You have very few workdays remaining to finalize your 2018 sales comp plan. With the holidays approaching, the end of the year can be filled with tension for sales operations teams as they strive to close out 2017 and simultaneously gear up for the New Year and all that comes with it.
Whether you plan six months in advance or wait until the last few weeks of the year (due to market changes, strategy shifts and/or procrastination), the end of the year always sees a flurry of activity to help prepare for the New Year. While technology is not the full solution, companies are using new tools to turn sales compensation management into a strategic tool so that it no longer becomes an operational hassle at year end.
Whatever your system of choice, certain processes must be implemented to ensure minimal disruption while gaining acceptance of the new plan during your rollout. At Optymyze, some of the key process steps we follow are:
Prior to rollout or implementation, you need a plan. Hopefully, you have a mature sales comp steering committee. If not, do a quick health check of what's working and what's not in the current plan. Look at any strategy or market shifts to understand where changes might be warranted. And of course, get feedback from the various stakeholders as you consider changes for 2018 and areas to monitor for the longer term.
As part of the plan-design process, you want to model both retrospectively and prospectively. Retrospective modeling tells you who the winners and losers would have been in the past using the proposed plan design. This helps you understand constituencies that will be unhappy, and help ensure that the winners are those embodying the forward-looking strategy. Prospective modeling, on the other hand, helps you "stress test" the plan under a variety of different potential outcomes to ensure the plan will be fiscally controlled and also consistently deliver appropriate rewards. If time permits, you can also run a pilot, using parallel information between the current plan and the new plan. Make performance data available to salespeople so they will have an idea of what to expect and become confident in what behaviors they need to demonstrate to maximize their earning potential.
Communication is paramount at any organization, and stakeholders on different levels require specific communications to help understand how the new plan will affect their individual roles within the company. It is also important to communicate with all individuals before the plan period begins.
Empowering each level with information about the new plan will reduce tension and help with the transition to the new plan.
Perhaps most critical is to provide training to sales managers so they are able to be your front line, providing consistent and correct answers about the plan as questions arise. If salespeople receive different answers from each manager, it will undermine all of the work put in to the plan design and communication.
It is also important to consider multiple learning methods to ensure the plan is understood by people with various learning styles. Consider:
Appealing to the different learning styles, reinforcing the plan and training your managers will help make the rollout a success.
Last, but not least, we need to make sure we are prepared to provide the salespeople with feedback on their performance and pay them based on their success. If you are leveraging a leading platform that allows for modeling and building plans in sandbox environments, much of the work can be done in advance as you design the plan.
Still, you need to ensure that any system you put in place is agile enough to handle the inevitable changes that will come. Make certain your organization is prepared for these changes with established and scalable processes for the upcoming year and beyond.
If you have not yet started your plan for a Jan. 1 rollout, it's not too late. Get ready to sprint, but these best practices can be compressed into a short period when needed. However, you can also set a New Year's resolution to keep in mind some of these best practices so you can build on your existing structure.
About the Author
Erich Sachse is vice president of Services Delivery at Optymyze.
Read the November edition of Sales Compensation Focus.
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