Challenge
Growth Goals Required Compensation Redesign
A multi-million-dollar technology leader aimed to increase revenue through its cloud-based software platform offering. To achieve this, the organization planned to double its sales force within the next year but first wanted to ensure the right compensation structure was in place. This led the company to partner with Alexander Group to evaluate existing plans and design market-competitive plans.
Prior to this engagement, the organization used a uniform plan design and pay curve across all core sales roles and segments (Account Executive, Account Manager and Channel Account Manager).
Alexander Group conducted a comprehensive review of existing sales compensation plans, analyzed pay for performance numbers and held interviews with various stakeholders. This diagnostic revealed four critical issues with the current system:
Our team also confirmed pay philosophy, strategic objectives, coverage and quota allocation approach. Following this thorough analysis, Alexander Group began building a systematic, multi-step process to address the four core challenges.
Solution
Four Strategic Changes to Drive Pay for Performance and Simplify Design
Alexander Group recommended four key changes in order to address pay-for-performance gaps and align plans with best compensation practices:
Key Change 1
Simplify pay curve structure
Reduced inflection points, thresholds and removed step payouts to make plans easier to understand and more impactful.
Key Change 2
Set upside earning potential for each role to align with market benchmarks.
Designed differentiated pay curves for Account Executives, Account Managers and Channel Partners:
Account Executive
Account Manager
Channel Partner
Key Change 3
Remove payout caps.
Eliminated caps to allow continued acceleration beyond quota, incentivizing sustained selling and maximizing revenue potential.
Key Change 4
Reward high quarterly performance while maintaining annual accountability.
Introduced a period-to-date performance methodology that rewards quarterly excellence without losing sight of annual goals.
Together, these recommendations would help create a clear, competitive framework that motivates sellers and supports long-term growth.
Impact
Market Alignment, Seller Buy-In and a Stronger Performance Culture
Once implemented in the new fiscal year, the client is expected to see:
Upside (leverage) was closer to market practice for each role.
Now, top performers now have earning potential aligned with competitive benchmarks.
An uncomplicated pay curve design that would drive rep buy-in.
This simplification improves transparency and makes sure that sellers clearly understand how performance translates into earnings.
Incentivizes quarterly excellence along with helping the organization achieve its annual targets.
This approach would motivate sellers to deliver consistently throughout the year.
Reduces weight from discretionary measure to quantitative measure to drive enhanced pay-for-performance mentality.
Sellers are motivated by measurable results rather than subjective evaluations.
Ultimately, the client appreciated this systemic approach and walked away with a stronger sales compensation plan structure for their software.
Alexander Group Can Help Refine Your Sales Comp Plans
Contact us today and we’ll help design plans that will streamline pay curves, reward talent and position your organization for growth.
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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