Incentra Insights

Sales Compensation Plans for 2020

Posted by David Chittock on Mar 12, 2020 2:18:00 PM

Sales incentive compensation plans

It’s Not Too Late to Get It Right

OK, so maybe you’ve got your 2020 sales incentive plan in place. But, just maybe you’re not sure if it’s the right plan for your salespeople. Don’t worry there’s still time to change it up and ensure you’ll get the edge in an increasingly competitive sales environment. So what do you need to keep in mind as you work to refine your approach to sales compensation?

2020 Sales Incentive Trends to Watch For

Recently, The Future of Customer Experience and Commerce, a think tank associated with SAP International, released an article entitled Five Sales Compensation Trends for 2020 that You Need to Know Today. The author discussed five common sales compensation trends for 2020 that will be leveraged by leading organizations.

Incentive compensation can be a strategic differentiator to drive sales. With highly knowledgeable customers who aren’t easily swayed by slick marketing, companies are focused on empowering their secret weapon: their sellers. So what are these five trends we need to understand?

The Most Important Sales Compensation Trends for 2020

  • Avoid flying blind - A strategic compensation plan drives and shapes profitable selling behaviors. For an organization to succeed today, sellers need to be motivated to execute on critical organizational goals. Strategic compensation plans are an effective mechanism to drive the best outcomes.

But gaining visibility into how compensation plans are impacting sales outcomes can be challenging.  To ensure you are driving the right behaviors, you will need a robust technology platform that will provide critical insight into how your plan is shaping sales behaviors and what outcomes are actually being driven.

  • Focus on ROI - To analyze compensation plan ROI, you will need to correlate each plan or plan element with associated revenue and spend. ROI analysis can be extremely difficult on spreadsheets or homegrown systems with limited transparency.

Leveraging automation with an AI recommendation engine can provide both insight into how much ROI a plan is generating and prescriptive recommendations on how to improve return. When organizations have greater insight into ROI, they can more readily detect costly plan elements that are draining money from the business and not generating revenue.

  • Emphasize Simplicity When Planning - Keeping compensation plans on the simple side, while still having enough variables to motivate different types of behaviors, ensures sales reps understand what they need to do and how they’ll benefit from their actions. Clear, straightforward plans are also easier to administer, streamlining the distribution and launching processes to put sellers on track faster.

  • Bridge Communication Gaps - Every strategic incentive compensation plan comes with a degree of complexity, and a plan cannot be effective if sales reps don’t understand the plan’s focus, intended selling goals, and what behaviors will deliver the best outcomes.

When a new plan is rolled out or existing plans are changed, sales reps need to understand how it will result in a positive outcome for the business and how they can best succeed with the new plan.

  • Prepare for Change - Organizations need the agility to adjust their sales compensation strategy to meet new and changing goals. Market change and disruption is a constant force, which makes rolling out a static plan at the beginning of the year and forgetting about it a thing of the past.

Incentive compensation plans require oversight to stay on target, and modern organizations need to plan for continuous review to ensure they are delivering the right outcomes and motivating the right sales behaviors.

A Flexible, Agile, and Robust Technology Platform

This article clearly confirms it.  Quite simply, this is what your sales incentive plan will need if you hope to succeed in 2020. It’s never too late to improve your plan. This is who we are and what we do. Give us a call.  We can help.

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Categories: Sales Incentives