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How can I maximize the impact of the communication of the new sales compensation plan?
One rule of thumb for plan communication is to double the amount of time you used for designing the plan to the plan implementation effort. Ideally the communication begins by letting the sales force know that the plan is being reviewed to align it with the company’s changing go-to-market strategy. Examples include: More emphasis on …
We’re launching a new product – what’s the right compensation arrangement for the first year?
While putting incentives in place to reward sales people for their important contribution to the successful launch of a new product is smart, there are a lot of ways to get it wrong.
How should we build a payout table for very small goals, or goals that could go negative?
If a small business had a business plan that included an operating loss of $200,000 for the year, putting together a payout table to reward for this “success” would not work if the mechanics were communicated as a percent of the goal…
Should sales representatives receive incentive compensation payments while on a leave of absence?
For incentive compensation payments during a leave of absence, think about when the work is done vs. when the payment is made.
What are the key components of a sales compensation plan document?
The sales compensation plan document serves as a standard reference for sales reps, sales managers, and those who calculate the incentive payouts. Typically, the plan document includes an overview of the plan structure often with a statement of the company’s pay philosophy, a detailed description of the plan’s components with brief payout examples, the terms …
When is the use of a threshold a good idea vs. paying on every sale?
For sales people tasked with growing an established business, a threshold can be the key to focusing them on growth.
Our CFO feels we should give out quotas that add to 20% more than our annual plan. Is that a good idea?
Distributing more quota then the annual operating plan is called over allocation. A little bit is okay and a lot is not.
When two or more people work a sale, how should credit be shared?
Especially for large or complex sales, it often takes more than one person from the sales team to close the deal. If the two people are…
When is a relative ranking plan a good idea?
Relative ranking plans work best for sales forces in which collaboration is not a key requirement for success…
How do we move our pay mix so that there’s more in the incentive and less in the base?
We need to offer a more meaningful incentive, but our base pay levels are too high. How do we make the transition?