Episode 127


The Do’s and Don’ts of Comp Plans


The MSP Business School Team

Learn the do’s and don’ts of comp plans and know the best solution to make reps stay motivated while reducing losses

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About This Episode

In this episode, our team discusses what are the do’s and don’ts of comp plans.

0:35 Brian dives right into the conversation, talking about making plans for the upcoming year and sharing about inflationary pressure and new challenges. Tim shares his thoughts on inflation/recession and how he observed shifts in the account management side for the past few months.

3:18 Robb stresses his point and disagrees with the all-in method kind of compensation. He also pointed out inflation and how hard it is for everyone, especially for the owners.

5:45 Brian talks about various compensation models and points out what salespeople predominantly think – rewards and numbers. Robb proceeds and agrees with Brian noting that it’s fine to have different commission levels.

7:38 Robb goes ahead and talks about how to change commission plans. He explicates that it’s all right to change plans annually based on performance but with a 60-day notice so the rep will get a gist of what the future will be.

8:52 Tim pitches in and examples that in MSPs commissions tend to be aggressive so he observes that many MSPs change compensation plans multiple times a year which is a recipe for disaster.

11:02 The conversation veered to how ego as an owner can become a hurdle and can get in the way when talking about profits.

13:53 Robb gives an example of how and when a rep should be compensated generously. Tim also emphasizes that if a rep brings in three times or five times but your company still struggles, it’s time to get a business coach.

16:09 Brian shifts the topic of discussion from don’ts to do’s. He continues by outlining Robb’s examples and the significance of looking at the numbers long term.

21:00 Robb brings up that when there are changes, reps usually understand it. He also adds that it is significant to recognize that once you lower the commission, you must offer something that is very profitable. Giving them the ability and motivation while taking out known risks.

25:10 Tim expands Robbs’ ideas saying that in the event there’ll be changes, do not forget that sales reps are also human and has a family to feed. Also to be mindful of changes to not be so detrimental to the reps.

28:17 Robb closes the discussion by saying it’s all about communication. No matter what decisions are to be made, always have open communication with the reps the earlier the better and they’ll understand.


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