Compensation Plans: Today’s Tool for Business Success
Are you closing as much business as you’d like? If you’d like to increase revenue, close more sales and improve your bottom line, it may be time to take a closer look at your company’s current sales compensation plan. With some refinements and strategic changes, you may be able to positively impact your sales numbers in a short period of time.
Many firms develop their compensation plans in isolation from bigger picture business issues, as simply a way to pay salespeople. As a result, sales often don’t meet expectations, for reasons that are not initially obvious.
Just as frequently, companies in the midst of managing change, or suffering from lack of clarity around business strategy and direction, struggle to create compensation plans that drive sales people in the direction of the types of business the firm would like to see.
Ideally, compensation plans should both mirror your company’s business philosophy and be part of your company’s business planning process.
Addressing the underlying business issues hidden in these plans can be an excellent first step in creating a sound compensation plan that clearly states business objectives and pays people for meeting them.
Don’t neglect too, all of the other areas of your business that impact your company’s ability to achieve sales success, including:
Do you have the right people in the right jobs? Sales roles can be so different from one another that experience may count less than you’d like.
Does your process support revenue production? How hard is it to make a sale and to work a sale through your company’s system? Does your technology support the sales process or are there problems?
Is your product a fit for your target market? Is it everything it should be today to compete effectively or should you consider making enhancements, or even redirecting your sales people?
Clearly, having a compensation plan that is in alignment with your business goals and objectives is a key driver of sales success. And while designing a comp plan is often a fairly tactical exercise–examining performance metrics, territories and other factors–don’t lose sight of the strategic business issues that surround compensation plan development.