I'm often asked if sales comp planning occurs only once a year, in advance of a new year. Sales comp planning is really a ‘process' and not an event. You may do the bulk of your planning in a given period of time, circumstances frequently change that require a review of the comp plan. Here are six (6) factors that may cause you to review or adjust your sales comp plans or structure:

1. You need to create new territories due to an increase in sales or as a result of new hires. Dividing territories usually calls for adjustments in quota allotment and hence adjustments in compensation

2. You add a new sales role - i.e. a telesales, and you need to not only build a comp plan for the new sales role, but need to add the cost of this new plan to your Cost of Sales and revisit your cost model to ensure the plan is still in-line with financial budgets

3. You introduce new products which weren't included in the original comp plans. You may need to provide a completely new incentive component, or promote a certain mix of old vs. new products

4. None of Your sales team is achieving their goals. You may have set goals or quotas at a level that no one can attain. To keep your team motivated and driving forward, you may need to adjust quota levels for your team to achieve success. A best practice would be to structure team goals so that approximately 60% of your team is at or above plan.

5. Your plan is not motivating the right behavior. Your sales team is making money because they have figured out how to ‘work the comp plan' but their achievements are not aligned with company goals. You need to ensure that your entire team's incentive structure is aligned with the company achieving its goals.

6. Your Cost of Sale is too high. You may have designed a great comp plan in terms of motivating your team, but the Cost of Sale ends up making the plans not affordable to continue paying the current incentive rates.

Makana Motivator allows you to manage the dynamic nature of sales compensation changes. You can quickly and easily perform what-if scenarios with inputs such as quota levels, commission rates, staffing levels and territory assignments and graphically view how these changes will impact your sales comp efforts. The modeling capability allows you to verify that the plans you developed fit within an acceptable Cost of Sale budget. Once you have designed and modeled your idea comp plan, Makana Motivator automatically generates a comp plan document using your design inputs.

Larry D'Angelo