As the sales landscape continues to shift at breakneck speed through 2024, organisations are changing their sales variable compensation structures to help them maintain sales force mindshare, while moving the needle in revenue projections. The single or three-pronged, quota-only-attached sales compensation schemes of yesteryear no longer provide sufficient impetus to drive the level of sales force excellence required to remain competitive. In response, organisations are exploring management best practices in sales compensation plan to help teams perform at peak levels.
1. Personalized Compensation Plans
One such trend is personalisation of compensation plans. As the multi-speed organisation continues to gain recognition for its ability to deliver economic value to the business through customised product and service offers, the idea of having one compensation plan fits all becomes outdated. Personalised plans can help to offset each sales rep’s unique motivations. For example, a company could offer extra commissions for senior sales reps who are assigned to strategic accounts, while having accelerated bonuses for junior reps to enable them to get on board quickly and perform to the high expectations of the role.
2. Team-Based Incentives
A third emerging trend is team incentives. As sales cycles become longer and more collaborative, companies are rewarding teams rather than individuals. This drives collaboration and ensures that team members put the goals of the team ahead of individual interests. For example, a company may elicit better team collaboration and alignment of individual effort with company objectives by introducing a quarterly team bonus (paid out if the team as a whole meets or exceeds their collective objectives for that quarter).
3. Non-Monetary Rewards and Recognition
Second, non-monetary rewards and recognition are playing a larger role in producing a salesperson’s total compensation and engaging the workforce. A sales call well handled is its own reward, but a well-timed ‘job well done’ — whether verbal or demonstrated through a career-enhancing opportunity, promotion or lateral move — can be effective reinforcement of desired levels of sales force performance. Sales reps who reach targets on a consistent basis can be given opportunities for professional development, such as award vacations or invitations to attend executive-level industry conferences or executive events to enhance their effectiveness.
By embracing these new trends, you can create a more engaged, energised and productive sales organisation, which will enable you to become a share-gaining champion in your given market.
