Steps to Successfully Launch Your New Media Sales Comp Plan
Three Tips to Ensure Success
In response to advertisers’ shifting marketing objectives amidst economic uncertainty, media companies are spending countless hours in cross-functional design meetings to structure and tune the ideal sales compensation program to drive success now. Leaders in finance, HR, marketing and even within the sales department often have various views about the right approach. What is best for the employee? What will ensure we win more new business? What is right for the company?
The error is trying to accommodate all these diverse views into a singular sales compensation plan. The right approach, proven through nearly four decades of enagements, is to begin with an education session, which will help align their thinking around a core set of market principles.
By adhering to a set of pre-established guiding principles, media companies can successfully balance the needs of every cross-functional stakeholder and are able to explain the why and why not behind the plan designs. To ensure success, it is critical that sales compensation plans are designed to:
- Grow revenue profitably
- Align measures and metrics to the unique responsibilities of each role
- Set stretch, but make goals achievable
- Ensure each plan is simple to understand
- Certify that the plan can be administered timely and consistently
With a new generation of sales compensation plans established, companies must now ask, “How do we successfully communicate and launch the new plans?” Here are three tips:
- Communicate strategy, not just mechanics
- Ensure communication is evergreen
- Demonstrate success
Communicate Strategy, Not Just Mechanics
When rolling out a new plan, do not just talk about the mechanics; ensure that each message to the team ties back to the commercial strategy. Doing this not only provides context of why the company is making changes but also relieves some of the consternation that naturally arises whenever sales compensation plans are altered.
Go-to-market strategies will often change year to year; thus, sales compensation plans need to change as well to ensure alignment. For a variety of reasons, some media companies think they cannot change their sales incentive plans. Common push back revolves around rep disruption. However, the very nature of sales is built on a foundation of resiliency. But, in reality, more than 90% of all companies adjust their sales compensation plans on an annual basis.
Ensure Communication is Evergreen
Rather than treating communication as an event with a start and stop, consider it as an ongoing process where the messaging evolves, and key points are reinforced continuously. After launching plans, take the time to check in with the sales team to ensure the program is driving the desired results and that there is alignment on expected behaviors.
A typical communication sequence can look like the following:
- Executive: Delivers the first notice that change is coming. Shares insights into company strategy.
- Sales Leadership: Shares any changes to the go-to-customer strategy and model (e.g., new pre- and post-roles, specialists and rules of engagements). Communicates highlights of the new plan(s) to the sales team and shares the principles which guided the design.
- Train the Trainer: Provides sales management with detailed training on how the plan will work, examples of how to win with the new plan and instructions on their part in the roll-out process.
- Team Discussions: Enables each manager to speak with his or her team separately to discuss how the new plan(s) aligns to their respective goals, role and responsibilities.
- Manager and Rep One-on-Ones: Allows personalized discussions between each manager and their reps regarding plan details and how they can personally maximize earnings.
- Follow-Ups: Collects feedback after launch. Deploys surveys, conducts interviews and documents feedback to ensure there is accurate and complete understanding of the new program and the strategy behind it.
While a well-designed sales compensation program should function with few issues, they can often be inevitable. Constant communication and proper program management should include complying with policies and abiding by the procedures outlined in the plan document. Communicating plan features to new (and existing) sales personnel plus managers is an ongoing responsibility.
When it comes to communicating how to maximize earnings under a new sales compensation program, do not leave it up to the imagination. By creating estimating tools and examples of what good, better and best looks like, each sales rep can be seen in real-time how they can maximize their success.
Each unique sales role also deserves its own tailored sales compensation plan. Often, stakeholders will wonder why the sales department has so many different incentive plans. A recent quote from a company with 200 different incentive plans: “45% of our incentive plans have one incumbent.” (Well, that is a warranted frustration.) However, not every job title should have a unique plan. Group titles into like-platform jobs and establish one plan per platform job. Design comp plans for roles not individuals.
There are a lot of things to consider when thinking through how to launch a new sales compensation program. Market changes and the continual need to attract and retain top talent are forcing companies to re-evaluate their sales compensation plans on an ongoing basis. Alexander Group’s research shows that 43% of companies are overhauling their sales compensation plans, with 85% making changes to their sales comp governance model.
Don’t leave communication up to chance. In the dynamic media landscape, constant change is the norm, therefore strategies and sales comp plans cannot remain static. By following these tips, media firms can ensure that the effort spent on designing new plans successfully translates into understanding, buy-in, achieving strategic goals and, ultimately, sales success.
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To ensure your sales compensation program is aligned with company goals, schedule a complimentary 30-minute sales comp program readiness evaluation with a media practice sales compensation leader.