Sales compensation orchestration: Timing is everything. But if the compensation rhythm is too complex for a sales organisation to effectively grasp and play, sooner or later, sales compensation becomes pretty out of tune. Complex incentive plans can hinder the very actions organisations want from their sales force if the plans are not properly designed to deliver the desired profitability.
The Symphony of Clarity:
The simplest outcome is where everyone in that orchestra has a clear idea of what behaviours make for good music and they all start playing together. When it works, everything flows. This was the achievement in a technology-focused company we worked with, whose sales incentive plan ownership drove a misunderstanding of what was really needed, which was simplicity. They didn’t see this as a structural problem in its own right, just another factor to be taken into consideration alongside other competing interests. So this company decided to commission a ‘master plan’, which stripped away all the complexity, resulting in an easy-to-administer standard-cushion-on-top commission structure. Sales personnel no longer had to spend time worrying about how base salary and incentives interacted, allowing them all to get out there and sell to clients.
Aligning Incentives with the Crescendo of Profitability:
So in our orchestra the conductor is directing the playing of musical instruments through crescendos and decrescendos. Likewise, the behaviours of sales organisations must be directed through to the sales crescendo – profitability. In one retail environment, a directive led to upselling higher-margin products. This generated a beautifully fortunate harmony where the individual commissions and company profits rose in tandem.
Harmony in Communication:
For an orchestra, it’s the conductor’s job to communicate clearly. And in a sales organisation, frequent and open communication is a fundamental component of an effective incentive plan. An insurance company, for instance, regularly held symposiums to explain the change in commissions and its rationale to its sales force. The result was a fully energised and informed pool of sales staff, ready to take the company forward, and marching in unison to the beat of the new strategic drum.
Technological Crescendo:
In the digital age, the conductor’s baton is technology. Technology can empower the orchestra to play a simple symphony. A software company on innovation introduced a dashboard, where the beginning of commissions was recorded in real time on an online page. The salesperson could go there and see what the person had received, enabling their own performance.
Flexibility: A Personalized Sonata:
Just as no great symphony is the product of a single note, no brilliant success in sales is the creation of a single incentive plan. A flex pay plan is an elegantly tailored sonata found amid the grander symphony of sales success. Consider the tiered bonus plan offered by a technology firm that encouraged their sales reps to become their own arrangers, pulling back the bow on commission structures or base pay – whichever best suited their personal motivations – and creating their own musical score.
By the end of our symphony, it should be clear that the paradox of sales compensation success lies in the pursuit of simplicity in strategy. Those companies that gain the desired balance – a symphony of clarity, of need-driven alignment, of transparent structural communication, of technological innovation, of intuitive next-level flexibility of design – will be able to make the climax of their symphony come to life, where sales behaviour is optimised, profitability follows, and every entity in the orchestra hums in a full climatic melody.
