Sales Compensation Best Practices: Plan Modeling

Sales compensation plans are one of the most powerful tools organizations have to affect sales performance. Properly designed and deployed, sales compensation plans drive superior sales performance and result in achieving and exceeding sales and revenue targets - without exceeding compensation budgets.

Unfortunately, most companies fail to adequately test and model sales compensation plan variables and attainment scenarios. This failure is largely due to the inability of their current spreadsheet-based sales compensation management systems to easily create and effectively run models.

Best practice sales compensation management calls for sales and finance executives to work with sales operations to build and model sales compensation plans, analyze and forecast related commission earnings at both a macro (plan) and micro (individual) level, then choose those sets of plans that best fit corporate parameters for sales performance, revenue and associated commission costs.

Multiple models are needed because executives need to evaluate a myriad of changes and options - for example changes to quotas, commission rates, territories and organizational structures. Attainment levels also need to be modeled - for example a company may expect sales and the revenues associated with those sales to increase in some areas or with certain product lines, and decrease in other areas or with other product lines. By modeling both plans and data, executives are empowered to evaluate results and implement the plans that best fit their organization's business model.

Centive Compel provides a secure "virtual sandbox" for modeling plans at both the macro and micro level. With Compel Modeling, sales and finance executives have confidence that their sales plans will drive superior performance at a reasonable cost.

To learn more about the advantages of modeling sales compensation plans with Centive Compel, follow the links below.