Sales Leaders’ Guide To Rolling Out A Compensation Plan

Compensation plans that motivate sellers to accomplish corporate objectives are invaluable to sales growth. How sales leaders roll out compensation plans to their sales teams is crucial to gaining buy-in to the plan. Successful rollouts have three key attributes:

  • Transparency
  • Alignment
  • Stakeholder buy-in

It is up to the CSO/CRO to communicate the plan and ensure companywide buy-in. But rolling out compensation plans can be challenging. We’ve identified four essential meetings that should be scheduled during sales kickoff and immediately after to ensure effective rollouts of compensation plans.

First Meeting: CSO Announces Plan

Without early buy-in for the year’s compensation plan, the plan loses its effectiveness. Forrester data shows that delivering sales compensation plans in the first month of the year yields a 4% higher quota attainment than delivering them later. As a result, sales kickoffs end up being the best venue to communicate annual compensation plans. And this is where CSOs/CROs take center stage. During this first meeting, CSOs/CROs should:

  • Explain how sales goals drive overall go-to-market and corporate goals.
  • Convey the alignment between HR, sales operations, and sales executives in architecting the compensation plan.
  • Be transparent about any changes to the compensation plan and why those changes were made.
  • Keep their presentation high-level to inspire the abundance of sales roles present at sales kickoff meetings.

Second Meeting: Sales Leaders’ Direct Reports Explain Details

Sales leaders (geographical- or theater-based) should use this meeting to explain details such as performance measures and the plan’s mechanics. Furthermore, including stakeholders from HR and sales operations is critical to answering complex questions and conveying alignment. In addition to performance measures and plan mechanics, sales leaders should ensure that this meeting focuses on:

  • Highlighting any changes to the plan.
  • Explaining plan details, such as how to retire quota, earn commissions, become eligible for special incentives, and much more.
  • Demonstrating examples to show how commissions can be earned.
  • Making sellers aware of materials detailing the compensation plan such as FAQs and plan calculators.

Third Meeting: Sales Managers Cover More Granular Aspects Of Plan

Sales managers play a key role in ensuring buy-in to the annual compensation plan. Therefore, they should meet with their teams after the rollout to dive into more granular aspects of the plan. Again, collaborating with and including stakeholders from HR and sales operations is crucial. Sales managers should use this meeting to clarify how the compensation plan supports team goals, as well as to:

  • Reinforce how the compensation plan helps achieve corporate goals.
  • Discuss opportunities and solutions to reduce sales challenges.
  • Deepen plan understanding with demonstrations of plan calculations.
  • Confirm one-on-one meetings for each team member to go over the plan on an individual level.

Fourth Meeting: Sales Managers Meet One On One To Answer Individual Questions

Sellers must understand how compensation plans affect them specifically to be truly motivated and inspired. “What’s in it for me?” Therefore, one-on-one meetings between sellers and their manager are critical to a successful rollout. During these one-on-one sessions, managers should get more granular and concentrate on:

  • Explaining individual plan details and how it affects their potential earnings.
  • Listening to individual concerns not raised in prior meetings.
  • Reassuring reps that the plan is fair, competitive, and achievable.
  • Making sure reps understand the plan and know where they can find additional materials such as FAQs and plan calculators.

We’ve Got You Covered!

For more guidance on how to effectively roll out compensation plans, Forrester sales operations clients can access the report, How To Communicate Sales Compensation Plans.

Both clients and nonclients can access our blog, Four Things Sales Executives Should Do Immediately To Ensure A Fast Start To 2022. Additionally, both clients and nonclients can access our Forrester podcast dedicated to helping sales leaders, Ask A Sales Leader!

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