How do you measure the impact of commission changes on your sales?

1 Why measure commission impact?

Commission plans are designed to align your incentives with your company's goals and strategies, so as to motivate you to sell more, better, and smarter. However, these plans may change due to market conditions, customer feedback, product launches, or competitive pressures. It is thus essential to measure the impact of commission changes on your sales to determine if they are having the desired effect. Doing so can help you understand how commission changes affect your behavior and performance, identify potential problems or opportunities in your commission plan, adjust your sales strategy and tactics accordingly, communicate your feedback and suggestions to your management, and negotiate for a fair and competitive commission plan.

2 What metrics to use?

When measuring the impact of commission changes on your sales, you need to choose the metrics that best reflect your commission plan, sales cycle, and goals. Common metrics include sales volume, sales mix, sales quality, and sales efficiency. Sales volume can indicate how commission changes affect your overall output and productivity. Sales mix can demonstrate how commission changes affect your product or customer focus and diversification. Sales quality can illustrate how commission changes affect your pricing, negotiation, or relationship skills. Finally, sales efficiency can reveal how commission changes affect your time, resource, or budget management.

3 How to collect data?

In order to measure the impact of commission changes on your sales, you need to collect and analyze data from various sources. Some of this data may be available from your company's CRM system, accounting system, or sales reports, while other information may require more effort and creativity to obtain. This could include tracking your own sales activities and results with a spreadsheet, a journal, or an app; conducting surveys or interviews with customers, prospects, or colleagues; using online tools or software to monitor market trends, customer behavior, or competitor actions; and comparing your data with industry benchmarks, best practices, or peer groups.

4 How to interpret data?

Interpreting the data you have collected is essential in order to draw meaningful conclusions and insights. You need to compare your data before and after the commission changes, as well as with your goals and expectations. Additionally, other factors such as seasonality, external events, or random fluctuations should be taken into consideration. You should ask yourself questions such as: how did the commission changes affect sales volume, mix, quality, efficiency, motivation, satisfaction, loyalty, competitive advantage, market share and customer loyalty? Additionally, how did the commission changes align with your company's goals, strategies and values? Lastly, how did the commission changes compare with industry standards, best practices or peer groups?

5 How to act on data?

The final step of measuring the impact of commission changes on your sales is to act on the data that you have collected and interpreted. You need to use the data to improve your sales performance, communicate your feedback, and negotiate your commission plan. To optimize sales volume, mix, quality, and efficiency, you can adjust your sales strategy and tactics. Additionally, seek coaching, training, or mentoring to enhance your sales skills and knowledge. Furthermore, share your data, insights, and suggestions with management and colleagues to foster collaboration and learning. Negotiate for a commission plan that is fair, competitive, and motivating for you and your company. And lastly, don't forget to celebrate your achievements and reward yourself for your hard work and success!

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?