8 SPM Best Practices for the New Year
New year, new you, right?
If you’re like the majority of people you’ve selected a few resolutions for 2017. Maybe this year will finally be the one where you drink eight glasses of water every day, or take 70,000 steps a week.
But one thing that should definitely be staying in 2016, along with everyone’s poor habits, are crummy sales compensation plans. It’s 2017 people, and there’s simply no excuse for allowing your company to tolerate poor sales compensation – not when the sales transformation process has the potential to completely turn around a rep’s performance, and thus help your company reach its desired goals.
Here are eight best practices to keep in mind as you put the final touches or changes on this year’s plans:
#1 Let data be your guide: When you design a sales compensation plan without using empirical data, you simply don’t have any way of knowing the industry specific benchmarks that demonstrate how your compensation and incentive plans compare with your peers. Designing without this visibility leaves you guessing, wondering, and relying on your gut for metric decisions that should be made based on unique industry insights.
#2: Differentiate by role: Many sales organizations don’t differentiate by role, but this is a mistake. People like to know where they fit in the team. Knowing that their specific role can help the company meet its goals inspires each employee to perform better.
#3 Automate: Often, sales information is gathered from several different sources of truth, while other times it’s simply erroneous – the result of spreadsheet errors or a manual process gone awry. Inaccurate and outdated measurements won’t motivate success or deliver the results you want. If you’ve already hopped on the CRM train, the next stop is SPM automation town.
#4: Provide quota relief: Lowering a rep’s quota due to extenuating circumstances can be necessary, and may even result in higher performance. It’s all about market consideration. Let’s say there was a major natural disaster in a rep’s territory. It’s likely to legitimately affect his or her ability to close deals. Relief should be considered in this instance.
#5: Promote cross-sellers: If you want to promote a rep to a management position, don’t fall for the common mistake of promoting your best Account Exec. Instead, look for reps that cross sell like champs. Why? Great cross-sellers are skilled at seeing things from different perspectives. That’s a trait that is more likely to help them succeed in a management role.
#6: Experiment with incentives: Has it been a while since you used a SPIF? Maybe it’s time to put more than just cash on the table. Tap into your reps’ personal interests. For example, Super Bowl tickets, an iWatch, or an expensive bottle of wine can outweigh a bonus check of equal value if it’s tailored to fit the personalities of your team.
#7 Build a recognition culture: The key to tapping into and leveraging a “recognition culture” lies in finding ways to sincerely recognize and reward all employees. That means not only recognizing their unique talents and contributions, but also recognizing them in ways that are meaningful to them.
#8 Eliminate commission caps: Capped commission plans sabotage your efforts to motivate your sales force, sending employees a message to stop trying once they’ve reached a certain level. Plans that are capped too soon also tell employees that you’re not looking out for their best interest, which can result in feelings of mistrust.
Do you have any business resolutions this year? Tweet @Xactly and share them with us!
Designing Sales Compensation Plans
With careful consideration and strategic design, you can use incentive compensation to inspire your teams and empower them to perform above and beyond the competition.