The Newsletter For CEO and Entrepreneurs

Sales Management Tips:
Announcing Quota and Compensation Plan Changes

By Suzanne Paling

A client asks, "I have set my salespeople's goals and created a new compensation plan for 2005, but there are some significant changes to both and I am concerned about the reaction from the sales staff. How should I handle this situation?"

Issuing sales quotas and unveiling a new compensation plan is tricky. You say you are concerned, which implies that you think your salespeople will not universally regard the new plan as positive.

I will assume that you have a sensible and fair new plan with sound business reasons behind it. Typically, reactions by salespeople may reflect concerns that they may make less money or that they may have to work harder. Some individuals may have to sell more of a product they don't particularly enjoy selling. Others may look for loopholes thinking "the company" is purposefully trying to under-compensate them. Given all this, the best approach is to roll out the new plan in a way that gives the salespeople time to think about it before reacting.

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Present the New Plan to the Team
At the end of a regular sales staff meeting, hand out the new sales goals and compensation plan. Ask the group to save any questions they may have for the moment. Present the more important changes and discuss why you made them. Be positive in your presentation, but don't oversell the plan.

After you finish, tell the sales representatives that you understand they have questions, but that you would like them to study the plan first. Ask them to sign up for individual meetings with you that will take place in a few days. Assure them that after you have met with everyone, there will be another group meeting.

Some sales representatives will try and ask questions right then and there, while others will insist they need to meet with you immediately. Don't be intimidated. Stick with your plan.

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Hold Individual Meetings
There will be a lot of talk amongst the sales representatives before the individual meetings begin. That's OK. During the individual meetings, take careful notes about their various issues with or questions about the plan. Look for patterns. Think about and make adjustments where necessary.

Meet Again As a Group
At the second meeting, discuss what was brought up in the individual meetings and publicly thank those who may have pointed out an error or persuaded you to make a change. If unpopular parts of the plan remain (and there always will be some), explain why you will not be changing them. Answer any and all questions that come up.

This approach may seem overly structured. But think about it this way: the sales representatives owe you the courtesy of looking at the new plan thoroughly before criticizing it or demanding that changes be made. By meeting with everyone individually, you will get feedback from all the sales representatives, not just the most vocal ones. In the end, this will lead to more buy-in for the new plan, which is ultimately what you wnt.

Suzanne M. Paling can be found at:


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