Design a Great Sales Compensation Plan
The team at B Inspired Finance Group have created thousands of successful Sales Compensation Plans. It’s not glamorous work but it also may be the single most important element for proper execution of your Sales Strategy. We have repeatedly seen the positive impact of having the right comp plan in place for each specific sales role in an organization.
Defining your strategy at the corporate level is rarely missed. Countless hours are spent defining your product strategy, including detailed plans for marketing, product, distribution, sales, and operations. You take this strategy and figure out how to go to market, analyzing your competitive advantages and driving go-to-market customer acquisition strategies. But what good is a strategy without a plan for proper execution? What happens when you forget the critical step of tying all components of this GTM strategy to your Sales Comp Plans to align your sales organization properly?
Tie your Strategy to your Comp plans
Here are some examples of sales teams with the wrong comp plan design:
- Comp plan rewards on-premises sales when Cloud is your key growth strategy
- You pay your AMs equally all product sales, when your company’s future needs to pivot on a new technology to ensure its future competitive position
- Sales Specialists selling products outside of their specialty area in order to make the number they’ve received quota on
- Enterprise AMs leaving the company as accounts are being cannibalized by the Mid-Market teams
Sales Comp Plans Drive Sales Behaviour
Are you motivating your team with the right Comp plan design? Have you incorporated all of the following into their Comp plans?
- Regional Strategy- Proper account assignments by Region
- Segment Strategy- Proper alignment to Enterprise, Commercial or Small/Medium Business
- Product Strategy- Cloud vs On-Prem, Core vs Growth Products, Specialists vs Generalists
- Service Strategy – Services led sales, Maintenance vs Advanced Services, Renewal vs New
- GTM Strategy- Distribution vs Direct, Marketing Support requirements, Sales Operations
- Paying on % quota vs Paying a % Revenue
- Base Salary vs Variable Components- Having the right mix is critical for growth and retaining motivated employees
You may not like the stigma of Sales Teams being coin operated, but it can’t be denied that Sales Comp plans drive behaviour. Make sure you’ve done your research creating the proper link between this behaviour to your company’s goals as it is essential to optimize your success.
B Inspired Finance Group Inc.