Sales Force Compensation

The good news is that incentive plans work … the bad news is that incentive plans work! The sales compensation plan, when designed correctly, is an important management tool, enabling the sales force to effectively execute its intended role. All too often, however, companies get what they pay for vis-à-vis poorly conceived sales incentive plans (i.e., misdirected, unmotivated, or disenfranchised salespeople).

We help clients improve the effectiveness of their sales compensation systems through a variety of interventions:

In-house sales compensation workshop — typically a half- to one-day in-house workshop that provides training on key sales compensation design principles and concepts. Tailored to meet a client's specific issues, the workshop includes a meaningful discussion around the effectiveness of the company's current sales compensation plans.

Sales compensation plan audit — the audit is a quick assessment of the strengths as well as opportunities to improve current sales compensation plans, and is intended to give management insight into whether a complete sales compensation redesign initiative is warranted. The audit is performed in the context of the company's business objectives, go-to-market strategy, and definition of selling roles. The audit provides "directional" recommendations for consideration, but stops short of detailed sales compensation redesign recommendations.

Sales compensation plan design — this entails the complete process to assess the strengths and weaknesses of the current sales compensation system, articulate the go-forward sales compensation philosophy, and design detailed incentive plan specifications consistent with the client's business objectives, go-to-market strategy, and the nature of each sales role. The incentive design process produces definitive recommendations on the following plan elements:

Incentive eligibility
Target total cash compensation
Fixed/variable pay mix
Upside leverage for "excellence" performance
Performance measures and their relative weighting
Incentive form and mechanics
Performance range for each measure (i.e., the definition of threshold, target, and excellence performance)
Performance measurement timing and payout frequency.

Implementation support — this entails the support required to successfully manage the change associated with the rollout of a new sales compensation plan. Communication and implementation support services include:

Conducting focus groups to gauge potential sales force reaction and tailor the implementation plan accordingly
Drafting detailed incentive plan documentation to serve as a stand-alone reference guide
Developing supporting communication and training materials, including executive overview presentations, FAQ documents, and incentive earnings calculators
Training sales management and sales compensation administration staff on the key elements of the new plans.

Custom compensation surveys and benchmarking — gaining access to competitive pay levels or prevalence of practice data can be difficult, particularly in industries where published survey data are limited. We develop and administer custom compensation surveys designed to capture relevant insights into sales compensation pay levels and practices from your defined competitive labor market.

EIM software selection — we help clients evalute the various enterprise incentive management (EIM) software vendors to select the vendor best suited to their needs.

Contact us regarding any of our services or for speaking engagements

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