Almost everyone involved in the sales compensation plan, at one time or another, asks about the ROI of the plan. In order to answer that question, we have to evaluate how the sales compensation plan is designed.
Luckily, sales compensation design follows a predictable process. We begin by defining sales roles and clearly articulating the sales strategy, and from that foundation, we build out the components for the plan, including answers to these fundamental questions:
Once we’ve answered these questions around sales roles and strategy, we can look at the mechanics of the plan. All too often people jump to the mechanics of the plan first, before defining the roles and strategies. Calculators come out, and people start adjusting commission rates. But that’s actually several steps into the process, when we start talking about the specifications to connect those pieces together.
It’s also important to look at quota setting and objectives, as well as governance –how we operate and evaluate the plan on an ongoing basis.
Looking at sales compensation as the sum of all of these elements, we can see several hot buttons in terms of what might drive ROI:
Check out our report entitled What’s Your Sales Comp ROI, which features a panel discussion of experienced sales executives on evaluating the return on sales compensation.
Download the PDF here: The Art and Science of Quota Setting.
We believe the findings in this report will provide valuable insight for your business. If you have questions or require assistance in addressing these topics or other sales effectiveness challenges in your organization, please contact us at www.SalesGlobe.com or (770) 337-9897.