Inflation is on the rise in the US, and we are all seeing the price of goods and services increase. During inflation, your costs are going up, and naturally, you will have to offset increased costs with increased price of your own products and services. This may negatively influence your customer base. At this time, it would be critical to retain and better compensate your sales reps in an inflated economy. So how do you protect your bottom line? Some ideas that can work are as follows:
- Basing comp plans on margins versus revenue
In times of inflation, your sales reps may be forced to offer discounts in order to get the sale across the finish line. If you pay your salespeople on the margins, they will work harder to keep that margin and will drive investment in your business. Giving them this greater transparency into what your margins are will create greater trust for your organization.
2. Bonus structure and other incentives
Salespeople love recognition, competition, and being paid for performance. They engage with contests and awards, and it gets them invested in your company. In this volatile market, it is critical to invest in your people. Consider non-cash incentives, rewards, and recognition when adjusting your comp plans.
3. Utilizing an agile sales comp management system
Having a system ready from the start that is flexible for changes will allow you to pivot to protect your business needs in changing times. Legacy homegrown systems are rigid and require a lot of time and effort to implement change. Instead of being held hostage by your system in times of crisis, invest in a modern, flexible solution that can change with your needs.
Smart organizations use all the help they can get in being prepared to navigate uncertain times. They find strategies to pivot and adapt that not only help them survive but also thrive in such times. A sales performance management (SPM) system can provide a holistic and cohesive solution to develop and manage these strategies for change.