The Sales Exec’s First-Quarter Incentive Compensation Checklist
Business experts and analysts love to compare fiscal quarters to those of a football game. So there is plenty of advice out there on how you can “save the game” in the fourth quarter with last-minute sales strategies. Why wait until the last minute? Business isn’t really like football; there’s no steady linear march up the field. Rather, business shifts and changes so quickly that by the time you get to the fourth quarter, it’s difficult to make up for lost ground.
To start winning from the beginning, perform a check-in on your incentive compensation plan at the end of first quarter:
- Compare sales goals to sales performance;
- Determine factors contributing to being above, on, below, or seriously below target; and
- Gather information needed to make strategic sales decisions and adjustments.
To determine how well your compensation plan is working, ask yourself these six questions. The answers should be easy to gain from the data in your incentive compensation management software.
- How do your first-quarter sales stack up to your first-quarter goals? How does what you planned on doing compare to what you actually accomplished? Where can you do better next quarter? Use this information to adjust your incentive compensation strategy, so you start winning now.
- How do your salespeople rank? Reps who perform poorly rarely become top performers, yet they often require lots of time and money. Look at your data to get a comprehensive picture of how your team is performing. Consider letting go of those who are dragging your numbers down. Provide coaching or mentoring to middle performers, and improve your sales incentives to motivate top performers even more.
- How do each salesperson’s results compare to previous quarters or years? Does your data show that your top reps aren’t performing as well as before? It may be time to redesign your incentive compensation strategy.
- How does performance vary by region? Assess the sales potential of territories and customers, the quality of your customer service, and if territories are properly balanced to provide equal incentives to all. All of this information is the key to optimizing your territories.
- How does performance vary by your product or service? Know what’s hot and what’s not, so you can sell more of what your customers want, and less of what they don’t. Then, tweak your incentive compensation plans to motivate your team to sell your highest-margin products that are most in demand.
- How does performance vary by your team leaders or divisions? If a team or division isn’t performing as well as others, you may have leadership issues to address. Compare performance of teams and divisions to others, as well as to performance in previous years, to find red flags. What can you learn from the other better performing divisions?
An end of first quarter check-in provides the visibility you need to assess your sales strategy and start winning now.