Why your sales compensation framework needs a strategic review in today’s uncertain market  

What makes today's uncertainty particularly challenging isn't just its presence — businesses have always faced uncertainty — but rather the unusual speed and complexity of change. Organizations that previously had months to adjust their strategies now find themselves needing to pivot within weeks or even days.

The uncertain economic climate is combined with major conflicts in the Middle East and Ukraine, and a rash of recent tariff activity.

The good news for sales organizations is that while they can’t control or impact the economic climate or global conflicts, they can control many aspects of their own internal operations.

The sales performance challenge

A number of challenges have arisen for sales organizations in recent years, including:

• Up to 70% of B2B sales reps reported missing sales quotas in 2024.
• The sales cycle has gotten longer, with sales reps reporting an average of five decision-makers involved in the B2B sales process; 28% point to drawn-out sales processes as the biggest reason their prospects back out.
• Sales reps are struggling to remain productive — only 33% say they spend their time actively selling. The rest of their time is spent on administrative tasks and searching for leads.

In this uncertain environment, the C-suite and sales team leaders have an opportunity to focus on the aspects of the sales compensation framework they can impact. While many tend to focus primarily on controlling costs, such a focus can negatively impact the ability to get to market quickly or to effectively meet customer needs and demands.

The sales compensation framework — your current sales strategy, sales organizational structure, and sales enablement (Figure 1.1) — offers opportunities to make improvements that will boost market share gains and sales staff morale. Unlike cost reduction, which has natural limits before damaging market effectiveness, revenue optimization is constrained only by your sales force's capabilities and market opportunities.

This is why it is so important to conduct timely reviews of your sales compensation framework. If you have a system with roles that are misaligned to the sales strategy or outdated jobs, you could be leaving money on the table.

A diagnostic framework:  What to watch for

As you consider your sales compensation framework, be alert to some important signs. Identifying and taking steps to address symptoms as they emerge can help you be proactive in managing costs and driving sales productivity. 

1. New products aren’t selling

When new products aren’t selling, a common response is to increase sales incentives. But, while higher incentives might help, there are a few other potential issues to consider:

• Your sales incentives may not align with the longer sales cycle that new products generally experience as the market warms up to it.
• Your sales teams may not have sufficient knowledge or training they need on the product features to convey the value proposition effectively.
• Target customer segments may not be aligned with the product’s value proposition.
• Channel strategies may no longer match customer buying preferences.

The introduction of a new product represents a great opportunity to proactively review incentives, segmentation, value propositions, and customer buying preferences.

2. Few sellers are making their quota

It’s common to assume that when sellers aren’t meeting quotas, higher incentives are required. Salespeople, though, aren’t “coin-operated” — they tend to follow the shortest path to the most money, not just the most money. Sellers are typically efficient in that they quickly learn where money can be made and where it can’t, regardless of the path’s alignment to company objectives.

Potential issues here might include:

• Setting unreasonable quotas
• Understaffing
• Territories that are too large
• A mismatch between talent and what needs to be sold
• Poor training
• Lack of sales support
• Sales reps who are overburdened with non-selling responsibilities

Sellers want to sell. Missed quotas don’t just impact the organization; they can lead to low morale and high turnover in the sales organization. 

3. Constantly recruiting sales talent

Reviewing the competitiveness of new hire pay is important, but it’s a starting point. Persistent recruitment challenges can signal deeper systemic issues.

For instance, if candidates apply but don’t accept offers, issues related to the sales organization’s reputation, or talent scarcity may play a role. If new hires leave too quickly, onboarding, the work environment, management quality, achievable quotas, and career development gaps may be missing the mark.

4. Sales reps are challenged to use technology efficiently

Technology has become a critical aid for sales reps, with 81% say that AI is helping them spend less time on manual tasks, saving about two hours a day. But too much technology can have the opposite effect; 45% of sales professionals are overwhelmed by the number of tools in their tech stack.

It’s important to ensure that reps understand when and how to use the tech tools available to them and that they receive appropriate training and ready access to help and support.

Building a resilient sales compensation framework

As you can see, there isn’t one simple answer for any of these issues and they may take time to investigate, but they will also promote a better understanding of what is and isn’t working in your organization and what you can and can’t control.

Markets, politics, legislation, technology, competitors, and business environments will all continue to change and remain out of your control. Focus on what you can control: your organization, and more specifically, features with a definitive, measurable ROI. That something is your sales compensation framework.