Sales Compensation Planning
Effective Sales Compensation Planning
Recruit, Retain, and Motivate your Sales team
Aligning sales processes with your business goals can be challenging, but not nearly as difficult as motivating a sales team to effectively carry out that sales process. When it comes to managing human capital, a good salesperson may be your greatest challenge. Not all salespeople work to grow your business, some are solely working to maximize their own income utilizing your compensation plan. Hence, the proper compensation plan is critically important to recruit, retain, and motivate your sales team to produce the results that your business needs.
The average sales team attrition in the B2B world is 27% per year. If you had 27% attrition on your engineering team, your total employees or your customers – it’d be a board-level catastrophe.
(Source: Aaron Ross, Author of “Predictable Revenue”)
Eight Objectives of Effective Compensation Planning
Balancing Your Needs and Resources with the Objectives of Your Salespeople
Many factors affect sales activity, on target earnings (OTE), and profitable growth. Atomic Revenue takes all of these into consideration so that you and your sales teams achieve mutual success. The objective is to build a sales compensation program which requires minimal modification — except for an internal infrastructure/process change or an external change to market conditions. A properly designed compensation program balances eight essential responsibilities.
Understand compensation plan seeks to fulfill balance.
Incentivize the production of both correct sales activity and on target earnings (OTE).
Ensure attainability of sales goals.
Meet company budget allocation considerations.
Promote sales staff retention.
Articulate a plan that the Sales Team understands how to execute.
Advance proper (ethical) sales behavior.
Produce an appropriate and definable return on investment (ROI) at OTE.
For every additional year a close works for the same sales organization, deal size increases by 30%.
(Source: Dove Elkington: Profiling for Profit)
Atomic Revenue Sales Compensation
Understand. Plan. Execute. Analyze. Optimize.
Atomic Revenue produces two specific deliverables as part of an effective sales compensation plan. One without the other would be ineffective and likely require frequent modification. However, small to mid-size businesses rarely have the in-house expertise required to align sales performance activity with company financial evaluation as an effective compensation program.
Sales Activity and Performance Metrics Audit
Our team will assess the utilization of a sales person’s time to accomplish the sales activity and determine accurate sales team capacity to achieve performance criteria. Once processes and utilization are understood, we develop and calculate mathematically validated activity metrics for your organization. This helps ensure the attainability of ambitious sales quotas while creating a sales compensation model that each salesperson can readily buy into.
- Creating a sales compensation model that each salesperson can readily embrace.
- Motivating sales staff to sell more.
- Encouraging top performance of proper sales activity.
- Providing management and sales staff with a clear understanding of your compensation plan.
Variable Sales Compensation Model
The actual compensation plan comes in the form of a scenario-based model that addresses all aspects of the Sales Activity and Performance Metrics Audit. Most models clearly indicate the quantitative salesperson compensation as well as company financial impacts of both under and over performance.
Atomic Revenue understands that there
Grow your business for the benefit of the people.
If you’re ready to grow your business for the benefit of the people and drive lasting revenue results, contact our revenue operations team today for a no-obligation conversation with one of our subject matter experts.