As I ponder 20 years of sales compensation work, I’m seeing history repeat itself—specifically, the idea of sales support roles being on a sales compensation plan.
We’ve had more questions about putting sales support roles (sales operations, field marketing, etc.) on sales compensation plans in the past six months than in the past five years combined. This has happened before, in 1998 to 1999 and 2005 to 2006. You may recognize those time periods as particularly strong for the U.S. economy, and salespeople were doing exceptionally well. We are in one of those periods once again.
In both previous occasions, sales support personnel saw the salespeople making massive variable payouts due to the booming economy. However, the variable pay of the sales support roles varied little from what it had been in the past.
The argument started coming in from the field—then as now—that sales support plays an important role in driving the strong performance of their company, and they were correct. A handful of companies in the past two upturns gave the sales support people what they asked for: more of their pay based on the sales performance of the geography that they supported.
In both cases, when the economy turned south (as it inevitably will again this time), sales support screamed when their variable payouts dropped dramatically. The argument became the opposite of what it had been in the past: “I don’t control sales performance. I only support salespeople. If they aren’t driving leads and closing sales, I shouldn’t be penalized.” More often than not, sales support personnel who had been placed on a sales compensation plan were taken off and put back on a management incentive plan.
In short, don’t fall into the same trap when your sales support people ask to be on a sales incentive plan. When requested, ensure that the role meets two criteria before placing them on a sales compensation plan:
- They interact with the customer
- Their activities financially impact their employer
Without these two critical elements, don’t take the bait. Keep them on a management incentive plan that has less pay at risk and that is based more on things within their control. While it may seem like a hard message during boom times when they see the sales teams making large payouts, they’ll be thankful when the economy turns south and the poor sales performance doesn’t have as dramatic of an effect on their payouts. The corporate world is filled with companies that have roles that have been on a sales compensation “pendulum,” switching between sales compensation plans and management compensation plans. When you see this happen, this is likely a sign that the role should not be on a sales compensation plan.
This conversation also allows you the opportunity to discuss a sales career path with your sales support personnel. If they really are good at selling, you should encourage them to “carry the bag” themselves and move into a sales role.