Resetting Comp Plans? 6 Tips That Actually Work!
It’s mid-year and very few things look the same as they did at the beginning of the year.
Her comp plan also looks totally different.
When we surveyed sales leaders in April, 83% said that they would be resetting comp due to the current environment’s impact on business. But most didn’t know where to start, so we created this guide on how to reset comp plans to drive performance.
Here are six tips to help you adjust your sales compensation strategy, motivate your salespeople, increase their earnings, and drive company growth. And the best part is, this is all based on plans that actually work- companies with many of these elements in place, reported 30% higher performance!
Provide Real-Time Feedback
- Provide real-time commission tracking.
Don’t wait until the end of the month or quarter to give reps their statements. Faster feedback improves performance.
- Shorten to monthly quotas.
Even companies with six-figure average sales prices had higher performance scores with shorter quota periods.
- Don’t wait for cash collection.
If the rep isn’t responsible for following up with customers to collect the payment, don’t pay on cash collection. Pay on the activity that earned the commission.
Set Motivating Targets
- Have 3-4 accelerator tiers, with 2 below quota.
Low, core, and star performers all do better with targets that break down big goals.
- Add at least one kicker.
Give a flat-rate incentive for negotiated terms such as upfront billing, multiyear term, or new product attachment.
Pay on Process
- Create additional quotas for leading indicators/behaviors.
Pay on behavior metrics such as pipeline generation, outbound activities, customer interactions, etc.
If you’re reading this and wondering how you will make all of those changes, the good news is that even one or two of these changes will significantly move the needle. Sign up for a free comp plan assessment to get tips on how to implement these tactics.