10 Steps to Effective Sales & Compensation Planning

When approached thoughtfully, effective and timely sales and compensation planning can be a powerful lever for Go-to-Market (GTM) teams. 

Reliable sales performance management helps to clarify priorities and focus teams on reaching revenue objectives. In fact, highly-aligned organizations that work towards the same goals and share the same company mission are 72% more profitable – and they grow revenue 58% faster than their unaligned peers.

Further, a well-designed and communicated sales and comp plan helps earn the trust and confidence of the sales team, and, ultimately, motivates the team to increase their productivity and revenue results. According to CaptivateIQ’s Compensation & Motivation Pulse Survey – which polled 1,000 commissionable U.S. employees across GTM functions – 57% said working for commissions or bonuses motivates them to do a better job at work and over half (52%) said it motivates them to hit their goals.

The key, however, is ensuring your territory, quota, and comp plans are designed intentionally and effectively, instilling confidence and trust, boosting motivation and productivity, and driving towards larger strategic business goals.

A reliable sales and comp plan needs alignment across a few important models: seller capacity and capabilities, territory assignments, rep quotas, and incentive compensation. When these plans and models are in unison, reps are empowered to reach their goals — a win-win for the company and individual reps on your GTM team.

[BLOCKQUOTE
| Quote: When you adopt an ‘if it ain’t broke’ philosophy, then the best end-result you can ship is a reactive one. Rather, operations teams want to get ahead of planning to deliver an optimal, effective, and motivating sales plan.
| Author: Johnathan Warren
| Title: Director of RevOps, CaptivateIQ
]

Yet, challenges abound for many teams as they embark on annual planning efforts, which can be: 

• ‍Time-intensive, especially as resource-constrained operations teams push out planning further and further until it suddenly becomes a rush at the last minute, resulting in haphazard data collection, good-enough modeling, and frustrated stakeholder participation.

• Difficult to get cross-functional alignment. Siloed conversations and whiteboard math may not be disseminated to all of the key stakeholders, leading to incomplete or even wasted cycles and confusion. 

• Mired with data inconsistencies and inaccuracies. With data coming from multiple sources and often compiled and manipulated manually, modeling quickly becomes cumbersome, inflexible, and potentially inaccurate. 

• Quickly obsolete, with KPI (Key Performance Indicators) assumptions difficult to predict accurately and changes hard to manage in a timely manner. 

• Too generic when relying on technology that’s not tailored to the needs of high-growth GTM teams. 

How can teams avoid these potential pitfalls to successfully and efficiently prepare for revenue success throughout the upcoming fiscal year? In this guide, we cover the entire sales and incentive planning process to help compensation and revenue operations professionals create a flexible, fast, effective, and collaborative sales plan to confidently set their team up for success.