Preparing for a Sales Compensation Design Project

This blog post is the first part of a five-part series designed to provide you with guidance and thought leadership for the sales compensation plan design process. This first article will examine how to prepare for a sales compensation design project, and will assist you in laying the groundwork for a successful planning process.

When creating a sales comp plan, there is one basic initiative that should be at the forefront of your planning process: you need to involve just the right number of people – no more, no less.

You’ll want to have executive support to ensure incentive compensation is aligned across your entire organization, and you’re going to need interdepartmental participation to secure engagement from everyone involved, but having too many people at the table ultimately dilutes and delays the process. Conversely, if too few people are involved, you won’t have enough information to pull your plans together. It’s a delicate balancing act – leadership buy-in is essential and the stakes are high.

So, how can you set yourself up for success before the very first meeting? You can take a moment to think strategically about the team you need to assemble, and bring together members that you know will be dedicated to and engaged in the planning process. This is whom we’d recommend you have on your design team – when all these people are in the room, you’ll be on the right path to creating a winning sales compensation plan.

Sales

A senior representative from Sales (VP, Director, etc.) is the person best connected to both company goals and staff capabilities. They will keep the expectations of other executives grounded and reasonable, but they’ll also help you achieve more by pushing for ambitious stretch goals.

Marketing

While this has not always been the state of things, Sales and Marketing need to be able to work hand in hand. A senior representative from Marketing can share information on upcoming campaigns, integrated marketing initiatives, and other announcements that may affect the flow of sales.

Operations

Sales compensation plans often affect processes, so it is imperative that you have someone from Operations in the room. They can tell you what processes would need to change to accommodate the desired outcomes of the new plans. They’ll be able to say, “If we compensate on X incentive, we will need to change our data flow in Y way.”

Compensation Analysts

Having a compensation analyst on your design team will provide you with insight and understand into how new incentive compensation rules will affect payouts. Are the rules reasonable given the current compensation structure and capabilities? Your comp analyst can provide you with the answer.

Additional Team Members

If possible, have a sales team representative “gut check” the feasibility of the sales performance plan. This will help you structure your incentive plans to accommodate the role your reps play in the sales cycle.

It may be valuable to invite a third party to the team meetings; someone like a sales compensation consultant, who’s unbiased opinion can help settle debates and neutralize office politics. A consultant can bring industry knowledge to the table, and may have suggestions you wouldn’t have thought of.

Pulling the Plan Together

With the right number and balance of team members, you’re more likely to have success with your sales plan in a difficult market. Collaborating with the right collection of people will enable you to create a sales plan that incorporates the needs of everyone involved. Once you have that team in place, you can start to leverage insights and build your plans!


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Preparing for a Sales Compensation Design Project

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