Sales Compensation Blog

So many companies wait until the last moment to review their plans and modify them that there always seem to be an inevitable craze to model and document the changes. The evidence is everywhere:

• Overnight sessions before the kickoff meeting putting the final "tweaks" into the plan documents
• Incentive programs that drive unintended behavior
• Plans for different job functions that look like they come from different companies
• Dense documents that are hard to read and full of ambiguities.
• And the list goes on...

So, I say, get started now.

Now you might say - "we haven't finished our strategic planning so what can I do?" Turns out there is some excellent analysis you can do now that could not only inform your comp plan design process, but also be of great help with the strategic plan. Here are 5 things you can do now to help:

1. Assemble ALL of the existing sales plan documents and create a master view that allows you to compare the most significant components side-by-side. You want to understand the earning potential of each role, the key measures and goals and the value to the individual for achieving them. (Check out our alignment view for an example.)
2. Review your customer segmentation. Check to see if your territories are adequately assigned and your team has the best skills to address your most important segments.
3. Assess how your reps spend their time. Understand what percent of their time is spent finding new business, working with existing customers, or doing internal administration. Consider adding job roles if you identify inefficiencies.
4. Look at the quota attainment distribution of your direct sales reps. Create a graph that shows the percent of reps at each level of attainment. See who are well above quota, at quota, and below. You should have a nice bell curve. If you have a U shaped curve....you will need more time planning! Your territories and quotas may be seriously out of balance.
5. Understand what you are paying in incentive compensation by order. All too often this information is so buried in spreadsheets that you don't really know the cost and can be overpaying when multiple roles are involved.