Top 3 Reasons Sales Compensation Plans Fail, According to Sales Compensation Expert Mark Coleman

MINNEAPOLIS, Nov. 16, 2010 /PRNewswire/ -- In today's sluggish economy, companies are striving to get the most out of each incentive dollar. Yet many companies miss the boat by failing to use sales compensation effectively. "There are three things that can really render sales compensation plans ineffective:  perpetual re-design, poor communication, and weak execution," says Mark Coleman, Managing Director with Compensation Analytics, LLC., a boutique consultancy that advises sales leaders and operational executives on optimizing sales incentive performance.

"Too many companies constantly change their sales compensation plans in an attempt to solve every issue within the sales force. Often, when given the choice of fixing strategy, sales management or incentives, executives choose to change incentives, regardless of any proof of this being an issue. Compensation plans and incentives should be modified infrequently and only when the design is misaligned with sales strategy or selling roles change," he said.

Communication is the lifeblood of an effective compensation plan. Without clear communication at the beginning of the performance period and regular reinforcement throughout, the incentive plan will not live up to its potential.

"Imagine how successful video games would have been if they forgot to display running scores," says Coleman. "This is an area where it really pays to listen to your communication specialists to ensure that messages are crafted professionally and delivered effectively."

Poor execution can also ruin a completely good compensation plan. This occurs when sales reps become confused by misleading reports, waste valuable selling time chasing down late commissions or wait on hold to reach a compensation specialist to resolve incorrect payments.

"Clients who work with us to conduct an end-to-end review are quickly able to identify the actions required to make sure that internal business processes and technologies don't put a damper on sales compensation," says Coleman.

Compensation plans that are straightforward, aligned with sales strategies and are supported by excellent communication and flawless execution will deliver more sales for your incentive dollar.  More information on this subject can be found by clicking here.

About Compensation Analytics, LLC.

Compensation Analytics is a boutique consultancy that advises sales leaders and operational executives on optimizing sales incentive performance through the alignment of designs, internal business processes and technology.

Mark Coleman is Managing Director with Compensation Analytics and has over 20 years of experience designing and delivering complex business and technology solutions. He is also a pioneer in the sales compensation space having worked with many of the major SPM vendors assisting with the evolution of their offerings. Prior to starting Compensation Analytics, Mark was a Partner with Accenture, a global management consulting, technology delivery and outsourcing company where he advised clients such as American Express, Northwestern Mutual, Allstate and Thrivent Financial. Mark holds a Bachelor of Science from the University of Waterloo and attended International Business School at Behoust University in France.

SOURCE Compensation Analytics, LLC.

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