The Role of Sales Compensation in Driving Business Growth

Stephen Long is a highly accomplished sales compensation & operations executive with an impressive track record of over 25 years in the field. He brings an experienced point-of-view to the show and has a profound understanding of the intricate dynamics that drive sales success.

He is currently the Head of Global Sales Compensation at Blue Yonder, a world-leading digital supply chain management company operating as an independent subsidiary of Panasonic.

Before this role, he was the VP of Sales Compensation COE at McKesson, directing the compensation function including, developing the total cash compensation strategy, variable plan design, plan modeling and communication, and more.

In a conversation with Nabeil Alazzam, Stephen explores the role of sales compensation in driving business growth and the importance of end-to-end involvement of the sales compensation team, from the design to the implementation of the go-to-market (GTM) strategy. He also stresses the need for accurate data, a shared understanding of comp plans, and the challenges of aligning incentives with desired outcomes.

Listen to this episode of The Sales Compensation Show to learn:

  • How sales compensation has evolved into an agile process
  • Why you should involve sales compensation in your GTM strategies
  • How to think strategically when implementing a GTM process

Three key takeaways:

#1: Sales compensation has evolved into an agile process

Sales compensation has undergone a significant transformation into a more agile process over the past two decades. Traditionally, sales compensation structures were often rigid and formulaic, typically relying on a fixed base salary with a commission component. However, as markets have become more dynamic and customer expectations have evolved, companies have recognized the need for greater flexibility and adaptability in their sales compensation strategies.

One of the key ways in which sales compensation has become more agile is through the introduction of variable and performance-based incentives. Sales teams are now frequently offered bonuses tied to specific, measurable performance metrics, allowing them to respond swiftly to market changes and adjust their efforts to align with corporate objectives.

"As a sales organization, you have to be extremely agile in order to adapt to and attack a changing market." - Stephen Long, Blue Yonder

Additionally, the integration of technology and data analytics has enabled real-time tracking and adjustment of compensation plans, empowering organizations to make data-driven decisions and optimize sales strategies in response to shifting market conditions.

Overall, this shift towards agility in sales compensation has improved alignment between individual salespeople and corporate goals, fostering a more responsive and competitive sales environment.

#2: Involve sales compensation in your GTM strategies

Sales compensation plays a pivotal role in shaping effective go-to-market (GTM) strategies for businesses. It serves as a powerful motivator for sales teams by aligning their incentives with the company’s overall objectives. A well-structured sales comp plan can drive desired sales outcomes, such as revenue growth, customer acquisition, or market penetration.

Stephen explained how involving the sales compensation team while designing GTM strategies can offer many benefits. Firstly, sales compensation helps motivate and incentivize sales reps to perform at their best. By offering engaging commissions, bonuses, and incentives, companies can encourage their salesforce to work towards achieving revenue targets, market share, and customer acquisition goals.

Moreover, sales compensation can be leveraged to steer salespeople toward selling specific products or services, thus influencing product mix and prioritization in the market. By linking compensation to the sale of certain items or the attainment of certain quotas, companies can guide their sales teams to focus on offerings that are strategically important or offer higher profit margins.

"Having the sales comp team involved upfront while designing your GTM strategy can help drive change in your organization." - Stephen Long, Blue Yonder

Sales compensation is also instrumental in attracting and retaining top talent. Offering competitive compensation packages can help a company attract skilled sales professionals, while performance-based incentives can retain and reward high-performing sales reps. In turn, this ensures the continuity of strong sales efforts in the chosen market segments.

Furthermore, the design of sales compensation can adapt to changes in the market or company strategy. For instance, during periods of expansion, businesses may offer more aggressive incentives to penetrate new markets quickly. Conversely, in times of market consolidation or cost-control, compensation plans can be adjusted to align with cost-effective selling strategies.

No one person has an end-to-end vision of the company operations, and involving the sales compensation team at the design stage gives the GTM strategy a higher chance of success.

#3: Think strategically when implementing a GTM process

To excel as a sales compensation leader, it’s essential to adopt a strategic approach when implementing a GTM process. Here are three key steps to help you navigate this path successfully:

1. Strategic Alignment: Start by closely aligning your efforts with your organization’s overall business goals and GTM plan. By clearly understanding the company’s target market, value proposition, and competitive landscape, you can design incentive structures that motivate sales teams to focus on the right priorities. This alignment ensures that compensation plans are in sync with the broader strategic goals, promoting a balanced and goal-oriented sales force.

2. Clear KPI Establishment: It’s pivotal to establish clear, measurable key performance indicators (KPIs) that directly correlate with the GTM strategy. These KPIs should not only be relevant to the sales team but also easily trackable and consistently communicated. This will enable you to regularly assess the effectiveness of the compensation plans, make data-driven adjustments, and ensure that the sales force remains on track to achieve the intended GTM objectives.

3. Create a Transparent Culture: Lastly, fostering a culture of transparency and collaboration is critical. Engage in ongoing dialogue with your sales teams, gather feedback and address concerns. When sales reps understand how their compensation is tied to the GTM strategy, they are more likely to embrace the plan, feel motivated, and work cohesively toward shared goals. Open lines of communication and a flexible approach to compensation adjustments are essential for adapting to changing market conditions and evolving GTM strategies. In this way, you can create a framework that not only supports GTM success but also drives long-term sales excellence.

The Sales Compensation Show is brought to you by, the world’s first sales compensation platform designed around the agile methodology of CompOps. Find us by searching “sales compensation” on Apple Podcasts, Spotify, YouTube, and other streaming services.

To learn more about how can help design, execute, and optimize your sales comp strategy, start a conversation with us today.

Get our free, 5 min bi-weekly newsletter.
Used by 15k+ people to learn from top Sales Comp leaders.
Download this full guide as pdf