Revenue Operations

How to Create a Powerful Sales Policy Document

Bhushan Goel
min read
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You know, I am a huge fan of the movie ‘Rocky’. It is a solid entertainer. I mean, what’s not to love? The hooks, the jabs and the uppercuts: that’s some serious pump of adrenaline.

But, have you ever sat through heated arguments between sales teams about 5-inch overlaps in territories on a 5-mile lane? I’ve been there and I can attest that it is NOT fun watching them at each other’s throats on who gets 100% attribution of the deal. As much as I love a good fight, being the sales ops guy, I simply can’t sit with a tub of popcorn and wait for a knockout.

Sales teams during conflict

We ops people already have enough fires to put out on a daily basis. We certainly don’t feel the need to play referee in these fights. Like the wise lady we call Sweet Brown once said, ‘Ain’t nobody got time for that!’. So, let’s figure out a way to resolve disputes with very little effort and keep them to a minimum.

What Causes Disputes Between Sales Teams?

Most organizations today create clear swim lanes for their sales teams with respect to compensation. Certain parameters such as location, revenue or size of the prospect organization are put in place to define commissions on closing deals.

As companies grow, they become more global in nature and end up having multiple decision-makers across regions for a single product purchase. Two reps might be interacting with two different stakeholders from different regions but for the same deal.

Lack of clarity, loopholes and poor communication in such cases create a lot of friction among sales teams. And, guess who ends up in the middle of it all? Yes, we, the sales ops folks!

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You must always trust but verify. If you start by thinking like someone to whom the compensation plan applies, you will quickly identify challenges that may present themselves.

So, how do we solve it? With a comprehensive set of guidelines that are to be followed in occurrences of such disagreements a.k.a. Sales Policy Document. A policy doc is primarily drafted so that sales teams in organizations don’t go hunting across territories for opportunities. You create clauses that will resolve conflicts as well as act as a guideline for closing future deals. 

So, take a seat back and let me walk you through how you can make a working Sales policy document.

How to Make an Iron-Clad Sales Policy Document

If your Sales Policy doc has a lot of loose ends and ambiguity, it beats the purpose of making one in the first place. Bear in mind that all information must be incredibly precise and cover a wide set of scenarios and clauses.

Here are six common principles to follow when you make a document that works wonders in sorting out disputes between sales teams:

1. Outline resolution strategies

What’s your game plan for resolving disagreements? Write down the mechanisms you’ll apply (typically deal splits or comping both parties) to settle conflicts.

Provide clarity on when and where they will be applied so that queries are handled with minimal confusion.

Also, be as specific as you can with the percentage split of the opportunity upfront. This way, salespeople can have clear expectations much in advance and prevent duplicate forecasting of a single deal. 

2. Add in a whole lot of scenarios 

I cannot emphasize enough on the importance of this step! Wrack your brains to remember all those arguments you sat through and turn them into scenarios.

For every rule, you put into the document, add multiple examples so that you cover all possible instances that may arise. By doing so, you leave very little room for interpretation. No subjectivity whatsoever!

You could even run the document by your internal legal team on what exactly the policy states and stands for. This will reduce the number of queries as well as help new team members get up to speed quickly on how to tackle such issues.

3. Aim for consistency over fairness

In most policies, there will be tradeoffs which might be unfair to one of the teams. 

One team might get more benefit out of it than the other wherein the ‘losing’ team might feel that the decision was unfair. Nevertheless, you must ensure consistency in how you address those cases so that your salespeople are aligned to the policy, regardless of fairness. Consistency trumps fairness.

Remember, when it comes to the RoE, rewarding the ones who follow the policy comes before rewarding the efforts. Take for instance, despite having significantly contributed to closing the deal, the sales rep has made a small mistake.

Here, you do two things: (1) enforce the RoE on attribution and (2) reward the sales rep with a one-time commission simply to maintain morale. 

Once you start rewarding efforts, consistency goes out the window and the doc becomes yet another pointless policy. 

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4. Form a review board

Bring together leaders from various sales teams to provide a fair representation to all parties. Any conflicts which are unconventional or have an exception associated can be escalated to the review board for resolution.

The board also serves in providing valuable input on how to make the RoE more robust.

5. Get leadership buy-in

Have the document reviewed and accepted by all sales leaders. While this may be a tough nut to crack, it's well worth the effort. This exercise will ensure impartiality thus limiting unnecessary escalation. With fewer escalations, you’ll be putting less pressure on the admin team.

Moreover, you will be in for a pleasant surprise when you see their insights on technical issues your sales tools may have. With their inputs, these issues can be fixed before the RoE is rolled out. 

6. Strive for constant evolution

The document should be a living policy continuously evolving when new exceptions are seen or changes are made based on inputs of leadership. This is a crucial activity that should be done periodically to keep the RoE relevant in the ever-changing global landscape.

A bonus tip for those who manage teams with conflicts: take time to interact with the team, preferably in a personal setting.

Communicate the terms of the policy with utmost transparency. The team gets a chance to decompress and this catchup keeps up morale tremendously. A positive disposition can pave a path to new ideas as well.

With the above tips, you should be able to come up with a clear-cut policy document that makes life easier for both the sales and the admin team.

If you follow these instructions to the T, you will reduce disputes to a great extent. Like me, you might miss them, even. (Nah, I am just kidding. If I am in the mood for a fight, I watch Rocky again)

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