Everyone wants a sales compensation plan that’s simple. Something that’s easy for reps to understand, easy to calculate at the end of the month, and isn’t a pain to administer. It’s easy to fall into the trap of over-simplifying a sales comp plan, and just as easy to ignore the negative impact this can have on sales performance, morale, and relationships between sales and other departments.
The most important objective of a sales compensation plan is to motivate a sales team to accomplish what the company needs. At the most foundational level, a sales comp plan needs to be aligned with a company’s business objectives in order to drive the right type of behavior from a sales team. However, business objectives can also be complex. This is where oversimplification can hurt. When simplifying a comp plan, it should be simplified in the context of the overarching business objectives, rather than for the sake of simplicity itself. It’s tempting to choose the path of least resistance, but here that can have negative consequences down the road.
An alternative approach is to simplify by managing the complexity of the plan, rather than eliminating the complexity. More complexity is always good. Managing complexity is what creates pain. Automating commissions can help teams manage and administer highly complex comp plans with the same ease and simplicity of a single rate plan.
Don’t sacrifice your business objectives for the sake of simplicity. Manage the complexity with automation. We’ll do the heavy lifting for you.