Burdocks and the biggest sales compensation design pitfall
This is sixth in a series of blogs inspired by endless hiking by oneself while training for my Grand Canyon hike. Today was a nice easy hike along old logging roads surrounded on both sides with lovely stonewalls and a few awesome views of the mountains that are starting to show off their fall colors.
Some of these old logging roads are rarely used and the weeds have started to reclaim their spot in the sun. One of these weeds is the burdock. If any of you have ever had a Golden Retriever you can understand my loathing for this particular weed. The burdock seeds would embed themselves into the long hair of my Golden requiring hours of careful picking them out of River’s fur. So, this gets me thinking about pitfalls of taking this trail with a long-haired dog and that leads me to pitfalls in commission plan design. What can I say, my mind does wonder while I wonder!
The biggest pitfall with commission plan design is misalignment with your company’s sales strategy. That’s right, the sales compensation planning group designs a plan that does not match the company’s sales strategy.
How can that be?
Easier than you think!
These are real life examples I’ve found while working with my prospects and clients:
The commission plan was created when the designer was at another company
The sales compensation plan has not changed in many years
The most important measure for the company receives the least amount of commission for the rep
The designer thinks one thing is important and the company has a different idea
The designer fails to ensure that sales can actually be measured in the way the commission plan needs
The sales compensation plan document is not clear or does not exist relying on managers to explain what’s important
Keep in mind as your start your 2019 sales compensation planning, the best plans are those that align with the company’s goal and reward the sales reps appropriately for what they deliver.