Hey Sales Managers! Do you have the Right sales plan? Are you rewarding the right behavior?

We get asked a lot about sales compensation and commissions. Everyone wants to know “what is the best structure for a successful Sales Force?”. Companies fall across the board on what and how they commission their sales people. Of course, there is the obvious strategy of incenting the results and behaviors you need to be successful. This seems simple enough, but how does it actually work? Often, in consulting with companies we have found sales comp plans that are not actually aligned to the results that the company needs. Companies often incent good things but not always the right things. Perhaps the plan did initially, but then things get complicated. We sales people are canny and will find the loop holes for how to best work the system to get paid the most from any comp plan. This may not always work to the company’s best interest. Another base rule of sales comp is simplicity; Sales people need to clearly see how each activity affects their bottom line. Keep it simple so everyone can immediately see how they benefit from their results. The third area is to make results very visible. A great way to do this is with a sales dashboard that the Sales reps can access daily. Transparency is key to helping incent the results you are looking for!

The topic of spiffs always comes up and a good guideline here we found was to use spiffs to reinforce the behaviors that lead to sale success; to focus on an area for a time period. Examples we have seen are call volume, appointments booked, proposals written, close percent etc. Watch that spiffs do not comp on what your comp plan already incents sales reps for.

Perhaps it’s time you took an assessment to see if your plan is incenting your Sales Force to succeed. Are you aligning compensation with results you need? Is the system easy to figure out? Does the sales team have good visibility into their results?