The “growth at all costs” mindset is a thing of the past. The volatility of the market in recent years has forced most businesses to think about more sustainable growth practices. Many now consider motivation-focused strategies to be essential for cultivating and sustaining high-performance revenue organizations.
But with that in mind, many business leaders still find themselves asking: How can we drive revenue more efficiently without burning out the resources that remain?
The answer lies in knowing how to pull the right incentive compensation levers at the right times — helping your sales reps stay motivated and deliver the best outcomes for your business’ evolving needs.
Incentive compensation, when approached thoughtfully, can be one of the most powerful tools in your revenue operations toolkit for fostering a culture that breeds high performers.
While designing a compensation plan is not one-size-fits-all, here are a few best practices to consider.
Align your incentive compensation strategy with business goals
It’s shocking how many organizations are blindly paying out commissions without measuring if and how those incentives are driving the right outcomes for their business.
Incentivizing behaviors that support actual organizational objectives helps sales reps prioritize, and adds another layer of motivational firepower to push performance to the next level. One effective strategy is thinking more holistically around the customer lifecycle and how to enable success beyond the initial sale.
You might consider incentivizing reps to not only win new business, but also to increase product adoption, showcase value over time, and reduce churn.
Drive motivation through transparency
If reps don’t clearly understand why your compensation plans are set up the way they are, they can’t be as aligned with the ultimate business objectives as they should be.
And if reps don’t understand the plan mechanics, or how it all translates to their paychecks, they will be hesitant to prioritize the behaviors you’re incentivizing. Any lack of transparency, communication or alignment will likely detract from your ability to build a thriving, performance-based culture.
Giving reps a clear view of their quota attainment to goal, providing leaderboards to spotlight how individuals and teams are performing in relation to others, and celebrating wins in real-time can boost morale and motivation.
Offering reps visibility into their potential future earnings, in addition to past and upcoming payouts, can also help them stay motivated to meet and exceed quota.
Don’t ‘set and forget’ sales goals
You don’t want to risk losing your top reps by failing to understand the impact of stale policies and strategies on performance and motivation. After all, 53% of reps start to reevaluate employment after 4-6 months of underperformance against quota.
In today’s market, it doesn’t make sense to set and forget sales targets. Regularly reviewing your incentives and quotas and adjusting plans accordingly not only ensures plans are aligned to company priorities and market changes, but also sets your sales team up for success in meeting and exceeding their goals.
At the end of the day, an effective incentive compensation strategy comes down to one thing: being nimble. Always be ready to optimize your plan.
Markets shift, business objectives change and incentives should too. This adaptability is the key to building a performance-based culture that inspires and motivates your team to bring their “A game” every day.
Mark Schopmeyer is the co-CEO of CaptivateIQ, an incentive compensation management platform he founded after spending too many years managing and tracking sales commissions in spreadsheets. Through CaptivateIQ, he now helps hundreds of go-to-market teams optimize their compensation strategies.
Illustration: Dom Guzman
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