The First 90 Days: How to Monitor, Measure, and Optimize an Incentive Plan After Launch

Most organizations spend months analyzing and re-designing their incentive plans. Finance teams spend weeks validating budgets, Sales leadership revises quotas, HR reviews governance, and RevOps works to deploy plans on time. What happens after launch? 

For too many organizations, the answer is nothing. Plan launch has always been seen as the finish line. But what if we told you launching a plan is only the beginning of the process?

The first 90 days after an incentive plan launch are actually the most important. Not only do sellers begin responding to the new plan during this time, but trends begin to emerge. Behavioral changes are identified, unintended consequences come to light, and plans are validated against strategic objectives.

Organizations that take the time to monitor and optimize their plans during the first 90 days can identify issues quickly and make changes to improve results. Organizations that do not wait until next year’s plan to correct mistakes.

If you want to build a world-class compensation program, it’s time to think beyond the planning cycle. Successful plans aren’t designed in Excel—they’re monitored, measured, and optimized on an ongoing basis.

Here’s everything you need to know about the first 90 days after plan launch.

1. Launch Is Not the Finish Line It’s the Start of Validation

Traditionally, sales compensation has treated plan launch as the finish line. Departments debate design specifics for months. Once a plan is approved and communicated to the field, many companies move onto the next big thing.

An incentive plan is nothing more than a behavioral system. You can design your plan in Excel until you’re blue in the face, but you’ll never know how it influences seller behavior until after launch.

Imagine your company launches a new plan designed to incentivize adoption of a strategic product. You build towering accelerators and ensure commission rates are highly competitive. Everything looks great on paper. 

Three months later, sellers have found a loophole. Because the strategic product is difficult to sell, reps can meet their goals by prioritizing other, easier products. As a result, sales of your strategic product are far below expectations.

It should be no surprise that leadership is unhappy.

This is why monitoring closely after plan launch is so important. Launch should not be viewed as the end of the sales compensation lifecycle—it should be viewed as the beginning of validation.

Your goal should not be to design the perfect plan. Your goal should be to build a plan that can be validated once live.

Are sellers responding to the plan the way you expected? Are incentives properly aligned with company strategy? The answers to these questions won’t be revealed until after launch. By focusing on the first 90 days, organizations can quickly identify problems with the plan and make adjustments.

2. The Four Signals Every Compensation Team Should Monitor

Understanding what to monitor after launch is the first step towards optimizing your plan. But what exactly should you look at? 

Successful post-launch monitoring encompasses more than just quota attainment. While keeping an eye on whether or not reps are hitting their numbers is important, there are several other signals compensation teams should monitor. Below are the four key categories. 

A. Behavioral Signals 

First and foremost, compensation teams should evaluate seller behavior.

Questions to consider include: 

a.Are sellers focusing on the right products and accounts?

b.Has deal timing shifted? 

c.Are discounting patterns increasing? 

d.Are you seeing shifts in pipeline behavior? 

Maybe your new accelerator is encouraging quarter-end deal pulling. While revenues may look strong in the current period, your pipeline could be drained for future periods.

Behavioral signals can provide early indicators of plan health. Many of the questions above can be answered by looking at selling activity in your CRM.

B. Financial Signals 

Incentive plans should also be monitored from a financial perspective. Key numbers to watch include: 

a.Cost of comp
b.Payout efficiency
c.Pay-4-performance alignment
d.Attainment distribution 

If your plan is driving desired performance but causing compensation costs to skyrocket, it may be time to make adjustments. Monitoring your plan from a financial perspective can help ensure payouts remain manageable.

C. Strategic Signals 

What about your company’s strategy? Are incentives pushing the right buttons? 

Questions to consider include: 

a.Are strategic products moving faster than older products?
b.Are margins holding up?
c.Are customers expanding business with your company?
d.Are you gaining share in new markets? 

For example, if your incentives were designed to improve profitability but your margins continue to erode, your plan could be pushing the wrong levers.

D. Seller Signals 

Last but not least, it’s important to monitor how sellers perceive the plan.

Questions to keep in mind include: 

a.Do sellers understand how they are being paid?
b.Is the plan perceived as fair?
c.Are sellers feeling motivated?
d.Are disputes on the rise?
e.What are sellers saying about the plan? 

If sellers don’t understand the plan, don’t feel like it’s fair, or lack motivation to sell, they won’t care how much money they can potentially make. Seller sentiment should be monitored closely. 

3. Why the First 90 Days Create the Biggest Optimization Opportunity

So why 90 days? Why not 60? Why not 120? 

The first quarter of data tells you the most about your plan. The following are three reasons why. 

a.Day 0 to 30: Plan Understanding and Initial Adoption 

Within the first month of launching your plan, you should be able to identify whether or not sellers are going to respond to the plan as expected. Do sellers understand how they will be paid?

Major adoption issues will be visible within the first month. If sellers don’t understand how they will be paid, they will usually let you know pretty quickly.

b.Day 30 to 60: Behavior Changes Begin to Surface 

By the end of month two, you should begin to see clear trends in seller behavior.

Are sellers changing their behavior to take advantage of new incentives? Are deals being pushed to hit quotas? Has pipeline distribution shifted? 

This is often the time when unintended consequences become apparent.

c. Day 60 to 90: Mid-term Business Impact 

After launching a plan, you never really know how it will impact the business right away. Will seller behavior change? How will motivation levels be affected? 

By 90 days, your organization should have enough data to understand how the plan is impacting the business. Strategic objectives can be reviewed, ROI can begin to be measured, and optimization opportunities become available.

Conclusion 

Sales incentives are powerful. When constructed correctly, they can alter seller behavior and positively impact your business. But if they are misunderstood or contain design flaws, they can cause more problems than they’re worth.

Monitoring and optimizing your plan during the first 90 days will allow you to quickly identify and correct any problems.

It’s time we abandoned the “design, deploy, and forget” mentality that has plagued sales compensation for decades. By thinking of the plan lifecycle as a continuous loop (design, validate, launch, monitor, optimize, repeat), organizations can create a flywheel of continuous improvement and consistently outperform their competition.