Sales compensation is often treated like an operating expense. It’s line-itemed on the income statement, budgeted for annually, and managed by finance. Finance typically reviews sales compensation plans for payout accuracy and cost control. But while managing incentive spending is important, there’s a much bigger opportunity at hand. Sales compensation should be viewed and managed
Every sales compensation plan is built around a singular purpose: to drive specific business outcomes. Your incentive plan makes assumptions about the market opportunity, customers, products, competition, sales capacity, revenue priorities and more. The problem is that businesses don’t stand still. Products are introduced. Competitors react. Customers change their buying criteria. Economic conditions shift. Businesses
We’ve all heard the promises when buying into a new compensation planning solution. Build better commission plans, model payouts more accurately, or automate plan administration and your incentive plans will be successful. But if you’ve been around sales compensation for any length of time, you know there is more to it than just better technology
Companies spend months crafting sales compensation plans. Finance models payout expense, Revenue Operations designs plan mechanics, Sales Compensation defines measures and rules, and executive leaders provide final approval ensuring plans reinforce business priorities. But after all that effort one stakeholder is commonly neglected frontline sales managers. Sales plans define what sellers are incentivized to sell,
