Successful organizations do not stop themselves from changing their sales commission strategy. They understand the individual aspirations of different sales representatives and the challenges of diverse sales territories. A single sales commission plan may not work well across the organizations. In addition to that, it’s always recommended to try out different compensation plans and take calculated risks to understand which model is giving the best results.
If you are stuck with one sales commission process which is giving you zero results, this blog is for you. We will discuss the impact of bringing change to your sales commission plan, prerequisites of introducing new methods, useful strategies to manage different types of compensation, and how to adapt to the new ways without any hassle with compensation management tools.
When do you need to change the sales commission?
The last point is highly important as most businesses are quickly changing their strategy and becoming more aggressive to keep in pace with the evolving market. Though most organizations prefer to bring changes to their sales commission in a year, the present market can push businesses to rethink their sales commission strategy.
Prerequisites of changing a compensation structure
1) Focus on communication: If you have studied your sales commission carefully and are now determined to change your plan, make sure your salespeople are aware of the new strategy. Before making any change, inform your sales manager, reps and region leaders about the new initiative and ask for their suggestions.
When you communicate to them about the changes, focus on passing two key information-
a) why the plan is changing
b) what the key behaviors are that you want to reward moving forward
Sales commission is a key factor of sales and an organization’s growth. It’s advised to embark on this journey together. Plus, the collective and practical wisdom from the sales team can help you to create a rewarding sales compensation plan and scale commissions.
2) Ensure synergy across your organization: Not just your salespeople, but make sure your finance team and other stakeholders are also onboard with the new commission initiatives. This is important as they are an integral part of the sales commission program and their approval and suggestion can accelerate your initiatives. Understand their challenges in implementing the new commission plan. The finance team’s role is crucial here as they release the payouts. Their confidence in your new sales commission program is mandatory to improve commission processing time.
3) Identify potential risks and setbacks: While planning for your next sales commission program, try to visualize the forthcoming challenges. Ask your experienced sales reps about their assumption, reservation, and thoughts about the new activities. Float the idea and template in the sales team and observe the reaction. Collect the feedback to iterate and improve your sales commission plan.
4) Evaluate rigorously before rolling out the new plan: Though you have planned everything well, make sure you have a mock test of multiple scenarios that may occur while achieving the commission. If you are using sales compensation software to manage your commission program, test that too. This exercise will help you to run the sales compensation program without any glitches and avoiding all unnecessary disputes.
5) Closely track the sales process after launching your sales commission program: After launching the program make sure you monitor your sales process. If you find any disruption in the sales efforts due to the new commission program, address it immediately. You have made adjustments or changed your sales commission to uplift your company sales and not to downgrade it.
Commission tracking software removes the chances of manual error from your sales commission management. The agility and robustness of the software bring better synergy among the sales team and HR department releasing quick and accurate payouts.
Universally, there are seven to eight commission plans that organizations follow. Though they add their own tweaks and modifications to make it more interesting and applicable for salespersons. If you are changing your commission plan, be mindful of the certain pros and cons of each commission type. We always advise sales leaders and managers to talk to their sales reps to identify the exact issue. And our findings have been-
Now, for these two different categories, organizations have to be smart while creating their commission plans.
And remember, your every commission plan is carried out to boost your sales process. In your new compensation practices, try to achieve the below checklists-
Your hardworking sales teams are trying their best to give you the best of revenue. The best compensation package, right combination of commission automation and commission management tools can help you to introduce flexible commissions solutions and improve employee Experience.
Introducing a new commission plan or making sudden changes in your sales incentive compensation management can be a big headache if you are doing it on spreadsheets or traditional legacy commission management software. Automated and modern sales commission software can help you to bring new life to your commission management.
Commission management solution is helping organizations significantly improve their sales commission program. If you want to explore how it can bring a transformation to your sales efforts, reach out for a demo today.
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