart of sales compensation design is the concept that different sales roles will require different compensation plans. Just think – when you’re preparing for Thanksgiving, do you start by cooking the meal and then asking who wants to have what at the table? Sure cranberry sauce is a time-honored tradition, but no one in my family is partial to the stuff, so we don’t waste time preparing it. Different roles have different asks and needs in the sales process, and your plans should be tailored to what you are asking of each role.

Your plans need to be rooted in your company culture and philosophy.

Your company has a distinct culture, and before you get into the stage of designing plan details, you should consider a pair of key questions about the culture you want to found in your sales organization:

  • How do you want your pay to be compared to the current market trends?
  • What is the difference in pay you want to establish between your high and low performers?

Think of this as your own first holiday dinner– you get to set the tone for a timeless tradition, and the answers to the above questions will help you think through how you want this tradition to unfold. However rewarding or punishing you want your plans to be, remember that you’re establishing a yearly precedent, so be sure your bench-marking data is farm-to-table fresh.

Your plans must be constructed to drive the right sales behaviors.

A well-built compensation plan must be, at its core, aligned with the goals and objectives of your company. If the idea is to share the mashed potatoes, you can’t present them in a single-serving ramekin with a soup spoon. So, consider what your corporate goals are for the year – what are your revenue targets? What are the requirements for new product or service introductions? When will the ham be done? Make sure that you keep your plans simple and focused – if you do, both sales reps and managers will know what they are aiming for, and ultimately, you’ll be able to drive the right sales behaviors.


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3 Sales Compensation Concepts We’re Thankful For

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