What's the best way to introduce a new compensation plan to direct salespeople?

Part of any assessment comes from the existing team under the legacy plan. Listing and ranking complaints and new ideas should help determine if the current plan needs to be changed at all.

To roll out a new comp plan for direct sales, keep it simple. Clearly explain changes, highlight benefits, and address concerns. Offer training and support to ensure everyone's on board. Communication and transparency are key to a smooth transition. :)

Here are some effective strategies for introducing a new compensation plan to direct salespeople: ? Clear Communication: Explain changes transparently. ? Training Sessions: Educate on plan details. ? Incentives: Highlight benefits. ? Feedback Loop: Gather input. ? Rollout Timeline: Gradual implementation. Remember, a well-communicated plan fosters motivation and alignment.

Assessing your current compensation plan before making changes is a strategic approach that can help you tailor your new plan effectively. Understanding what aspects are effective and which ones need refinement is key to designing a plan that aligns with your goals and industry standards. Comparing your plan to what competitors offer can provide valuable insights into market trends and potential areas for improvement.

Any current plan that is not working needs to be changed OR if targets change plan may need to be adapted to reinforce behaviours you want to see. Tweaks or wholesale changes need to be considered and quickly. Most Sales Teams operate on quarterly or yearly commission bonus plans so setting up right at start is a HIGH priority. Communication is the key and explaining to the Team why we are doing this and what's in it for them personally. I think it is important to open the floor to hear / discuss concerns as you want it to be embraced and get team culture right so that the plan can be delivered. I also recommend that they be discussed at 1 2 1's as some team members may be uncomfortable discussing in front of the whole team.

If the compensation seems to affect the sales team negatively i.e. their expected earning might be lower, make sure to explain to them why you are changing the scheme before you do it. Let them have their say, let them query it and let them object! They might help you come up with a revised scheme that is better than what you had planned. A good sales person should be commercially astute i.e. understand profitability, margins and impact of overheads. Explaining how the impact of cost of sales might change compensation is a great way to start the conversation.

I think getting feedback PRIOR to making a decision is useful from your Sales Team in what they would like to see comms wise. This process will often flesh out concerns and also allow you to see the delta between their expectations and C-Level, IF there is one. Sharing how the assessment process works and the why also gets credit from Team as they often appreciate transparency in moments of change. I think providing significant overs, for greater than 100% of target is excellent incentive wise - with multipliers. This tens to get sales people VERY focused and allows Org to achieve what they need to to be successful.

Be honest about it. A good sales person will be commercially astute, which means they ill have a good idea if the cost of a product and/or service delivery. A good direct sales person should know the margin of the product or service. If you are changing the compensation plan be honest with them e.g. "Forecasts and market changes show we need to cut back for the buisness to survive" or "we need a better tream dynamic, the new structure encourages.better team working strategies" Just be honest as to why a change is taking place.

Communication, transparency and tie into Corporate mission / objectives is really important for a new compensation plan. Why are we doing this? Why is it good? What's in it for me? Are there any pitfalls? All of these areas should be addressed upfront so that the sales people have understanding, clarity, know what they have to do and can confidently go about their work, knowing if they put the work in and get the results, they are going to financially rewarded. Sharing perspective for a Leader with the Team is also important. "I get this is different, you may have concerns, but I have been her before and we can chart a path forward together on this."

Training and support are VITAL for a successful sales team. What is my role? What is our process? How do we sell effectively to hit targets? How do we work together so everyone wins? Sales training / refreshers, I personally prefer Miller Heiman strategic selling framework but there are others that are also good. Tools that enhance work effort or allow the sales person more output should be utilised to optimise "prime selling time." Getting trained in use of Salesforce and embedding in daily behaviours I think is very useful and weekly 1 2 1 with individual sales team members to track progress, find out where they may be struggling and getting them confident. Happy sales people are normally performing sales people in my experience.

Make sure you follow through and apply the new compensation plan and apply it to ALL sales people. The worst thing you can do is have some sales people on legacy compensation schemes and others on a new scheme, especially if their roles are the same/similar. What ever you, make sure you follow through

Sales people typically like being part of a successful team and love to be recognised for going above and beyond. I always look for two parts --- "the actual efforts" in working a deal (hygiene through sales funnel) and end results to properly assess rewards and who gets what. One of the biggest dangers to Team morale is the "lazy closer". Normally their claimed deals have holes in them and result in an unhappy client PLUS the Team sees they are not doing the hard yards like they are, and get resentful - it affects morale and team unity. The "lazy closer" always has excuses and "it's someone else's problem" when their deals sour." End of Year recognition is always well received with awards given to recognise work effort throughout the year.

Additionally, evaluating the impact of your compensation plan on crucial areas like sales performance, employee retention, and organizational culture is vital. Soliciting feedback from your sales team and customers can offer perspectives on how the current plan is perceived and the areas that need enhancement.