Incentive Compensation

How to Effectively Communicate Compensation Plan Changes to Your Sales Teams?

Siva Subramanian
min read
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You design a compensation plan with a lot of considerations, and with the hope of scaling your business to newer heights. But somehow, it doesn’t bring you the results you expected. 

Sounds familiar? Then you’d know the series of events that unfolds. Your sales strategy changes, your compensation plan changes. Above all, your sales teams aren’t going to be very pleased with it. 

So, how to make your teams adapt to the new norm while keeping the friction to a minimum?

1. Get Your Teams Involved Early in the Process

In general, compensation plan changes happen for many reasons at any given time. This is why bringing your teams into the mix is crucial to avoid any altercation in the future. 

In this way, they know all that’s being modified in the comp plan, and they’ll know that they aren’t blindsided, which only increases their trust. The more your teams feel involved, the better it is in implementing the plan. 

Let’s see this with an example. You make a sales manager part of designing a new comp plan. The heap of insights and information he’d have about customers and his team can be crucial in this case. As a result, the reps would also know that the comp plan changes are made in the best interest of everyone in the team. 

2. Outline a Communication Strategy

Now comes another crucial step in the process, which is, communicating the plans with your reps. Be transparent with them, and update them on every change made in the plan. 

Brownie points if you can put it across in simple terms, so that your reps don’t feel lost when they get to see the changes. Adding to this, you can create personalized messages for reps who’ll be in different pay ranges, which can make them understand the plan better. 

Not to forget, you may still get some backlashes. Ensure that you are empathetic towards reps, answer the many questions that come your way, and take the process forward with everyone on the same page. 

3. Make Reps Know the Reason for the Change

You wouldn’t modify the comp plan without a reason. It can be due to the introduction of new product features, budget changes, or there’s some other definite need to adjust the plan. Whatever be the reason, let your reps know it as well. Talk to them about the key metrics on which their incentives will be based, about compensations post quota attainment, etc. 

For example, you’ve introduced upselling as a goal to your reps in the new plan, and they’ll receive a commission every time they upsell a new product feature to their client. 

4. Review the Results Consistently

Your new plan isn’t going to be foolproof. There can be mistakes in it which you’ll get to know only after the implementation. Collaborate with your reps and get their feedback on the effectiveness of your plan, and the gaps in it. 

Keeping your communication open to feedback encourages participation from the reps, while making them very much a part of the process as well. 

Final Thoughts

Compensation plans do play a huge role in taking your business forward and are a crucial factor in keeping your reps focused and motivated. While changes to comp plans are inevitable, what’s important is how you make your teams respond to such changes. 

One other way to make this process hassle-free is to use commission software which can help you preview your plans beforehand. You’ll know the impact of the new plan in no time and can make better decisions based on it. Book a demo to know how Everstage can help you in this process. 

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