Compensation Plan Building

Design Compensation Plans that Achieve Your Goal

Compensation plan building rarely gets the attention it deserves as an integral component of the holistic sales and sales operations landscape.  Critically important, well-designed compensation plans reward reps appropriately for correct sales behaviors, can align sales efforts with corporate objectives and go-to-market strategies, and optimize the use of an organization’s budget for incentivizing the field.

Unfortunately, a variety of factors can create challenges in getting an effective set of plans up and running with the option for continual improvement.  A cumbersome, challenging set of tools and processes for annual planning makes analysis and iteration on plan design highly time-consuming and tedious work when it comes to reprogramming this effort into compensation tools for the year ahead.  This leads many companies to simply accept the status quo with little or no variation year over year.


Think About Your Territories


All compensation plan building starts with the territory the rep inherits.  The accounts that comprise the territory must reflect a potential for spending that is reflected in the goal set for this territory.  How often do reps all receive a similar or the same goal?  In my experience, too often.   However, not all territories are made the same.  Two reps in the SF Bay area can have a very different potential propensity to spend within their territories but will still be assigned the same number.



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