How Clicktale Doubled Multi-Year Conversions With Its Sales Compensation Plan (And Five Tips You Can Use)

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Almost any company can adopt a performance-based reward system. A sales compensation plan is a great way to boost your conversion numbers dramatically – and have happier employees too.

Clicktale is a customer experience analytics company that was founded in 2006. In 2017, they added a new sales plan and accelerators, and the company doubled its conversions compared to 2016. The result was a 38% growth in bookings, and they did all that through a solid sales compensation plan.  

Two years after making the switch, the company had more than doubled its contracts. With their newly motivated sales team and new approach, the company proved that it’s possible to scale quickly. 

So, what constitutes a good sales compensation plan? Here are some tips to help you build your own:

Tip #1 – Establish Objectives and Roles

It’s always best to start from the beginning. The foundation of any good sales compensation plan is the business objective. Identify your goals and work with stakeholders to ensure that everyone is on the same page.

Once that’s done, start identifying sales roles. Remember that not all salespeople qualify for the same compensation plan… Some are in charge of larger contracts than others. 

Some roles only handle lead generation and don’t deal with conversions. Draft a unique compensation plan for each sales position in your organization based on performance and potential revenue.

Tip #2 – Scale Up Based on Performance

Your sales team needs to know that they have the potential to earn more. Clicktale’s sales compensation plan was performance-based, and that is one of the sales compensation tips you can take to the bank.

Think of it this way: when you reward your salespeople based on performance, the more they sell, the more they make. This type of plan (or sales culture) keeps them hungry. It also keeps them focused on reaching the company’s objectives.

To keep things even more exciting, you can implement sales cycles… That way your salespeople are constantly incentivized to work and meet deadlines. The cycles should also instill a sense of urgency, instead of letting them feel like they can slack off after a few good contract signings.

One of the most popular ways to incentivize sales is by paying commissions on the month cash is received by the company (not just on when a contract is signed).

Tip #3 – Reward the Behaviors You Want to See Repeated

This doesn’t mean what you might think it does… Rewarding certain behaviors is not about the actual performance, but the action. 

How do you implement that?

Take a look at your sales team and see what behavior benefits your business the most. Is it retaining old clients, or bringing in new business for your company? This will depend on the revenue coming in and how well specific roles meet your business goals.

Understanding all of this is critical to drafting a solid sales compensation plan, and here’s why. Once you know who’s focusing on the right thing and succeeding, you know who to reward.

You can draft your compensation structure in a way that favors either new business or repeat business. Make it clear to everyone what they need to focus on if they want higher commissions. Your employees will earn more, as will your company.

Every sale matters, but some contracts are more valuable to your company and deserve higher commissions. To set this up, you need to establish clear objectives for your business first.

Tip #4 – Offer Full Transparency to the Team

Before changing your existing plan and implementing a new one, talk to your team about it – and be transparent. Introducing changes can be nerve-wracking for some team members.

You need to assure everyone that your goal is to keep things fair, and to reward the sales team based on performance. Talk to your main salespeople and explain that a sales compensation plan could lead to a higher income for them, not just the company.

And don’t forget about other team members! As mentioned, sales teams have many roles, so you shouldn’t forget the people generating leads in favor of the ones getting conversions. Every team member matters. You could implement shared commissions or bonuses to help spread the rewards.

Explain the commission structure to new hires too: why it matters, what the pros and cons are, and what it means for them. One of the scariest things for new salespeople is not knowing the employer’s expectations. If you want them to succeed and grow your business, you need to be flexible and transparent with them.

Tip #5 – Build Experienced-Based Benefits Into the Plan

You should also keep experience-based benefits in mind. For example, you could try implementing a “buffer” to pay more commissions in the first three months as new people ramp up with your team. It takes away some of the pressure as they perfect their skills. They don’t waste time worrying about not earning enough money.

As your salespeople become better at their job, you can offer higher commissions relative to base salaries. Just make sure that the overall gross income of more senior team members increases when you implement the new plan.

However, experience-based benefits don’t have to be built-in from the beginning. It’s usually best to wait until overall sales have increased enough to make this type of compensation plan profitable.  

Conclusion

A sales compensation plan can boost your revenue. It’s an excellent way to empower and reward everyone in your sales team, to their benefit and your company’s… But you need to draft a solid plan first, or it can lead to disaster.

Many industries choose to offer performance-based rewards to keep employees motivated to bring in more business and earn more money. 

Do you want more tips on implementing beneficial reward systems that help with conversions? Sign up for more business coaching lessons at predictableprofits.com.

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