Business owners and salespeople share a common enemy. They hate their sales comp plans.
As we approach another new calendar year, many companies are looking to tweak, 
adjust, or completely overhaul their compensation. I'm getting dozens of requests from frantic owners and managers looking for ideas, insights, and best practices so they can magically transform their plans into something more motivational, equitable, and profitable.
Why does everyone hate their plan so much?
Owners gladly pay for productivity, but hate paying big money when salespeople:
- Take orders
- Don't expand their embedded base
- Scream for special pricing and concessions
- Take credit for team sales
- Don't sell anything at all
Those plans have too much "Checks Appeal". Most compensation plans were originally created when the products were different, the sales processes were different, and the solutions were simpler. Plans haven't evolved to reflect the times.
Salespeople hate their plans, too. Every salesperson knows the company across the street pays higher commissions, charges less for service, and provides better leads.
They also hate the non-sales related administrative BS they waste time on. Time spent getting projects designed, pricing checked, orders handled. Special bids and promotions applied correctly. Dealing with mistakes, returns, vendors.
Salespeople spend so 
little time doing what they love best, dealing with prospects and making sales. So they push for more administrative support, design support, engineering support, and marketing support. All of these increase costs, which then affects profitability.
"Spider Sense" Starts Tingling
That's why owners and CFOs take a hard look at their profits and costs, and start looking for ways to scale back their cost of sale.
Salespeople around the holidays feel like sheep about to get sheared, and rightly so. Their "Spider Sense" starts to tingle someone whispers the word "compensation".
Most companies use this three step method to change their comp plans: 
- Introduce the idea that comp plans will change
- Stand back in shock as the salespeople go completely insane.
- Postpone changes for another year.
Now you get the "Snowplow Effect", as the mounting pile of comp problems gets pushed down the road year after year. Eventually, the cost - profit balance gets way out of whack. Minor course-corrections won't do the trick, and major surgery is required.
It doesn't have to be this way. You can have high sales compensation and high profits, but the two areas need to be in alignment. The sales comp needs to reward the activities that lead to high margins and profits.
It can't pay "dead money" for run-rate business and service contract renewals. It can't pay big commissions on low margin, transactional sales.
Comp Plans Should Constantly Evolve
The best comp plans are constantly evolving as the business and marketplace changes. Minor changes every year provide continuity, yet allow the business to adapt.
Involve your senior salespeople in the dialogue, and find ways to solve their problems as well as yours. You'll find high profits and high sales compensation are not mutually exclusive.
