8 Tips to Build a Winning Sales Compensation Plan in 2021

  • 18 November 2020

In a normal year, most well-managed companies will make minor changes to their sales compensation plans – 2020, however, has been the opposite of normal! Buyer/seller engagement has radically changed and that means sales incentive and compensation planning needs a reevaluation for 2021.


Sellers/Buyers behavior shifts in 2020


The Educated Buyer

Commercial buyers are pretty similar to mass consumers in 2020. When considering a purchase, they go online. Before visiting your website, they usually seek out similar buyers and take on board their feedback and experiences by way of review sites, social media posts, articles, and videos. All this readily available information and analysis has a major impact on the perceptions of a potential buyer in modern business.


The Self-Purchasers

Many buyers do not need any sales engagement and are happy to self-serve. There are multiple product/service choices, click-here demos, try-before-you-buy applications, self-configured solutions, with automated proposals and purchase agreements in place. Added to that, repeat customers often have no need to talk to a salesperson. Webchat, web demos, and video chat will answer most purchase questions.


The Data-Driven Prospectors

Old School cold calling is pretty much a thing of the past. Identifying target companies and buyers, developing outreach material, and drip campaign management has become the main focus.


The Virtual Sellers

Rapid adoption for buyers and sellers of video meetings, online demos, brings with it the confidence to make big-ticket purchases. Of course, personal, physical, face-to-face meetings will return, however not to pre-COVID-19 levels. Most businesses now have an assurance that they can sell online and engage effectively with a remote workforce.


What does this mean for Sales Incentive Compensation planning in 2021?


Reduced Persuasion

If a lead/prospect/customer is making their own purchase decisions, sales persuasion will be greatly reduced. Sales compensation is largely designed to utilize the skills of the salesperson in closing a deal or convincing the prospect to buy. High persuasion jobs typically have a compensation pay mix plan with a higher focus on the target incentive and less on the base pay. For low persuasion jobs, it’s the opposite – less incentive value and higher base pay.


The Revenue Workforce–Connected

There is now a surge in connecting the revenue workforce, where multiple roles within different teams are tied to driving revenue for an organization. Pre-sales, marketing, social media management, lead qualification, “try and buy” sellers, and customer success managers all contribute to revenue success. Designing and implementing collective incentive participation plans provide bonuses to reward these hugely important and interconnected contributors.


Our 8 tips for building a Sales Compensation Plan

1) Evaluate the incentive pay mix and the impact persuasion has on new business and renewals.


2) Implement incentive participation plans for the revenue workforce.


3) Revise existing target performance requirements. It’s important to be fair, honest, and realistic in current market conditions.


4) Tie incentive and KPI’s to CSAT, Customer Engagement, Customer Experience, and renewals.


5) Introduce sales contests: think about motivating performance using short-burst incentive programs.


6) Lower variable pay: where consistent high performers would welcome a rebalance towards a more fixed compensation plan, or at least more certainty in compensation.


7) Tie more pay to corporate results: right now and for 2021, companies will need their entire workforce to collectively achieve the goals set by the business.


8) Consider capping incentive pay: relevant for those with a sudden surge in demand for their products/services.

As always, there is no one-size-fits-all solution.



Barry Connellan is Business Development and Alliance Manager of Leaptree, a Revenue Performance Platform software company serving the Salesforce ecosystem.

Looking for an easy way to build a sales compensation plan in 2021? Get in touch to find out how Leaptree Incentivize can help.