The success of any sale is dependent on what the customer perceives as their value. The success of your sales compensation strategy is dependent on what the customer perceives as your value. Sales and compensation people should be a step ahead of their customer in the evaluation process. This process should be done on a regular basis such as once a year and can be influenced by factors outside of your control such as market conditions, customer needs or goals and competition. The sales compensation plan is just one component of what drives your behaviour. Customer behaviour can also be influenced by other factors such as business objectives, personal plans and the opportunity to buy from you.
1. Understanding your strategy :
The sales compensation strategy should be understandable to both your customer and the business. This starts with the sales compensation software and the need to understand their role in it. This includes understanding what they should be concerned about and what they should look for when evaluating your value. The sales compensation strategy should also be clear to both you and your customer as there is much confusion between the two. It is helpful to create a slide deck that can be easily shared with other associates and your customers. This set of slides will define your strategy and clarify how successful you have been in achieving your goals.
2. Performance measurement :
The performance measurement should be clear to both your customer and the business. The feedback from your customer should be clear on what they valued from you and how you were paid for it. This helps you as well to understand where you were successful in creating value for your customer and where there is opportunity for improvement. You can use this same format when communicating with management about individual performance or the overall success of the sales compensation strategy. It should also be clear that you want to identify the success metrics that will drive your next plan.
3. Communicating the strategy :
The sales compensation strategy is designed to help motivate your people which means that each person should know why they are doing what they are doing and how their performance will be measured. Your customer should be able to clearly understand exactly why they are buying from you. This communication should be done at the beginning of the relationship and every year as this is important for future business and for driving success. It is important that this is done consistently to help your customers understand what they are buying and how you plan to measure their success. Every quarter the sales compensation strategy should be updated with new measures to keep it up to date.
4. Understanding what is important for them :
The customer needs to know that you are paying attention to their needs because it helps ensure that your customers will do business with you again. The goal of a good sales compensation plan is to create that connection so that there is a history of doing business together which can improve the chances of additional business in the future. You should also consider the experience of each sale and how that might influence future business. This can be done by using customer surveys or working with them to define what they want from you in the future and how you can manage that relationship to benefit both you and your customer.
ElevateHQ is a sales commission software to help you with sales performance tracking, review and goal setting. The revops framework allows you to track the performance of each sales representative without hindering their interactions with customers. It also allows you to specify your own commission rates.
