The Art of Modeling Sales Compensation Plans

Sales compensation modeling helps us to know what to expect in the future. When we look at a plan through multiple lenses, we can determine if sales compensation plans are viable, identify risks and prepare for the unexpected.

modeling sales compensation plansAs a sales leader, you should always have a clear view of the potential financial results of your sales compensation plan. In my experience, modeling can eliminate overpayments as large as 10% of your spend. For a mid-sized company spending $30 million in sales compensation every year, that represents a significant loss that could be invested in more strategic initiatives.

The ongoing process of modeling plans can also reveal gaps in sales strategy and execution, as well as many other potential trouble spots. These are just a couple of reasons why modeling is a critical part of sales compensation plan design, and every sales leader today wants to get it right.

To learn more about how you can model outcomes based on sales force behaviors, we have published a dedicated eguide where we discuss the benefits of modeling, reasons why modeling sometimes fails, and how often you should model. We also offer insights to help you build plan models, interpret results, and use them to adjust your sales compensation plan.

Compensation isn’t really complete until you’ve modeled it.

When done correctly, modeling will help you avoid unpleasant surprises after the plan goes live. Any investment you make in modeling will pay off.

Erich Sachse

Vice President, Professional Services

Erich has 14 years of experience leading engagements to assess and transform sales and channel performance for over 80 clients.

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