When people ask sales operations questions on most topics I usually temper my answer with comments such as ‘but it depends on your organisation’ and ‘there’s not always a best answer for everyone’. However, there are a few topics areas where I really do think there is a best way to go about things and one such example is incentivising sales operations professionals.
There are a number of ways to incentivise a sales operations function. Personally I’ve been on a company bonus plan, on a quarterly MBO scheme and paid monthly aligned to the sales figure. I’ve heard of others as well but these are probably the main flavours.
Company Bonus Plan
Aligning to a company bonus scheme is lazy. Sales have metrics. For many functions it’s hard to measure their specific contributions thus the default is to align to company performance, however not the case for sales. I would highly recommend against this scheme in totality.
Quarterly MBOs were good and did drive me to finish small projects I set out to do. However, a lot of initiatives stretched beyond three months and so this didn’t work well for that. Some of my ‘projects’ I’ll admit were fun to work on and less directly tied to resulting sales, perhaps I’d call them ‘nice to haves’. Many were also self dictated and not part of a large program of change.
The final possible scheme is to align completely with the sales target and be paid on the same frequency and conditions. I thought I would really hate this concept. I felt I was better personally incentivised to finish sales operations goals and projects if my quarterly bonus depended on it. What I found very quickly is every single action I was taking I was asking myself the question ‘will this directly impact the top line’ and ‘how quickly’? This is the exact mindset your sales operations team should be in, all the time. All their actions should be working to make it easier to sell, losing quicker, qualifying stronger deals, etc. Aligning with sales also makes sales operations feel more integrated, rejoicing the highs and feelings the lows. To make this work properly the sales operations individual would be aligned at the same level of their responsibility. A global role would have a global target. An individual who worked within Germany would be aligned to the German target.
With regards to the blend between base pay and variable for sales operations, I will revert to my ‘it depends’ answers. I think this largely depends on the seniority of the person in question. The more senior the individual, the larger mix of their payment can be variable. Additionally its not out of the question to have a mix. For instance
Just as a wise sales operations person would know not to overcomplicate a sales compensation plan, the same rule must apply. Research shows that sales compensation plans should have no more than three variables. So here’s an example of something that could be workable and an example of a blended plan, if you don’t want to align completely to sales.
|Base Pay||Variable Pay||Total Pay|
Within that variable it would still make sense to heavily align to sales goals, this should always be the main driver. In this case below 2/3 of the variable is aligned to sales booking goals.
|Variable Pay Breakdown|
|Sales Booking Goals||20,000|
In an effort to make this simple the MBOs would be SMART goals and paid quarterly. The sales booking goals would be measured in a simple, uncomplicated terms.
Incentivising Sales Operations
Keeping your sales operations function engaged and motivated is critical. Motivated sales operations means motivated sales functions. I hope this blog has given you a few ideas about incentivising sales operations. Happy selling!