Sales Compensation Blog

It is critical that you align sales plans with corporate strategy.  That's easier said than done, but following these four steps will get you thinking in the right direction.

First, the organization needs to agree on the corporate strategy that will be delivered though sales.  Is the goal to increase revenue, further penetrate the market, increase profitability, improve retention, sell long term contracts?

Some of these goals are mutually exclusive and, unfortunately, you can't have it all.  You need to ensure that the strategy doesn't compete with itself. Also, look at the number of goals.  If you try to focus on too many of them, they get diluted and the company will not achieve any of its objectives.

Next, see if the corporate strategy differs from last year's.  If the strategy will remain unchanged, did the sales plan deliver the desired results in the previous year?  If it didn't, search for the disconnect and adjust your sales plan.  Analyzing your team's performance distribution may point to the source of your problem.  ( See our post on "Building A Performance Distribution Curve On Your Sales Team". )

Once the corporate and sales strategies are defined, determine how the various job roles support the strategy.  Defining job roles goes beyond a focus on revenue numbers.  A change in strategy may lead to adding job roles to focus on developing channel partner relationships or separating new sales from renewal sales.

Lastly, look at measures within the roles. Measures are things a rep carries a quota or goal for. It is imperative that these measures align to the sales strategy.  With its visual approach, Makana's alignment view helps the plan designer ensure that the measurements support the corporate strategy and that the plans are aligned along job roles.

I just spoke to a manager responsible for sales comp who told me his sales plans were not done and that he would not get back to them for at least 6 more weeks.

It's March 16th, for 75% of US companies that means it is now 2 weeks from the end of the 1st quarter. Its way past 10pm, where is your sales comp plan? If you have not rolled out your plans, how do your sales reps know what their goals are, have you been able to motivate your team with no plans? As a manager you are probably frustrated that you can't motivate your team to do what you need them to do in this recession, "sell, sell, sell!" As a sales person, you are probably begging for a comp plan to better understand what you will and can make during the year. It's an all around de-motivating situation.

As a former sales person with commission rates that would change quarterly, I remember the two weeks at the beginning of the quarter, waiting for my incentive program, to feel really motivated to get out there and sell the way the company needed. But if I didn't see the numbers and understand what I was going to make, it sure didn't move me to make more calls or try to get PO's in early in the quarter.

People talk about organizational theory and the psychology of motivation. It's not a science; good sales people are hungry for money. Show them how to make it, with a clear comp plan and they will work to get to their numbers and accelerators. So many organizations are damaging their teams' motivation and morale just because they can't put a number in front of their team and say "GO!"

I understand this year presents some new challenges... but the economy makes it doubly important to roll these out...

So, I am saying it "GO!" for the sake of reviving the economy in this recession, build your plans for your teams TODAY!!! If you need help, call/email/tweet/message me, I will help you get it figured out!

For those of you on a calendar year that don't have your sales plans finished, help me better understand what's holding you up? What is taking priority?