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Adapting to Change: 6 Proven Techniques for Managing Sales Compensation Plans

June 15, 2023
June 15, 2023

For most GTM (go-to-market) teams, sales change management is just part of the job, promoting organizational growth through adaptability. Thoughtfully revisiting and modifying various aspects of the sales process — incentive compensation plans, for example — can help businesses align with evolving market dynamics and achieve desired outcomes no matter the circumstances.

While iterating on your sales organization’s compensation plans may seem like a straightforward task, the implementation process demands careful planning, strategic thinking, and effective execution to be successful. By following these tried-and-true steps and effective change management strategies, you can optimize your modifications, add value to your sales team’s efforts, and ensure a smooth transition.

Start with objectives

Having a clear understanding of the goals your modifications are designed to meet will help prevent scope creep. Getting a group of stakeholders and decision-makers on board with what you want to accomplish will help ensure that key decisions are made promptly and with less rework is required as changes get socialized.

Prioritize consistency

With your clear objectives in mind, focus on changing only the things that really need to be changed. Modifying plan mechanics too frequently creates thrash and headaches for plan admins and payees alike, and the more the plans change, the less confidence your sales team will have in the accuracy of their payment calculations. If your idea for a big plan change isn't contributing to your overarching goals, consider waiting until it’s time to iterate for next year's plan.

Estimate the impact of changes

How do you expect the modification to change overall attainment, or individual and team performance? Changes can affect deal costs, so they need to be communicated and understood by relevant stakeholders, early and through multiple channels. For example, finance leaders will need to update their forecasting models accordingly, while sales leaders will need to educate their teams. Successful change management strategies prioritize clear and effective communication to prevent confusion, misalignment, and mistrust.

Slow down

Take your time to really consider how the plan modifications and transition period will impact your organization. Talk with some plan participants including sales team members and leaders to get their feedback. When you slow down the process to be more transparent, you often find that you need to make additional adjustments. Going even just a touch slower can be the difference between making a single change versus having to make multiple changes over a longer period of time.

Set targets to measure success

Understanding the key objectives of the modifications should enable you to set measurable goals to measure success against. Do you expect a larger percentage of the team to hit quota? More multi-year deals? Increased sales in specific product categories? Defining KPIs to measure the outcomes of your compensation plan modifications will help to hold the team accountable.

Gather feedback and learnings

Give the changes two to three months to settle in, then reconsider your process. In a short post-mortem meeting with key stakeholders, discuss what to do better next time. Did legal find out about the modification late in the process, and plan documentation changes slowed as a result? Can the sales enablement team spend more time explaining new focus areas for the sales team? Most importantly, get an understanding of how the modification helped. Did it drive the changes in behavior you expected? What would you do differently in hindsight? These learnings will help to build confidence in future modifications — and you can carry those lessons forward to do better the next time around.

Understanding these best practices for adjusting sales compensation plans is crucial for achieving optimal results in today's ever-changing business landscape. By implementing the steps and strategies outlined above, you can get ahead of change management hiccups and drive greater business success. 

Download our full guide — The Art of Sales Compensation: 6 Benchmarks for Adjusting Compensation Plans — for more on how to fine-tune your compensation change management strategies and unlock heightened levels of sales team motivation and performance.

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