With the start of a new year comes new sales and incentive plans. As the foundation and main performance driver for the year ahead, getting compensation right is critical. With a strategic sales plan, companies ensure they have the means and direction to reach their goals. Successful sales plan rollout and analysis are key to sales team productivity.
Sales plan rollout ensures that new plans (e.g., territories, quotas, compensation, etc.) are communicated with the broader sales organization so that everyone understands the company’s goals and expectations. Year-round analysis then ensures your plan and sales reps are at peak performance.
Traditionally, rollout follows an annual planning process completed at the end of each year. But there’s a problem with this approach—it’s outdated and isn’t getting you off on the right foot. Today’s world is changing too frequently to rely on a plan you created when circumstances were entirely different. Success in present-day markets requires agility, adaptability, and swift decision making that can only be achieved through continuous sales planning.
To help you effectively roll out and analyze your plan, here’s your 12-month guide to articulating your sales compensation plan in 2021.
Your Sales Compensation Plan Rollout Team
When you designed your sales compensation plan, you likely had a planning team that helped piece together and align team incentives and goals. During sales plan rollout, members of this team will also play a vital role in successful plan communication.
Sales Operations (Sales Ops)
Key Role: Making sure the implementation follows the intended strategic direction
- Develops reports for field and leadership teams to track pay and performance
- Collects plan acknowledgment signatures
- Trains reps for new responsibilities
- Coordinates with other departments to ensure a seamless implementation
Human Resources (HR)
Key Role: Ensuring capacity needs are met and pay is fair
- Creates job descriptions and assesses if anticipated pay levels are competitive
- Hires/fires based on sales capacity and territory designs
- Answers questions regarding the new compensation plan
- Provides process feedback from field teams to leadership
Key Role: Finding gaps and identifying risk
- Creates accrual models for the new plans
- Identifies exceptions to the model and monitors risk
- Finalizes prior year results and alerts teams of any potential gaps in the final sales plan
- Makes sure the data coming in is sufficient to assess plan results and risk
A Year-Round Sales Compensation Plan Rollout and Analysis
With the new sales plan in hand, companies often opt to roll out plans during their annual sales kickoff event at the start of a new fiscal year. While this is, in fact, the best time to roll out your sales compensation plan, it’s still important that your plan is analyzed year-round.
Start of the year: The plan is launched; however, during any launch, there could be issues.
The first month should be focused on plan communication to sales leadership. As the plan is shared with the broader team, leaders should be looking for gaps from the previous year’s plan that can be solved with the new plan.
- Successful sales plan launch
- Building on prior year’s results
Once the sales plan is launched, sales leaders should start identifying exceptions. These are your “we didn’t see this coming” scenarios, such as specific pay disputes, performance different than what was modeled for, etc.
- Nailing down reporting
- Identifying exceptions
Month three should be all about simplicity. Leaders should prioritize reducing sales compensation plan exceptions and simplifying plan administration and reporting.
- Simplifying of process
- Reducing plan execeptions
The fourth month after plan rollout should focus on Q1 tracking. Leaders should have identified gaps and started formulating contests that can help fill in gaps and increase the frequency of specific sales behaviors.
- Q1 tracking
- Contests/SPIFs to fill gaps
Middle of the year: Sales gaps are being identified and next year’s needs are being outlined.
In month five, you should continue the analysis to ensure your sales compensation plan is driving the right sales behaviors. Additional training and team adjustments may be made to help this.
- Sales training and adjustments
At the halfway point in the year, leaders should reassess processes to identify where longer-term adjustments are needed. Senior leadership and sales compensation planning teams should begin thinking about next year’s plan and how to improve it (Find tips for easier sales commission planning here).
- Assessment of processes
- Start analyzing trends from the past six months
The seventh-month mark should prioritize increased productivity. Leaders should take initial steps towards planning for next year.
- Simplifying of processes
- Contests for Q4 productivity
- Initial planning for next year
The sales compensation planning team should be built and gathered together during month eight. This team should focus on organizing initial plans and begin modeling.
- Sales plan parameters decided
- Strategy for next year
- Second half of current year strategy
End of year: Resources are mustered to develop the plan for next year and budgets are formed.
Planning should be in full force in month nine. Leaders should be modeling territories, capacity, and compensation to identify any potential gaps they can foresee.
- Resources mustered to create the sales plan
- Initial sales plan discussions
By month ten, the sales compensation planning team should submit an initial draft of the sales plan, including the required means to boost productivity, including needed technology, process, people resources (Learn more about sales capacity planning).
- Initial sales plan submitted
- Productivity boosters identified (tech, process, people resources)
Month eleven should focus on plan modeling. In month nine, leaders began modeling individual parts, and now they should begin modeling the plan as a whole.
- Modeling sales plan
Leaders should make final tweaks and finishing touches on sales plans in month twelve. They should gain final approval and start preparing for the plan launch.
- Gaining final approval of sales plan
- Preparing for launch
Make Continuous Sales Compensation Planning and Analysis Easier
Sales compensation is the driver behind successful sales organizations. Real-time analysis helps companies be proactive, identifying exceptions and gaps before they derail performance. Using a Sales Performance Management (SPM) solution, you can centralize data and make it more accessible across your entire organization. This allows you to continuously analyze, adjust, and drive top performance.
For more tips to adopt continuous sales incentive planning, download our guide, “The Enterprise Leader’s Guide to Success in the New Sales Era.”