Sales Compensation Planning

Effective Sales Compensation Planning

Recruit, Retain, and Motivate your Sales team

Aligning sales processes with your business goals can be challenging, but not nearly as difficult as motivating a sales team to effectively carry out that sales process. When it comes to managing human capital, a good salesperson may be your greatest challenge. Not all salespeople work to grow your business, some are solely working to maximize their own income utilizing your compensation plan. Hence, the proper compensation plan is critically important to recruit, retain, and motivate your sales team to produce the results that your business needs.

The average sales team attrition in the B2B world is 27% per year. If you had 27% attrition on your engineering team, your total employees or your customers – it’d be a board-level catastrophe.

(Source: Aaron Ross, Author of “Predictable Revenue”)

Eight Objectives of Effective Compensation Planning

Balancing Your Needs and Resources with the Objectives of Your Salespeople

Many factors affect sales activity, on target earnings (OTE), and profitable growth.  Atomic Revenue takes all of these into consideration so that you and your sales teams achieve mutual success.   The objective is to build a sales compensation program which requires minimal modification — except for an internal infrastructure/process change or an external change to market conditions. A properly designed compensation program balances eight essential responsibilities.

Understand compensation plan seeks to fulfill balance.

Incentivize the production of both correct sales activity and on target earnings (OTE).

Ensure attainability of sales goals.

Meet company budget allocation considerations.

Promote sales staff retention.

Articulate a plan that the Sales Team understands how to execute.

Advance proper (ethical) sales behavior.

Produce an appropriate and definable return on investment (ROI) at OTE.

For every additional year a close works for the same sales organization, deal size increases by 30%.

(Source: Dove Elkington: Profiling for Profit)

Atomic Revenue Sales Compensation

Understand. Plan. Execute. Analyze. Optimize.

Atomic Revenue produces two specific deliverables as part of an effective sales compensation plan.  One without the other would be ineffective and likely require frequent modification.  However, small to mid-size businesses rarely have the in-house expertise required to align sales performance activity with company financial evaluation as an effective compensation program.

Sales Activity and Perfromance Metrics Audit

Our team will assess the utilization of a sales person’s time to accomplish the sales activity and determine accurate sales team capacity to achieve performance criteria. Once processes and utilization are understood, we develop and calculate mathematically validated activity metrics for your organization. This helps ensure the attainability of ambitious sales quotas while creating a sales compensation model that each salesperson can readily buy into. 

  • Creating a sales compensation model that each salesperson can readily embrace.
  • Motivating sales staff to sell more.
  • Encouraging top performance of proper sales activity.
  • Providing management and sales staff with a clear understanding of your compensation plan.

Variable Sales Compensation Model

The actual compensation plan comes in the form of a scenario-based model that addresses all aspects of the Sales Activity and Performance Metrics Audit. Most models clearly indicate the quantitative salesperson compensation as well as company financial impacts of both under and over performance.

Atomic Revenue understands that there are a lot of driving factors for a salesperson, including human capital, budget, and motivation considerations. This process mathematically calculates ROI and assures ROI production for each business, all while including the cost of the sale. Client specifications, historical results, and organizational objectives are all taken into consideration throughout the entire process.

What Adam has to say about Atomic Revenue...

The Financial Operations Model by Atomic Revenue was instrumental in gaining traction and generating revenue for our software service company. 

Adam

Founder Lifeblood.io

 

What Nathan has to say about Atomic Revenue...

Tara and Atomic Revenue were invaluable in our process to streamline multiple data points to provide and present the KPI reporting that really matters to Executive Management. Nathan Nelson

Marketing Operations Director, Enterprise Bank & Trust

Learn more about KPI Management

What Jason has to say about Atomic Revenue...

Atomic Revenue has greatly impacted my work experience at OMiga, by shortening my sales ramp-up period. Their sales tools have helped me communicate real value to the 17 new clients I have on-boarded since joining OMiga only 7 months ago. 

Jason Clark

Sales Executive, OMiga

What Tom has to say about Atomic Revenue...

One of the most valuable outcomes of our engagement with Atomic Revenue has been the Impact Declarations. Now seeing how powerful they are in collateral it is clear why Value Propositions aren’t enough. Tom Cooper

Co-Founder & CTO, Boosterville

Learn more about the Core Messaging Program

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