The five parts of the commission diamond
There are five facets to the process of evaluating and designing sales compensation plans. Furthermore, these frame the major components of the plans. Moreover, the organization should work through these facets while analyzing compensation plans and their performance. A sales department can go back and follow the steps while designing its compensation plans.
Define the C-Level goals and sales roles
C-level goals are important because they define priorities for the organization that will be converted to your sales compensation plans. Plus, it is equally important to have the right sales roles to accomplish your sales strategy. You should not go ahead with your compensation plan if you don’t have these well-defined.
Frame the sales compensation plans
This includes determining the target pay, setting a pay mix, establishing upside potential and setting performance thresholds. For this facet, it is important to consider the relevant labor market, stipulate job types, attract and retain top talent and establish performance limits.
Link pay and performance
Sales compensation plans are a key motivator. Therefore, you should create a relation between pay and performance on a regular basis, at both an organizational and individual level. Conduct a time-wide analysis and assign compensation relative to budget and performance.
Align team and financials
Sales compensation plans should positively impact a company’s top and bottom lines. Furthermore, it should align sales behavior directly to corporate financial objectives for increased sales performance and profits.
Operate for results
Get your sales compensation plans going. Moreover, perform the adequate reviews to increase sales and growth. Follow your sales strategy and stay focused. Do the proper adjustment that will lead to success.
As a matter of fact, a great way to keep track and control of your sales compensation plans is to use a sales commission software. Blitz is exactly what you are looking for, spread trust and increase sales reps’ motivation with seamless commission processes. Schedule your demo now.