A little over a month until the New Year sounds like a long time but is it really? Your sales compensation plan documents must be delivered in writing to your reps prior to the start of the year.
There are things you can be doing right now to ease the end of year crunch. Or you can wait!
Remember last year?
Pulling that all-nighter before the kick-off meeting to make the final adjustments to your plan documents
Delivering incentive programs that don’t produce the results you expect
Unpredictable incentive expenses
Creating plans for different job functions that look like they come from different companies
Dense, complicated plan documents that are hard to read and full of ambiguity
Changing the year on last year’s ineffective plans expecting different results
So I say, get started now but really you should have started in October!
Now you might say - "but we haven't finished our strategic planning so what can I do?" There is excellent analysis you can do now that will not only inform your comp plan design process, but also be of great help with the overall strategic plan. Here are five things you can do now to help.
1. Assemble ALL of the existing sales plan documents and create a master view that allows you to compare the most significant components. You want to understand the earning potential of each role, the key measures and goals, and the value to the individual for achieving them.
2. Review your customer segmentation. Check to see if your territories are adequately assigned and that your team has the skills required to address your most important segments.
3. Assess how your reps spend their time. Understand what percentage of their time is spent finding new business, working with existing customers, or doing internal administration. Consider adding job roles if you identify inefficiencies.
4. Look at the quota attainment distribution of your direct sales reps. Identify who are well above quota, at quota, and below. You should have about 2/3 of your reps at quota or above. If you have less, dig into the reasons. You will need more time planning as territories and quotas may be seriously out of balance.
5. Understand what you are paying for performance. Check the current market conditions for your sales talent to see if you are paying the ap
propriate Target Total Compensation (TTC) at goal. Your top performers should be your highest paid reps and should earn well above the market value to ensure retention. Also look to see what you are actually paying those underachieving reps as it is often too much.