The Best Compensation Plan Will Fail If You Can't Sell It

Nov 10, 2016
4 min read
You need a sales compensation plan to succeed, but your sales team must buy in for it to truly be effective. Here's how sales leaders can communicate new plans.

The first sale you'll make this year is when you sell your comp plan to your sales reps. Designing plans is an involved process, and even if you ace it and create the best compensation plan possible, you can run into push back from the sales team if it's not communicated effectively.

In our webinar, “Selling Your Comp Plan to Your Sales Team,” we discussed the best practices for compensation plan roll out and communication that will guarantee improved buy-in and, in turn, drive better results. Compensation expert and VP Strategic Marketing at Xactly, Erik Charles, shared how you can get the most value from your new plans.

Typical Problems with Sales Plan Launches

What are some problems with the typical plan launch? If you’re like most companies, you don’t have just one office, you have many offices that are all across the country or globe. That means that each of these branches is going to get a different sales plan kick-off, and different explanations of the plans.

The way in which information is shared won’t be standardized. This will leave some team members in the know, and some lacking an understanding of what the plan changes mean for them. In addition, there’s often so much to be shared that you are fire-hosing reps with more information than they could ever possibly remember.

During the webinar, Charles reminded the audience that attention drops off after around 18 minutes into a presentation, and that of all this information you’re getting across only 21% will be remembered a month from now. To combat this known challenge, think about breaking down the explanation of the plan into more bite-sized presentations. If you extend the timeframe to include three shorter sessions rather than one long one you have a higher likelihood of keeping those reps in the back of the room awake.

Finally, it’s necessary to follow up on the initial presentation of the plan to ensure that reps know what is expected of them, and you can answer any questions the team might have so that your reps can get right to selling.

How to Launch a New Comp Plan Like a Product

The world is changing, and the status quo is no longer acceptable. Once upon a time it was okay to hand your reps a large manila envelope with a thick stack of papers detailing their new plans and then call it a day. Simply put, that no longer flies. Don’t invite reps to ignore your plan.

Instead, launch your comp plan like it’s a new product. No one leaves a new product in the corner, and they should certainly give new comp plans the same attention. So how do you treat a plan launch like a product launch? First, launch as a team; this isn’t a job for one person, it’s a job for every stakeholder involved in compensation plans. Secondly, ensure that you’ve nailed the messaging and value statement.

Standing in front of a room full of reps without being able to properly articulate why the plan has changed, and why it’s beneficial to both them and the company is going to leave you in an uncomfortable position. Next, ensure that there is a launch event set, without this you run the risk of a very anti-climactic and forgotten sales plan rollout.

Finally, check progress, and then check it again. Frequent plan health checks ensure that the plan you thought was perfect on paper is living up to your hopes for it.

Test the Message (Plan) with Key Stakeholders

Want to know a compensation planning trick of the trade? When you add a “troublemaker” to your team of plan reviewers, it increases your likelihood of rolling out a successful plan. Your troublemaker is a successful rep, maybe someone on the verge of a promotion to management who always finds the flaws or game-able aspects of your plans.

This person is invaluable in helping you spot flaws and game-able metrics within your plan. Testing the message is important. Before a full rollout get sales managers feedback and buy- in as well!

How to Get Your Sales Reps Onboard

Here’s a quick quiz for you. What’s the first question your reps are thinking (or asking!) when you share the new plan? If you said ‘What’s it worth to me’? Then you answered correctly. It’s your job to make it very easy for them to see exactly what is in it for them. You can do this with SNOT.

Before you tell me I’m gross, let me give you a refresher course on a phrase you may have heard in your English class years ago. This phrase means show not tell, and this advice works just as well when sharing a new comp plan as it does when you’re writing a creative essay. Show, not tell, your reps how they will be supported in the coming year.

That means being able to answer rep questions like: How many of our clients are in my patch? Which ones are reference-able? How has my territory performed in the past? What are the top companies already identified in my territory? And, are there any marketing activities to help me build pipeline? 

Use a Team Approach

Your sale team should not be in it alone. Rolling out a new comp plan is a great time to remind them of all the tools they have in their arsenal, such as:

  • Thought leadership
  • Competitive Intelligence
  • Sales Engineering
  • Account Management
  • Product Materials

Frequently Asked Questions

Q: When planning territories and quota is it best to plan top down or bottom up?
A: You want a balance of both. It won't work if only managers make the plans, and it won't work if executives work in a silo. Meet in the middle.

Q: What is the optimal time to kick-off the new plan with the sales team?
A: Your plans should be out ASAP in Q1.

Q: How is it best to distribute new plans?
A: Electronic is best. Digital signatures with DocuSign make it quick and easy.

Q: What happens if you're not ready to roll out your plan in Q1?
A: Roll out a quarterly comp plan + access the following quarter.

We hope you enjoyed this post, for more information on how Xactly can help you with the plan design process learn more about sales compensation consulting with Xactly Strategic Services.

  • Incentive Compensation
  • Sales Coaching and Motivation
Jordan Scott
Jordan Scott
Manager, Content Marketing

Jordan Scott is the Manager of Content Marketing at Xactly. She attended The University of California at Santa Cruz, and received degrees in Literature and Education.