No one wants to make mid-year changes to a comp plan—especially quotas. A lot of blood, sweat, and tears goes into setting up those plans at the beginning of the year to meet corporate goals. Getting everyone to sign off on them, is, in and of itself, a major feat.
But alas, the best-laid plans are always subject to change. What if your company purchases another company and takes on new products? Or your company is purchased by a larger firm? What if products or services need to change to meet some unexpected shift in the market? Or what if, despite the best efforts of all, a particular part of a plan isn’t working as intended, and quotas are either too high or too low?
If this is the kind of situation you face, it may be time to do what all agile organizations do: make some adjustments.
First things first: You need a good, justifiable reason to change quotas mid-year. Change quotas in the middle of the year without a good reason and you’ll likely find yourself having to hire several new salespeople, if not a whole new team.
There are a number of good reasons you might decide to make some mid-year changes:
- Portfolios have expanded. Mid-year quota changes make sense if you’re increasing the number of products your sales professionals are allowed to sell due to unforeseen additions, for example, as a result of acquisitions.
- Portfolios have decreased. For whatever reason, there may be fewer products that are available to sell.
- Territories have changed. due to company reorganization.
- They just aren’t working. The quota mix isn’t producing the desired goal in terms of the products you want to boost. Some quotas are wildly overachieved, costing the company money while other products are not sold at all.
Those are all good justifications for adjusting quotas. Bad reasons would include just wanting to hit a higher revenue goal or to reduce expenses. If your company needs to make up $10 million in revenue or profit, you can’t just change quotas and expect your sales team to stay engaged. That won’t go over well with the sales team and could cause churn.
When creating the new plan, and communicating it, you need to be mindful of the results on your plan and on sales team morale. Here’s a few definite “do’s.”
- Try to create a win-win scenario—for example, raising the quota and adding new products to sell. When your employees make more money and your company generates more revenue, everyone’s happy.
- Similarly if the product mix on quotas needs to change (i.e., a higher quota on one product/service and a lower quota another), make sure there is ample opportunity to make up the commission amount on the newly favored product.
- Explain the need for change clearly and back it up with as many facts as possible so everyone understands why this is a needed and justifiable change.
- If quotas are expanded or reduced because of territory changes, make sure this is explained fully so that no one feels shortchanged.
- Provide training and sales enablement on any new products that are part of the new quota so that your sales force is ready to sell.