Author: Bailey McCaffrey
The best sales compensation plans are more than just money or a way to pay your sales reps. Sales compensation is a powerful lever to help companies align corporate goals with customer experience (CX) and sales strategy and ultimately selling behaviors. It’s essential to know if your plans are meeting these beneficial objectives. Not sure how to create a sales compensation plan? Canidium has provided a step-by-step on how to do so.
When used correctly, the right plan design will help you effectively analyze, recognize and reward high performers within your organization. Compensation plans that focus on these desired outcomes will aid your operations by creating a deeper understanding of both buyer and consumer behaviors, ultimately leading to increased sales in 2020!
Make sure your sales compensation plan is hitting the mark on all 4 of these desired outcomes:
1. Alligns CX and sales strategy to corporate goals
To begin, aligning corporate goals with sales strategy is no small task for Sales Leadership and Sales Operations. After an overall corporate strategy has been defined and goals identified, the sales team will need to distill these high-level objectives into a more granular account and geographic coverage strategy supported by specific targets (or quotas). On top of this, leadership and operations will be responsible for effectively encouraging the sellers to hit personal goals but also perhaps team-based expectations. And as you know, this process is not a one-time event but continues to evolve over and over throughout the year.
Aligning expectations and communicating them to the sales teams while the goals are continuously modified is only possible with strong sales performance management solution coupled with a clear sales strategy.
2. Drives the correct behaviors throughout the customer lifecycle
A sales compensation plan can only hit its potential by encouraging reps to sell whatever is best for your organization. For example, paying higher compensation on products or services with a higher profit margin means you will sell more of what matters. Furthermore, CX is about a clients’ interaction with the company from the start of their journey to the end. Commissions allow you to better manage rep to customer interactions by incentivizing positive behaviors. By driving positive interactions between your company and your consumers, you can benefit from a better CX, more closed deals, a higher customer satisfaction rating, and a larger profit margin.
3. Connects pay to performance and rewards high achievers
Not all sales reps are the same, nor is their performance. But all reps should be compensated fairly for the work they bring forth for the company and your team. The right compensation plan should enable you to reward these high achievers with the compensation result that works best for them.
Furthermore, it is hard to differentiate high performers and low performers from the crowd without compensation analytics. Making sure your best reps are getting the recognition they deserve is essential, as is helping struggling employees get the guidance that will help put them back on track to meeting their goals.
4. Serves as both a recruitment and retention lever by offering clear market differentiation in a cost-effective manner
Compensation is a cost-effective way to recruit and retain talented reps. Your company will attract hard-working employees who are willing to go out and earn their wages while keeping the highest performing reps long-term. The more your reps sell, the more money your company will gain, the more they will have to spend on their commission, it’s that simple.
A good sales compensation plan is the cornerstone of a thriving sales team. In order to get the desired results out of your team, you must put in the time and effort into your employee compensation. Not sure how to make refine your compensation plan to help you achieve one of these desired outcomes? Talk to one of our specialists by clicking the button below!
Find the author on LinkedIn: Bailey McCaffrey, Marketing Coordinator, Canidium