Most Recent Sales Comp Answers
Adjusting quotas mid-year. . . Should we? And if so, how?
The problem Sometimes our sales people lose business due to factors outside their control (e.g., customer bankruptcy, mergers, incompatibility of our offering with their requirements). Do we reduce quotas when this happens? Why do you have a sales incentive plan? The...
What your CEO needs to know about your sales comp plans
CEOs don't need to understand the details of the sales comp plans, but they do need to make sure that a few things are working correctly. Here's a check-list for what you should be able to demonstrate to your CEO in your next plan review/approval meeting: The plans...
Aggregate cost modeling is essential to ensure the plans create value for the business
The aggregate cost model projects the cost of the new compensation plans at different levels of business performance, and compares that cost to prior year costs. This simple example also includes some useful ratios of the cost of compensation as a percent...
Incumbent modeling checks the effects of the new plan on individuals
This is an example of an incumbent model for one role, sorted by historical Actual % Quota (4th column). For this client merging two legacy sales organizations and moving from a commission type incentive to a market-based incentive, it was important to understand how...
Should sales leader comp go up with quota size?
We have two sales VPs with remarkably different team revenue quotas. One at $12MM/yr, the other at $20MM. To date we have targeted the same variable comp for each…
If we have a reduction in force, do we pay terminated employees their variable pay?
It’s important to think carefully about the message you’re sending to your other sales people, other employees, investors, and prospective future sales people. A couple of case examples…
Should the sales force receive credit for online sales?
Whether or not a sales incentive plan should provide credit for online sales should be primarily linked to the nature of the sales role in question. Specifically, we should consider two criteria: Does the sales person meaningfully influence online sales results...
How do we ensure our sales comp plans help us retain top performers and help us weed out the under-performers?
Let the plans do what they do best and pull your solid folks along to higher levels of contribution, and use your performance management process to send a clear message to the underperformers.