Is Your Sales Compensation System Likely to Alienate your Sales Force?

Is Your Sales Compensation System Likely to Alienate your Sales Force?

5 Ways to Ensure You Don’t Alienate and Lose Salespeople

How can you make sure that your sales compensation software keeps your salespeople happy and doesn't alienate them? Here are the top sales compensation issues which will frustrate your sales reps if they are not implemented correctly.

Ensure Maximum Data Visibility
As the saying goes, knowledge is power. When your sales reps and your sales managers can access accurate real-time data, they feel empowered. Performance history, projected earnings, and compensation reports should all be available to both salespeople and their management team on a frequent basis.

To maintain data visibility, sales performance information should be logged and processed at a transaction level, without any pre-aggregation. In this way, sales reps can view their actual performance history and drill down to view specifics. When data is viewable in detail, it reassures your sales force that their achievements are actually seen and dispels any uncertainty about mis-attribution of sales.

Make Timely Payments
It's typical for companies to pay sales reps on bi-weekly, monthly, quarterly or annual cycles and it is often seen that different elements of variable pay for an individual can be paid on differing frequencies. A lack of adherence to the committed schedule creates unnecessary stress and confusion around cash flow for your salespeople, generating uncertainty regarding when, exactly, payment will be made and is a sure way to distract them from their main activities of selling. It also severs a sense of connection between the effort that is put into the work and the reward for having done so.

Your sales compensation program should be able to process payments speedily and on time and report this clearly after a sale is made so as to enable a tangible sense of recognition and reward amongst your sales staff. In the case where the bonus or commissions may be paid quarterly or annually, reporting the earnings as quickly as possible after the sale allows the rep to view and verify the information before quickly moving on to the next opportunities they may have.

Automate Processing
Making errors when processing compensation payments increases the likelihood of over-paying your workforce and then clawing back payments. Nothing alienates your sales reps more than having to repay money through no fault of their own. Sales compensation software needs to get it right first time by ensuring greater data accuracy and transparency. It might seem contradictory to advise companies to both reduce the number of errors made when processing compensation payments and to also speed up the process. But both are possible by automating payment processing. Entering and tracking sales transactions manually is time-consuming and error-prone. Switch to a sales compensation program which enables automated data processing and automatic quota validation.

Enable Rapid Dispute Resolution
Rapid dispute resolution is rated as the most important program attribute, yet only 54% of firms have a clear dispute resolution process.

Even with a reliable and automated payment processing program, mistakes do happen. To keep your sales force on your side, make it easy for sales reps to trigger an inquiry and track its progress. Your dispute resolution system should be transparent, easy to initiate and quick to complete. Since nearly three quarters of pay disputes are easy to resolve, the early stages of dispute resolution can be automated so as to speedily solve simpler disagreements and rapidly pass on more complex ones, thus reinforcing your sales reps' sense of confidence in the whole system.

Make Expectations Clear
Even when your sales compensation software is working perfectly, if your sales reps don't understand the system they won't be able to utilize it properly and are more likely to feel that it is unfair. Although you might need to implement a complicated series of compensation plans, try to keep them as simple as possible and explain them clearly to be certain that your sales reps know what compensation to expect and when to expect it.

Similarly, once you have established parameters for sales performance compensation, don't change them too often. Frequent alterations in your sales compensation plan are confusing for your workforce, so if you do need to make changes, communicate them clearly and allow enough time for them to be understood before implementing them. Manipulating quotas is particularly alienating for your top-performing sales reps, the very workers whom you most wish to retain.

So how can you avoid alienating your salespeople? Ensure that these five issues are being properly addressed by your sales compensation plan to keep your sales staff on side.