As another year comes to a close, go-to-market teams everywhere convene to begin their annual sales compensation planning processes. Key stakeholders from sales, finance, and RevOps will join meetings and analyze data in an attempt to create a sales compensation plan that satisfies each party’s needs.
Sales reps want accurate, real-time insight into how much they can expect to earn. Sales managers want comp plans that motivate and incentivize more of the right sales behaviors. And, executives want a sales compensation strategy that generates a positive ROI and aligns with revenue growth targets.
That’s a tall order. But, fear not reader, no matter where you are in the sales compensation planning process, this post has something for you. We’ve compiled some of the best expert quotes and opinions to keep in your back pocket while planning for the new year. Let’s get into it!
Recommended reading: Sales Capacity Planning
Creating a Solid Sales Strategy as Your Foundation
“I hear companies talk about having a buyer-first mentality, and then it’s funny — when you dig a little deeper, you see they have a linear sales process. They have sales-stage milestones designed to facilitate pipeline reviews and management reporting — versus reflective of how the buyer would engage with you if they were interested in your product or service. When you dig in, you see the process is not buyer first at all. There is still a big gap between how buyers want to buy and selling organizations’ ability to deliver those experiences.”
Mary Shea, VP of Evangelism, Enablement & Alliances at Outreach
“The purpose of a pitch isn’t necessarily to move others immediately to adopt your idea. The purpose is to offer something so compelling that it begins a conversation, brings the other person in as a participant, and eventually arrives at an outcome that appeals to both of you.”
Daniel Pink, Author of To Sell Is Human: The Surprising Truth About Moving Others
“The sales process must be aligned around the way your customer buys, rather than the way you want to sell.”
Girish Ramachandran, President of Tata Consultancy Services
“Sell the interview before you attempt to sell the product.”
Frank Bettger, Author of How I Raised Myself From Failure to Success in Selling
“Customers have changed way faster than salespeople, especially in the B2B space. That’s a powerful acknowledgment. It means that we need to run faster because customers are needing us less and less every single day.”
Alejandro Cabral, Global Digital Sales Transformation Leader at Kimberly-Clark
“Sales is an outcome, not a goal. It’s a function of doing numerous things right, starting from the moment you target a potential prospect until you finalize the deal.”
Jill Konrath, Author and Sales Advisor
“Do enough research to have an informed point of view about your prospect’s business. Do not make the prospect do your job for you. Show them that you’ve done the work pre-call to deserve time on their busy calendar. Every external meeting that they take means that there’s another internal meeting or project that they’re not working on.”
Willie Pierson, Vice President of Sales Development at BetterUp
Recommended reading: The Ultimate Sales Performance Checklist
About Sales Motivation & Motivation Theory
“People will typically be more enthusiastic where they feel a sense of belonging and see themselves as part of a community than they will in a workplace in which each person is left to his own devices.”
Alfie Kohn, Author of Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise and Other Bribes
“Management cannot provide a man with self-respect or with the respect of his fellows or with the satisfaction of needs for self-fulfillment. It can create conditions such that he is encouraged and enabled to seek such satisfactions for himself, or it can thwart him by failing to create those conditions.”
Douglas McGregor, Author of The Human Side of Enterprise
“The problem with making an extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road. Indeed, most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts.”
Daniel Pink, Author of Drive: The Surprising Truth About What Motivates Us
“Enthusiasm is by far the highest paid quality on earth, probably because it is one of the rarest; yet it is one of the most contagious.”
Frank Bettger, Author of How I Raised Myself From Failure to Success in Selling
Recommended reading: Using a Sales Leaderboard to Motivate Your Team
The Basics of Sales Compensation
“For many B2B organizations, sales comp is the largest expense in their sales organization. So we’re not talking small dollars. You need to rationalize the investment, run sensitivity analysis to understand what kind of costs you might incur based on different performance situations. And then, in parallel with that, it’s about making sure you have a really good communication plan, putting all the plan documents together, and having a good rollout plan because rolling out a comp plan is a chance to motivate the sales force, right? I don’t want to undersell the effort that’s required to implement a comp plan effectively.”
Chris Semain, Principal and Tech Practice Leader at the Alexander Group
“The highest value provided by sales personnel is to help customers make choices when there is uncertainty and risk. This event is known as the “point of persuasion”. The purpose of sales compensation is to reward seller success at the point of persuasion.”
David Cichelli, Author of Compensating the Sales Force: A Practical Guide to Designing Winning Sales Reward Programs
“Transparency is key, not only for attracting but retaining talent— and not just your top talent, your mid-tier talent as well. They need to have a comp plan that’s simple to understand and read. They need to have the support system in place to make sure they’re paid correctly and on time.
If you can make sure that your reps are clear on how they’re getting paid, and that they’re paid correctly and on time— that’s a big part of the battle. They will deal with the nightmare of late product releases, or a leader that’s a little too junior, or a team of lone wolves that’s not as collaborative as they were told— as long as they’re getting paid.
But when you start to compound these issues, and one of them is reps not knowing if they’ll be paid correctly and on time— that’s when people start to go sour, and the culture starts to erode.”
Matt Lewers, Director of Client Services, Blueprint Expansion
“The moment of truth in sales is not when a contract is signed…. the moment of truth is when someone makes up their mind and says “I will buy X”.”
Tito Bohrt, CEO of AltiSales
“Retention should be paramount regardless of where we are in the economic cycle. Companies with high churn aren’t sustainable.”
Chris Semain, Principal and Tech Practice Leader at the Alexander Group
“An objective without a plan is a dream.”
Douglas McGregor, Author of The Human Side of Enterprise
“Organizations spend millions on new sales initiatives to increase sales effectiveness but ignore the power of a logical, quota-setting process and timely communication. Make sure reps know their numbers before they start to sell. It really can be that simple. Get the process both started and completed prior to the year starting!”
Joseph Dimisa, Senior Client Partner, Global Sales Force Effectiveness & Rewards Advisory Leader at Korn Ferry
“Usually there are some fundamental questions that need to be asked before you even mention comp. For example, what types of behaviors do we want out of our sales force going forward? Are there strategic shifts taking place that likely mean we need to augment our comp plans? What behaviors aren’t we getting today that we need to be driving more consistently. Again, sales comp planning is really a go-to-market and job discussion before you get into the tactical nuances of comp.”
Chris Semain, Principal and Tech Practice Leader at the Alexander Group
“Roll something out then come back and say, ‘How did this work for you? What worked well? What didn’t?’ And then follow up with them and let them know that, because you had their voice, you turned it into a vote and made changes based on their feedback. There’s nothing like telling sales people, ‘We heard you, but more importantly we weren’t just focused on traction, we were focused on action– and we’ve actually put that into practical application now.’”
Roderick Jefferson, Senior Vice President of Enablement
“Your true worth is determined by how much more you give in value than you take in payment.”
Bob Burg, Author of The Go-Giver: A Little Story About a Powerful Business Idea
“Too simple of a plan and you’re not going to drive all the behaviors you want. At the same time, if you have ten priorities and they’re all number one, you’re going to wind up with a plan that your Ops team won’t be able to administer, and reps won’t be able to understand. You need to be mindful of what you can operationalize in your environment.”
Chris Semain, Principal and Tech Practice Leader at the Alexander Group
Recommended reading: Building Your First SDR Commission Plan
About Sales Compensation Planning in Tough Times
“When a recession hits, the first order of business is to not freak out or abandon your principles, your strategy, and what you’re trying to accomplish in the market. Pivoting your focus mid-operating period rarely goes over well with the sales force.”
Chris Semain, Principal and Tech Practice Leader at the Alexander Group
Recommended reading: The Definitive Guide to Recession-Proofing Your Sales Organization
Key Learnings
While there is no one-size-fits-all approach to sales compensation planning, there are several common themes across many of these expert opinions. Let’s recap:
- A great commission plan can’t save a bad sales strategy. If you find your commission program isn’t as effective as you’d hoped, it might be time to revisit your overarching sales strategy.
- Money alone can’t motivate peak sales performance. Motivation must be both intrinsic and extrinsic to drive real results. Don’t neglect company culture and employee engagement.
- Calibrate around business goals. Align your comp plans with specific sales targets or goals and be strategic about the behaviors you intend to motivate through compensation.
- Transparency beats complexity. It’s more important that your sales reps understand and have insight into how they’re paid than it is to have a sophisticated or overly complex comp structure.
And there you have it! Some of the best tips, tricks, mindsets, and opinions from our favorite experts and thought leaders. As you sit down to review your 2023 sales compensation structure, be sure to keep these in mind.
About Spiff
Spiff is a leading sales commission platform that automates commission calculations and motivates teams to drive top-line growth. With a combination of an intuitive UI, real-time visibility, and seamless integrations into current systems, Spiff is the first choice among high-growth businesses. The platform enables finance and sales operations teams to self-manage complex incentive compensation plans and provides transparency for sales teams.
