How well did you execute your sales compensation strategy this year?
Even if you designed a perfect strategy, it is only as good as it was executed. Executing a sales compensation plan by handing off some notes to a comp administrator (who is armed with a spreadsheet and crossed fingers) will not produce the intended results. Here are just a few of the things that can go wrong:
1. Errors! Study upon study says your sales commission spreadsheets have errors. Stop being in denial. This means you are losing money and more importantly you are losing the trust of your sales force. What happens when your sales compensation plan is not trusted?
- Reps spend value selling minutes re-calculating and disputing their paychecks
- Reps begin to disagree ....they get discouraged, they sell whatever is easiest not necessarily most profitable
- Your best reps leave, retention becomes an issue
- Reps will report under payments, but you may have several unreported over payments
All the above mean you are negatively impacting your revenue.
2. Game of Telephone. Remember when you were a child and you played telephone, passing a sentence ear to ear in a circle? The results were often funny but there is nothing funny if the sales compensation plan you strategized is not implemented. What your administrator implemented in their spreadsheet is what they THOUGHT you wanted. If you model and design your commission plans in one spreadsheet or software package and then have to implement the actual execution of it in another, you are probably losing some details along the way. The plan you designed is not the one that is being used.
3. Lack of Visibility. The purpose of your sales compensation plans are to motivate your sales team and promote the behavior you need to reach your goals. If your sales reps cannot see how they are performing, or how close they are to receiving an accelerated rate, then your well thought out plan has lost its effectiveness.
The sales compensation process begins with strategy, moves to design, calculations and lastly communication. A lot of companies perform these steps in silos and throw the results over the wall or worse, skip them all together. Your sales compensation strategy has to be created and executed in an integrated way to be effective. An effective sales commission plan will drive the behavior of your sales team to produce the revenues you need to be successful and to dominate your industry. This is where we come in. Our Sales Motivator® product provides all the tools you need to create cohesive sales commission plans that will deliver your revenue goals all in one place.
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