Sales Compensation Blog

 When it comes time to design your sales compensation plans, don't go it alone.

Comp plans created solely by sales executives will emphasize incentives and motivation.  Plans designed by finance will be skewed toward ensuring affordability.

The best  sales compensation plans balance these and other corporate requirements. So when you are developing your comp plans, get input from multiple constituents to help you achieve the right balance.

One person needs to lead the sales compensation planning process.  The leader gathers information, opinions, and advice from other team members, and keeps the project on track and on schedule.  The team leader must also determine the approval process and make sure that "sign off" occurs at the appropriate stages of the project.

The sales compensation team should involve the following:

• The CEO: provides key guidance on the company's strategy
  
• Finance : delivers plan affordability guidelines and sales goals.
  
• HR : contributes job descriptions, base salary, TTC (total target compensation) and organizational structure.
  
• IT: delivers transactional data used by the compensation plan and information about the ability to implement the proposed changes to the plan.
  
• Marketing: presents upcoming campaign strategies that will influence quotas.
  
• Participants: advise on what worked and what didn't work in the current plans and, towards the end of the process, how they perceive the proposed changes to the plan working.
  
• Product Management: informs on road map for new releases and new products which can also influence quota.
  
• Sales Management: analyzes the attainment distribution of the current plans and explains why they may have fallen short or exceeded the goals.
  
• Sales Operations: provides their analysis of the current plans, as well as territory alignment.
  
• Legal: reviews plan to ensure that they are in compliance with current laws, regulations and internal policies.

Small companies will find one person on the team may fill multiple roles.

With your team in place, you'll ensure your sales compensation plan is within budget, is primed to motivate your sales team, aligns to strategic goals, and is well communicated across the organization.

From the start, Makana Solutions decided to focus our product strictly on the Small and Medium Business (SMB) market because we knew that there was a huge un-met need. We understand your business model, because we are your business model. We all live and breathe our product. And we understand the pressures other SMB's are under to perform in this tight market.

When it comes to Sales Compensation, SMB's are unique because often the business owners are the planners, payers and administrators. Owners who could be using their resources in other places get bogged down with administrative duties like comp planning and payment when they should be out uncovering new business, making sure their strategy is right and that all company activities drive towards that strategy. Secondly, SMB's are unique because they don't have enough time in the day to spend it pouring over spreadsheets or reviewing and editing commission payments that were miscalculated in Excel. SMB's are resource constrained. They don't have teams of people responsible for sales comp as they do in large enterprises.

Makana has a tremendous opportunity to serve this market and we are excited to do so. We are uniquely positioned through our self-service offerings to provide value unmatched by current tools. Everything we do in our company and with our product is to improve sales, profits, efficiencies, and cost reductions of the SMB market.

- Larry