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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 …
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 reward salespeople for strategic sales activities?
If the comp plan focuses exclusively on immediate results, making progress for the long run may not seem very important to the salespeople. To focus sales activity on strategic effort…
Sales Manager Comp – Sales Rollup or Management Plan
After the incentive plans for sales representatives are completed and modeled, the next step in a plan design project is to develop plans for the front-line Sales Managers. Companies generally take one of three approaches based on their pay philosophy.
What are best practices regarding quota setting?
To be fair, this is a topic worthy of a book rather than a blog post, but we cover a few of the key concepts here.