By Mike Emerson – Indian River Consulting Groups
The pandemic pushed customer-sales rep interactions toward digital channels. In the time that followed, customers’ preferences evolved to lean toward these channels. The year 2020 changed how, when and whether they want to interact with salespeople.
If you’re still operating with your pre-pandemic sales compensation plan, you’re overdue for a restructure. If you did adjust your sales compensation plan in the past few years, it is still worth re-evaluating, considering the changing and increasing role of inside sales reps.
Traditionally, companies have sought to change sales compensation plans to better align sales costs with growth and other business objectives. However, that strategy can cause sales reps to settle into “comfort zones” by failing to match their activities and behaviors to what the market is doing.
Now, companies have devised new paths to solve these issues, leaving behind legacy programs. The truth is traditional sales compensation plans that are tied to territory and tenure no longer work. It’s clear that the value sales reps provide has migrated away from facilitating transactions and sharing product features toward highly specialized sales teams that engage strongly in market-making activities.
If you haven’t updated your sales compensation plan to meet these changes in how sales teams interact with customers, now is the time to act. It’s time for a fresh sales force compensation plan. The key is to make sure your updated sales compensation plan is the right one.
Though redesign requires meticulous analysis and supportive implementation, if done correctly, it’s one of the most effective ways to realign your sales team around specific goals, attract and maintain quality salespeople, and cultivate a powerful culture.
Set Guideposts Before Restructuring Sales Compensation
Before you start, define the following critical components of your plan:
What Success Looks Like
Truthfully, creating a formula for a new sales compensation plan is the easy part, but beware of self-diagnoses that can lead to focusing on the wrong problems.