Automate, Motivate, and Optimize: 3 Secrets to Sales Comp Nirvana

Taimour Azizuddin

Last week, Palette partnered with Modern Sales Pros on an expert panel discussion about sales compensation. Along with our Vice President of Sales, Sarah Silberfeld, we were joined by David Weiss, CRO of The Sales Collective, and Jeff Kirchick, Vice President of Sales at Able. The panel discussed how to motivate salespeople through a compensation plan, how to optimize a compensation plan to get the best results, and how to use automation to align sales teams with business objectives. Here are some of the highlights of the discussion. 

Compensation plans are one of the biggest levers that sales leaders have to motivate their teams. We get the behavior we incentivize; good outcomes start with well designed compensation plans. Reps often gamify compensation plans; it’s up to sales leaders to understand how, and to ensure that this gamification is beneficial to the company. Once plans are designed, however, providing sales reps with easy and regular visibility into their performance is key to keep them engaged. Whatever compensation plan you have, sales leaders need to be able to show a seller what goals they have, how they got them, and how they are achievable. 

Plans should be regularly analyzed and reassessed, especially as business objectives change. It’s important to conduct cohort analysis and understand how changes in plan design impact performance. It’s also worth noting that there will be a lagging effect; after plans are changed there are still deals in flight attached to the former compensation plan. During this time period, it’s important to understand whether there are leading indicators that help you understand performance. For example, are there certain behaviors that you can track today which are indicative of what you might see tomorrow?  

The panel also touched upon the changing economic environment, and how sales leaders can adapt their tactics to keep sellers engaged. They have not seen the traditional 50/50 base plus variable split for OTE change during the current economic environment. However, more activity based goals and guarantees are important, especially for smaller organizations and newer sales teams with less consistency and less historical data. 

Finally, the panel also discussed how automation increasingly allows companies to create compensation plans that reflect the complexity of their business objectives and incentivize sales teams accordingly. Automation helps improve visibility for sales and finance teams, and can eliminate the end-of-quarter administrative back and forth that often takes place between sales and finance. Solving comp discrepancies becomes much quicker and easier. Reducing the manual work of administering comp plans also allows companies to build much more complexity into their plans from the start, ensuring they are closely in sync with larger goals. 

If you are interested in watching the full discussion, you can find a recording here.

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