The Question of the Hour: Are Your Compensation Plans Competitive?
Data is the Key You’ve Been Waiting for to Unlock Compensation Best Practices
This blog post is part of a five-part series that will answer critical business questions that are top of mind for all Sales leaders. This article, the second in the series, will examine how you can figure out if your compensation plans are competitive enough to keep your high-performing sales people. The last post explained how you can discover if you’ve hired top talent, and what you can do to keep those ‘A’ players.
Sales is a numbers game- you can look at it from any angle you want, but no matter how much a rep loves their company and the product they are selling, at the end of the day they still want to be working for the organization that is giving them the best compensation for their hard work. This means that in order for you, the sales leader, to retain the people on your team that hit their numbers again and again you must be able to answer, without a doubt in your mind, ‘yes’ to the question is my compensation competitive?
Just last week I talked to one of my friends who works in sales at a well-known start-up in the Silicon Valley. She’d hit or exceeded her numbers quarter after quarter and management still refused to raise her base or variable pay, so she began to look for other options. She quickly found a company that was willing to pay her around 12% more than her current organization. This first company lost a top performer whose raise likely would have paid for itself many times over with the revenue she brought in. Unfortunately, the company wasn’t familiar enough with what its peers in the industry were willing to pay and they lost top talent.
The last thing you want is to come in on a Monday morning at the end of the quarter to discover that one of your leading reps is moving on to greener pastures. One effective way you can combat this happening is by using empirical data that gives you a comprehensive picture of what other companies in your space are paying reps with the same amount of experience, productivity, etc. as your own. For example, our data has shown that Medical Device companies most frequently have three components in its pay mix, with one main component making up 85% of variable pay.
Xactly Insights™ uses ten years of empirical sales data that can help you ensure that your sales incentive compensation plans are competitive for both your industry and your peer group. You’ll finally be able to answer all the questions you’ve had around payment such as: What is the average spend per employee, what is the average quota attainment for my peer group, and are my primary, secondary, and tertiary components of my pay mix ideal and competitive? This data is not reported, it is actual compensation data that we have gathered from companies just like yours over the last decade.
If you’ve been questioning if your company is following best practices when it comes to how to compensate your sales reps, Xactly Insights has the answers you’ve been looking for. With our technology, your team will be equipped with the solution and data you need to clearly compare your incentives to your peers so that you can stay ahead of the competition.