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  • Writer's pictureShawn Dunahue

Driving Results with a Winning Sales Compensation Plan

As a CEO or Sales Leader, I encourage you to take a moment and ask your sales team how their compensation is calculated and paid out. If you get varied responses or even an "I’m not sure," it’s likely you have a compensation plan that’s demotivating and getting little to no attention from your sales team. Conversely, if your team can articulate how their compensation is structured, how it’s tracked, and when they receive it, you have a plan that is motivating and engaging. Let’s delve into why a well-crafted sales compensation plan is crucial and how to ensure yours is driving the targeted results.

The Importance of a Sales Compensation Plan

One of the most powerful tools a CEO and Sales Leader has at their disposal is a Sales Compensation Plan. The behaviors and performance of your sales team are directly influenced by this plan. A well-designed plan serves as a powerful motivator, driving desired behaviors and delivering results. On the flip side, a poorly designed plan can be demotivating, leading to subpar performance and disengagement.

A Good Compensation Plan: Motivation and Alignment

A good sales compensation plan does more than just pay your team; it motivates them. It provides a clear road map aligned with the strategic goals of the business. It’s crucial to view the sales compensation plan as an investment, not an expense. The right plan will not only motivate your team but also steer them toward achieving the company’s key objectives.

Key Considerations in Developing a Sales Compensation Plan

When developing or refining a sales compensation plan, several key points must be considered:

Understanding Business Drivers

To create an effective plan, you need to understand the fundamental drivers of your business. Where does your company want to grow? What are the key deliverables that will drive this growth? Your sales compensation plan should align with these objectives, ensuring that your sales team’s efforts are focused on the right areas.

Growth and Key Deliverables

Consider incorporating accelerators that drive quarterly or annual growth for targeted products, services, or verticals. These accelerators can serve as additional motivation for your sales team to prioritize strategic areas that are critical to the business’s growth.

Trackable and Transparent Data

Ensure that the data used to calculate compensation is clear and easily trackable by both managers and salespeople. This transparency should be a part of regular 1:1 meeting discussions. When salespeople understand how their efforts translate into compensation, it fosters trust and drives motivation.

Flexibility and Adaptability

A flexible compensation plan allows for course corrections and the ability to pivot with changing business needs. The business environment is dynamic, and your compensation plan should be responsive to these changes to maintain momentum and motivation among your sales team.

Deliberate and Responsive Management

Be deliberate, intentional, and responsive in maintaining and adjusting the sales compensation plan. Regularly reviewing and updating the plan ensures it remains relevant and continues to drive desired behaviors and results.

Making Modifications to an Existing Compensation Plan

If your current compensation plan is not delivering the desired results, it’s time to make some modifications. Here’s how to start:

Identify Critical Elements

Begin by identifying 3-4 critical elements that should be reviewed. These might include base salary, commission structure, performance metrics, and accelerators.

Define the Value of Each Element

Understand the role each element plays in motivating and rewarding your sales team. For example, a well-structured commission plan can incentivize top performance, while a base salary provides financial stability.

Define Expected Outcomes

Clearly define what each element should deliver. For instance, your commission structure should drive sales of high-margin products or services that are strategic to the company’s growth.

Practical Steps for Modification

1.      Review Current Performance: Analyze the current performance against your strategic goals. Identify gaps where the compensation plan may be falling short.

2.      Gather Feedback: Engage with your sales team to gather feedback on the current plan. Understanding their perspectives can provide valuable insights into what’s working and what’s not.

3.      Pilot Changes: Consider piloting changes with a small group before a full rollout. This approach allows you to test and refine adjustments before impacting the entire team.

4.      Communicate Clearly: Clearly communicate any changes to the plan. Ensure that your sales team understands how the new plan works and how it benefits them.

How Tidewater Solutions Group, LLC Can Help

At Tidewater Solutions Group, LLC, we specialize in helping businesses assess and enhance their sales compensation plans. As a seasoned Revenue Operations Advisor and Fractional VP of Sales, I understand the nuances of creating a plan that not only drives results but also aligns with your business goals.

Our Approach

We begin by conducting a thorough review of your existing plan. This includes understanding your business drivers, growth targets, and key deliverables. We then identify critical elements that need modification and work with you to define their value and expected outcomes.

Customized Solutions

Our solutions are tailored to your unique business needs. We help you implement accelerators that drive growth, ensure data transparency, and build flexibility into your plan. Our goal is to create a compensation plan that is both motivating for your sales team and aligned with your strategic objectives.

Schedule a Consultation

Ready to take your sales compensation plan to the next level? Schedule an appointment with Tidewater Solutions Group, LLC. We’ll review your existing plan, understand where and how you want your business to grow, and provide actionable insights to enhance your compensation strategy.

The Wrap Up

A well-designed sales compensation plan is a powerful tool for driving results. By understanding your business drivers, incorporating key deliverables, and ensuring transparency and flexibility, you can create a plan that motivates your sales team and aligns with your business goals. Whether you’re developing a new plan or modifying an existing one, the right approach can make all the difference.

At Tidewater Solutions Group, LLC, we’re here to help you achieve your revenue targets. Let’s work together to create a sales compensation plan that delivers the targeted results your business needs.

Shawn Dunahue, CSL

Feel free to reach out to me, Shawn Dunahue, for a consultation and let’s embark on this journey toward achieving your sales goals with a motivating and effective sales compensation plan.


By incorporating these elements into your sales compensation plan, you’ll not only drive the desired results but also build a motivated, high-performing sales team. Let’s make your sales compensation plan the catalyst for your business’s growth and success!


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