Challenge
Overcoming Regional Disparities in Global Sales Compensation
Following a successful U.S. launch of a business platform and effective, a B2B technology distributor sought to expand this platform rollout across nine different international markets.
Because the company was targeting multiple, different regions, they wanted to understand the current-state global variation to take note of any important regional or local nuances. The primary launch challenge was aligning all countries to a global sales compensation framework that:
Limited outside crediting scenarios
Balanced global standards with individual regional needs
Ensured key stakeholder alignment on global guiding principles and component guidelines
After having Alexander Group’s support on the original U.S. launch and a full go-to-market (GTM) restructuring, the technology client partnered with our firm to successfully apply coverage and sales compensation solutions in the target markets.
Solution
Implementing a Region-Based Approach to Compensation Planning
Our team began this project by confirming the client’s current state pay philosophies and strategic objectives across the nine international markets. Following this, we conducted a platform job mapping assessment—based on the U.S. business launch—to help classify local jobs by key attributes while allowing for necessary regional variation. During this process, our firm worked closely with the client’s regional committees to develop country and region-specific compensation plans.
Based on this review, Alexander Group proposed several key design changes to standardize sales compensation into one global framework:
Clarifying Sales Incentive Plan (SIP) Eligibility
The assessment revealed that there were significant global inconsistencies on what roles were eligible to be on SIP. To make eligibility consistent, the client could move seven roles off SIP—purchasing, marketing, vendor managers, credit and collections, sales operations, digital operations and platform success.
Adjusting Pay Mix
Suggested small shifts for SIP-eligible roles to better differentiate roles and bring all countries within recommended global pay mix parameters (+/- 10%), while most countries kept their existing pay mixes.
Incorporating Secondary Measure Flexibility
Regional preferences resulted in secondary measures (revenue, age of inventory, accounts receivable, etc.) that diluted seller focus. To fix this, our team suggested temporary flexibility during rollout and recommended introducing a global sales adjusted gross profit (SAGP) measure to reduce role tension.
Adjusting Compensation Mechanics
Moved away from lump sum payouts below goal, implemented hard thresholds with increased acceleration and raised leverage above goal from 2.0X to 3.0X. Our team also set country-level caps where needed to address goal-setting concerns.
To support rollout efforts internally, our team created a nine-month roadmap that included SAGP and annual incentive plan review, global pay benchmarking, territory design, system updates, training and governance.
Impact
Empowering Global Teams with a Unified, Flexible Framework
Using these insights, the client’s company leaders quickly gained insight into differences across regions, including job titles, roles, coverage and sales compensation.
From there, the organization developed a global framework that balanced international alignment with flexibility for regions and autonomy for individual countries. This new framework improved consistency across key compensation components and made progress toward aligning measures and weights.
Over the following year, the organization was able to establish a global career pathing and competency model, complete a comprehensive job slotting exercise and standardize SAGP measures. These adjustments ensured that both front-end and back-end margin tracking would remain consistent across all countries.
Facing challenges with global sales compensation alignment?
Alexander Group can help you build a unified framework to streamline your rollout and empower teams across regions.
About Alexander Group
Alexander Group understands your revenue growth challenges. Since 1985, we’ve served more than 3,000 companies across the globe. This experience gives us not only a highly sophisticated set of best practices to grow revenue—we also have a rich repository of unique industry data that informs all our recommendations. Aligning product, marketing, operations and finance efforts behind a successful sales organization takes insight and hard work. We help the world’s leading organizations build the right revenue vision, transform their organizations and deliver results.
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