Q1 Sales Compensation Plan Check Up—See What’s Working
You just went through the hell and torture of incentive compensation plan design. You got all the right people in the room. You arm-wrestled over sales quota allocations. The last thing you want to do is go back through the entire sales compensation process again.
But to put it bluntly—the world doesn’t work on your schedule. Alas and alack.
Three months into the calendar year, you will have enough sales performance data to review your new incentive compensation rules. Are they doing what you want? Chances are, some are working, and some are not.
So pull yourself out of the self-induced fainting spell, and let’s get started.
- Clear half a day in your schedule. It’s never too early to start analyzing the impact of different content special incentive funds (SPIFs) and incentive compensation plan rules.
- Generate customized sales performance reports for a holistic view of your sales team’s performance across each territory, product, and channel. Look at your margins. Delve into each bonus plan and sales commission structure.
- Decide what’s working. What elements of your compensation plans are doing the best? Are you leveraging all elements of your incentive plan? Look at your highest performers. What behaviors have they put into practice that you could incent others to emulate? What about your lowest performers—Would some 1:1 training help them perform better, or is it time to pull the plug?
- See what’s not working. Did you start a SPIF that only paid two people? Are all your sales people struggling to sell one particular product? Use your analytics reporting functionality to achieve detailed insight and visibility into which parts of your compensation plans aren’t doing what you want.
The next step is figuring our how you can optimize. You need to get rid of the elements of your incentive compensation strategy that aren’t working, or change them so they work. This is the topic of my next blog—See (and change) what’s not working.
Do you know your cost of sales? What about revenue versus sales commissions paid? Make sure you’re on track and use the right metrics to measure sales effectiveness by listening to our webinar with Sibson Consulting—Test Your Sales Comp – Is This Thing Working?
CFO Call to Action: Aligning Sales and Finance
Sales and Finance are notorious for butting heads. Finance makes life difficult with their penny-pinching ways and Sales adds fuel to an already hot fire with their never-ending requests. But the days of contention between the two are numbered. Find out how technology is the solution to bridging this long-standing divide.