Seven Actions for Sales Comp Success
Your sales comp plan rollout is just the beginning. Follow these 7 post-launch actions for ongoing effective plan management.
If you are on a calendar fiscal year, you have just rolled out your new sales compensation plan. So what’s next? Quite a bit! Effectively managing a dynamic sales compensation program involves much more than the annual design process and ongoing administration. There are seven best-in-class actions sales compensation leaders can perform post-launch to ensure ongoing success.
- Provide Ongoing Communication. Having the best designed plan isn’t enough. To ensure the plans are driving your strategy, you need to communicated them effectively. Hopefully you already built a detailed rollout work plan that cascades the communications throughout the organization, built all the communication collateral (training decks, plan documents, brochures, calculator tools and FAQs) and successfully rolled out the new plan. However, plan communication should not stop after the initial rollout—collect feedback, clarify points of confusion, recommunicate the plan after first payment (to reinforce how the plan works), and conduct a mid-year survey. Capturing feedback does not mean you have to change the plan; it may mean that you need to do a better job of communicating the plan’s rationale.
- Refresh Sales Compensation Reporting. Once you have implemented the plan, it is time to review your reports. Best-in-class companies have multiple reports for different constituents. Incumbent Reports help sellers understand their calculations and how they are doing. Manager Reports share how their team is doing across multiple dimensions. Leadership Dashboards include overall performance, pay and COS data. Administration Reports provide access to all the incumbent, manager and leadership metrics as well as operational metrics (e.g., assignment/acceptance timing, # of claims, # of changes and error rates).
- Conduct a Post Mortem. Now that your annual design process is complete, it is important to review how well the process worked or didn’t work while it is still fresh in your mind and your team’s mind. Do any of the following issues sound familiar?
a. Unable to efficiently drive decisions because too many designers and/or no clear decision-maker.
b. Did not include key stakeholders, causing last minute changes or plan ownership avoidance.
c. Stakeholders not versed in plan design best practices and recommend bad designs.
d. Unclear/late job designs led to late plan design, or on time but misaligned plans.
e. Designs based on ‘gut’ feel as opposed to solid data due to insufficient plan analytics.
- Update Foundational Practices: After you have done your post mortem, use that information to update foundational practices that are necessary to manage your annual design process each year. Foundational practices include your governance model; end-to-end sales compensation process (plan, assess, design, communicate, implement, administer and manage); pre-defined set of job roles (AKA platform jobs); sales compensation component guidelines; and assessment/analytic/cost modeling tools. Some companies will also focus on special initiatives that are not tied to your fiscal year launch or need additional time to implement, such as pay levels, pay curves, crediting rule changes, policies and SPIFs.
- Address Mid-Year Plan Changes: Sometimes, it is necessary to modify a plan or create new plans for new jobs mid-year due to unforeseen changes in go-to-customer models or, unfortunately, major plan design mishaps. Companies should convene a steering committee year round to deal with these changes and other escalations, like dispute resolution, credit/split adjustments and windfall assessments. To streamline the process, schedule a monthly cadence and provide a ‘Sales Compensation Issue Request Form’ for constituents to submit their requests.
- Educate Stakeholders. Educating yourself and your stakeholders is essential to keeping your organization’s knowledge up to date. Whether it’s relevant books and articles, workshops and seminars, or external benchmarks, these insights will enhance your team’s performance.
- Upgrade System and Tools: Sales compensation administration (sales performance management) tools improve calculation timeliness and accuracy as well as communication and reporting. These tools are dependent on many up-stream data sources such as ERP/order systems, CRM, territory design, quota setting, and crediting. It is a good practice to revisit your systems and tools after the launch when you have the time and resources to dedicate to them.
Sales compensation program management is much more than just the annual plan design. Make sure you have your end-to-end program in place to manage your program throughout the year. Contact us today for more information on how the Alexander Group can help you maximize your sales compensation’s potential.