For some, rolling out the new plan in January is an exciting opportunity to reinvigorate their teams: "We cannot rest on our laurels if we want to meet the increasing growth expectations for our product." Others might be working on bigger changes, perhaps an overhaul to the current plan or a brand new plan ahead of launch: "We only have one chance to launch and need to get out of the gates fast."
Behind the scenes, preparation is well underway. The compensation team is in the midst of their busy planning season. They are conducting interviews with key stakeholders around the company, evaluating the current plan, designing new options and reviewing them with leadership for final approval.
One of the most critical components in this process is the rollout. A strong rollout rallies the troops and spurs them into action. It generates excitement and paints a clear picture for reps on how their performance will translate to more dollars.
Yet, in my experience, most companies treat the rollout itself as an afterthought instead of an opportunity. It is part of the routine, instead of a major event. We know the sales comp plan is one of the top ways to drive sales rep motivation, so why is there not more focus on the final delivery?
You need to plan ahead for the rollout, otherwise, you will fall back on what's quick and easy, instead of what's effective and lasting. This article shares four best practices for effectively rolling out a comp plan to your sales organization and driving greater impact.
Do it Early.Plan your roll-out activities before the start of the period. Reps tend to be goal-oriented and plan how they can go about earning the most payout from day No. 1, tailoring their effort accordingly.
Imagine receiving an assignment to write a term paper, but you find out it needs to be 100 pages halfway through the semester. That can be incredibly demotivating; you could have started earlier if you knew the expectations. Now you have to cram to make it happen or you might even give up altogether. Getting less than maximum effort from your salesforce decreases their potential compensation and ultimately company results.
I have worked with companies who have delayed rolling out because they needed a few extra weeks dotting I's and crossing T's on the plan details. Sure, it is ideal to have everything tied up with a bow, but if you are behind, share the vision and basic structure; leave the minutia for later. Not only is it good business, but there are even legal requirements in some states, for example, California and New York, for not distributing plans to employees paid on commission close to the start of the period.
Do it Multiple Ways. Adults have different preferences for learning. The same can be said for reps understanding the comp plan. Some prefer to listen to a presentation, while others are more visual and learn best by reading or looking at charts and illustrations. Others learn best by doing through a hands-on experience.
Despite these differences, not every company rolls out its plan in a way that appeals to everyone. In the "2015 Incentive Practices Research Survey" conducted by ZS Associates, among 54 health-care and biotech companies, 39% of companies used two or fewer methods to train the field on the comp plan.
The most successful approach should use multiple channels for communication and apply techniques for different ways to learn, as shown below.
|Learning Type||Roll-out Techniques|
Do it Together. Successful plan rollouts are collaborative. The rollout should not feel like a top-down, one-directional push of the corporate agenda onto the field (a rolldown). An effective plan garners the necessary buy in and support from the team along the way. For example, if you were able to conduct a field survey or gain rep feedback on the plan, here is your chance to convey the message: "We heard you and will be doing things differently based on your input."
One company I worked with closely involved their first line managers in the process. Two managers were chosen to be part of the core team to help capture the field's perspective early on in development of the plan. Prior to the roll out, a preview call was held with the entire management team to discuss the new plan and anticipate questions from the reps. During the roll out, one of the managers played a role in the presentation, while several others answered questions that their teams may have been thinking about. The end result was a strong plan with unified support. In fact, at the end of the period, there were very few questions directed toward headquarters because the managers were able to head off most of the questions themselves.
Keep Doing it. A rollout should not be a singular event. Repetition matters. Pouring your heart and soul into one meeting is great, but not everyone can attend. Schedule multiple calls and offer a window for office hours for those who want to ask questions in a less intimidating setting. Finally, record your rollout, so you can make it available for reps to listen to later on.
Beyond the rollout, create opportunities to reinforce the plan throughout the period. Incorporate the plan details into your standard training for new hires or transfers that join midway through the period. Offer a midcycle or end-of-cycle plan refresher. Most reps ask comp-related questions when they receive their scorecard or paycheck. Aligning these points with your company's payout dates can head off the flood of questions (and headaches) that tend to come in right around payout time. Plus, they require minimal effort; simply reuse the field-ready content that has already been created.
Not all rollouts are created equal, but every one should be impactful. Consider the situation, think about how to apply each of the 4 do's, and build it into your communication plan. Motivating a salesforce to understand the plan and hit the ground running on Jan. 1st is a New Years' resolution we all hope to keep.
About the Author
David Kriesman is a manager at ZS Associates in Philadelphia.
Read the November edition of Sales Compensation Focus.
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