I have some news that might be unsettling for you- today is the first day of fall. And we all know what that means: Pumpkin spice lattes are back at Starbucks and your Facebook feed is about to be full of people picking apples and frolicking through orange leaves. While all that may be true, if you’re in the business world, fall is the time to stay ahead of the curve for the upcoming sales planning season, which is just around the corner. The sooner you can prepare for next year, the better off you’ll be. The problem is, we all know that the calendar goes August, September, January. The holiday months seem to go by in a blink as we all rush around making travel and party plans. The earlier you get your compensation planning done the better off you are, and the more likely it is that you will be able to build a strategic, impactful sales compensation plan before holiday madness sets in. Here are a few steps to keep in mind for a winning sales planning process.
Avoid Too Many Cooks in the Kitchen
The first step when thinking about how to develop a sales compensation plan is to involve the right number of people – no more, no less. It’s imperative that you get executive support for incentive compensation across your entire organization, but having too many heads in the room means too many agendas. Alternatively, if too few people are involved, you won’t have the data or visibility you need to put together meaningful plans. Leadership buy-in is critical and the stakes are high. Sales, Finance, Operations, and a Compensation Analyst should all be represented.
Know Your Sales Planning ABCs
Now that you understand who should be involved in the sales compensation design process, you’ll want to think about the components of a sales compensation plan, as well as a few major principles that should guide you as you build your plan. At Xactly, we like to think about them as the “ABCs” that form the foundation for well-designed sales compensation plans: Aligned to sales roles, Based on company culture and philosophy, and constructed to drive the sales behaviors you’re looking for.
Communication is Key
Next, you must communicate the plans to sales team members and execute your strategy to perfection. This is a critical step, as even the best plans have a chance to fail in the event of an inadequate rollout. To do this, you must ensure your sales managers are effectively communicating plans by asking these questions: Are the sales objectives clear? Are the compensation plan details clear and easy to understand? Does everyone understand the importance of compensation management and commissions tracking to the new plan leadership to ensure success from the get go. But for all the tactical and strategic planning that goes into setting yourself up for growth and progress, no plan will ever truly push the envelope from good to great until it layers on an understanding of the roles and systems present on the human end of the equation.
Automation is the way forward when it comes to comp plan design, only with rock solid insights and strategic planning can you truly inspire performance with your compensation plans. This blog post gives you a few helpful hints to get yourself thinking about the various aspects of designing a sales compensation plans that helps you reach all of your goals. For a more in-depth and step by step outline of how to design a great sales plan, take a look at our guide, Designing Sales Compensation Plans.