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Missing signs that derail your revenue goals


This is fourth in a series of blogs inspired while training for a hike in the Grand Canyon. On the hike I did a few days ago with my friend, I was glad for the company but also for the second set of eyes. You see this trail was not well traveled and several of the trail signs were missing or faded. Some of the nails holding the signs had made bigger holes and the signs sometimes pointed in the wrong direction. There was not much foot traffic on this trail either making it impossible to follow where others may have walked because leaves covered any previous footsteps. It is necessary for a hiker to have a detail map and signs along the path to ensure a successful trip.

You may be missing signs in your sales organization too that will prevent you from having a successful year. The economy is booming and I hope your sales are too. Are they booming because of your sales team talent, your stellar sales compensation plan, or the economy? Some companies I talk too don’t really care why, they have a sales are up, life is good mindset.

I once had a CFO tell me that the commission cost of sales was too high. That is an interesting piece of data but it doesn’t tell the story. What the CFO did not say was that revenues were doubled. That’s right revenue was twice as high as the budget and the commission expense was in alignment with the additional revenue!

How do you evaluate where you are today and if you are missing any signs of trouble before year end? Let’s face it, 2018 is almost over. You’ll be looking at the 3rd quarter results soon.

Here’s my top questions that should be answered to help you evaluate your results and avoid missing the signs that will derail your fiscal year.

  1. Are your revenues on track?

  2. Are your commission expenses within budget?

  3. Are 60-70% of your sales reps expected to achieve quota?

  4. Are the sales reps selling the right mix of products?

  5. Can your sales reps see how they are tracking to each measure in their sales compensation plan?

  6. Are you paying appropriately for performance?

  7. Have your sales reps found the hole in your plan design?

  8. Do the sales reps understand how they are being paid?

  9. Do the sales reps dispute the commission calculation or measurement data?

  10. Can finance calculate commissions with little disputes from the sales reps?

Remember your sales compensation plan is a powerful tool in executing your company’s strategy through your sales force. You need to evaluate the effectiveness of the plan often to ensure alignment with the company’s goals and address any issues that may show up in the analysis before it is too late!