On a popular kids show called Bluey (The best thing to come out of Australia since Performio), Bluey’s Dad tells a story set back a long time ago in a place called the 80s, where kids had no helmets, trampolines had no net…music was on cassettes, and skids were big. It’s wild to think how much has changed since mullets and neon were in style.
Nowadays we’d shudder to think of a time where there were no smartphones and high tech was rocking the latest Bon Jovie album on your walkman as you skateboarded through your neighborhood...yes, alone, by yourself, with no helmet and no parents around. Think how different your day to day life would be. Everything from communicating with friends to navigating your way around would be not just different, but unrecognizable.
Here at Performio, we talk about Incentive Comp A LOT, this tends to happen when you build tech that manages commissions. So when we think of a company's plans managing their business rather than their business managing their plans…We see a vision of someone in today’s world trying to find their way to Ridgemont High without…wait for it, GPS.
Not having an effective and efficient way to manage your commission plans puts any business at a major disadvantage. And while rocking a walkman might get you some hipster style points in today’s world, nobody’s giving up their iPhone for one. And that’s the stark difference between having a tool like Performio and not…Navigating the world without a Smartphone. As they said in the 80s…Gnarly.
You want to motivate your sales reps to support your business goals, and that means aligning compensation strategy with company priorities. But priorities can shift quickly, and rolling out changes to your compensation plan can be time consuming.
An agile Incentive Compensation Management (ICM) software solution is the key to alleviating the stress of comp plan changes and maintaining incentive compensation and business alignment.
The importance of sales compensation and business priority alignment
For your business to thrive, you need your salespeople to work in harmony with your business objectives. When you have alignment, sales reps are able to prioritize their work in a way that reflects your business priorities. This means structuring incentives so that your sales reps win when the company wins.
But compensation should never drive your strategy. Your business priorities should drive the compensation plan.
The challenge is to examine all the essential elements of a successful sales organization as they relate to compensation. Do you have the right job designs? Do you have the right people? Do you know what your competitors are doing in the market? Are you using the right channels to go to market? Do you want better pricing or do you want better volume? These are the conversations to have before deciding on compensation structures.
For alignment to work well, you must first get the correct insight, then align it to the sales strategy, and finally work on the incentive plan.
What happens when business priorities shift?
Business is rarely static. Changing circumstances can necessitate shifts in the company’s priorities—sometimes very quickly.
Mergers and acquisitions can completely restructure a business overnight. Periods of economic downturn can necessitate a stricter budget. Regulatory changes can force corporations to change their practices. Natural disasters and global pandemics can disrupt the supply chain and throw everything into disarray.
In cases like these, you’ll have to adjust your business priorities, and then bring your sales incentives back into alignment with the new priorities. To do that, you need to adjust your sales compensation plan. This involves building the plan, distributing the new plan to the sales staff, and getting sales reps to accept the new plan by signing the new agreement.
If you’re still using a sea of spreadsheets to manage your sales comp calculations, this will take a while. And worse, it’ll leave you vulnerable to errors that could further disrupt what is already a trying time for your business. When your salespeople don’t have confidence in the accuracy and transparency of your comp plan, they’ll doubt whether the company has their best interests in mind, leading to decreased morale, lower productivity, and (in the worst cases) increased attrition rates.
Performio closes the gap between shifting priorities and compensation plans
With Performio ICM, building or changing a comp plan is easy. No need to sort through rows of data in spreadsheets, modify individual copies, and hope there are no errors. Just make the necessary changes once, and the new plan will be automatically distributed to your sales team to accept and sign electronically.
Performio then automatically calculates sales compensation reports for sales reps, managers, and finance staff. It’ll take into account both the old plan and the new one, and it’ll do it all in one place. This ensures that even when business priorities shift, your incentive structure can keep in step.
Request a demo today to see how Performio can help your business.