Sales compensation consulting firms drive sales and growth. In-house management can provide a biased view of the plan, make critical mistakes in development and implementation, and cost businesses money.
Firms offer expertise and experience that managers do not bring to the table.
Management has limited time and resources, often taking on more tasks than they can confidently handle to keep operations running smoothly. Consultants offer a level of commitment that’s not possible for most management teams that are stretched to their limits already.
Working with the top firms – all too familiar with the classic sales jobs titles, will increase sales, employee retention and satisfaction.
What is a Sales Compensation Consulting Firm?
Sales compensation consulting firms work with business stakeholders to:
- Design sales compensation plans
- Implement the plans into the organization
Consulting firms offer guidance on compensation to help businesses maximize sales and keep their teams happy. Turnover rates in sales can be 27% – 39%, and it’s more cost-effective to keep these professionals happy than it is to have to rehire and retrain them.
Firms can help in multiple areas, fitting into organizations in a modular capacity.
You can hire a firm to offer:
- Compensation plans that motivate your team to reach KPIs and improve your bottom line along the way. A consultant will create the plan for you with your guidance and approval.
- Reviews. If you already have a plan in place, the consultant can review and adapt it to better serve your business.
- Implement your plan, work alongside sales teams and adapt the plan to improve results.
- Support while the plan is rolling out and ongoing to ensure that the current strategy pushes the organization towards its goals.
Profitable growth is the focal point of many compensation plans, but the right plan will attract top talent to the business. Leading sales talent will line up to become part of the team and remain with the company if it continues improving the plan.
Why Sales Compensation Plans Are Important
Sales compensation plans are all about balancing two main areas:
Gartner found that 48% of employees are actively searching for another job. If you lose 1 out of 2 employees, you’ll need to:
- Attract new talent and invest in recruitment. Average costs for hiring before adding in benefits or salary is between $4,000 and $20,000.
- Train employees.
Growth is put on the backburner when sales teams are understaffed. Compensation plans are crucial to business success because they allow for steady growth with fewer setbacks relating to high turnover rates and rehiring and training costs.
Sales compensation plans are important because they help organizations:
Sales reps want to know how they are compensated and what they can do to increase earnings. Clear, transparent plans allow your team’s go-getters to:
- Focus on the key tasks that improve sales
- Work productively to reach their own compensation goals
Productive teams will add to your bottom line because they’re working more diligently to earn more.
Employee turnover is expensive – as mentioned previously. You can increase retention rates by incorporating a plan that pushes sales reps and rewards higher productivity.
Attract Top Talent
Sales teams that are happy in their positions will organically promote your brand. Top talent will go to companies that offer forward-thinking compensation plans that maximize the person’s earning capabilities.
Effective plans motivate sales teams to continue growing to:
- Reach sales KPIs
- Retain more accounts
Driving growth through a compensation plan allows for dedicated teams that want to be part of your team.
Ease of Forecasting
A forecast is never 100% accurate, but when the right system is in place, you’ll have an easier time:
- Tracking sales
- Analyzing goals and quotas
- Running model scenarios
- Making internal adjustments
The right compensation plan helps push businesses closer to their goals, and while this can be done internally, it’s often better to work with a firm that offers consulting in this area.
Plans always put focus on sales. The right plan encourages sales reps to push their limits, make more sales and earn more money. Your plan can have multiple compensation avenues, all meant to drive your revenue higher:
- Fixed salary
If a sales rep hits a certain milestone, fixed bonuses offer them the incentive to continue making sales and boosting company revenue.
Companies with compensation plans that are not aligned with their sales team’s goals may add to their revenue at the risk of employees who are actively looking for new jobs. If you “share the wealth” with the right plan, retention rises along with revenue to create a win-win situation.
When plans are managed properly, they’ll provide key metrics that you can analyze to see what’s working and what isn’t working. For example, you may find that:
- 35% of employees are reaching bonus milestones
- 30% of sales reps have lower sales over the past six months
In this case, you can analyze what the bonus-reaching employees are doing and train the reps with lower sales on these new tactics.
Gaining insights into team strengths and weaknesses will empower your business to make critical changes to avoid slow or sluggish sales periods.
Benefits of Working with a Sales Compensation Consulting Firm
Consulting firms offering sales compensation provide businesses with the option of working with a seasoned professional who has experience in compensation plans. Economic uncertainty or disruption in supply chains can quickly cause plan breakdowns.
Compensation consultants offer numerous benefits compared to in-house development:
- Availability and resources: Managers or leaders who create compensation plans are adding another task to their overscheduled calendars. You have to put out fires and deal with plan development and implementation. Consulting firms can dedicate the time and resources necessary for planning success. It’s easier to hit deadlines and milestones for firms because they have one clear task.
- Cost: Failing to integrate a plan that encourages your team comes at a major cost. Employees may leave, productivity can fall, and milestones can be missed. Consultants have experience developing plans rapidly using the best practices and can monitor the plan’s success.
- Experience: Sales compensation consulting firms have experience in the field. These firms have a track record of success that they can leverage to improve your business’ sales.
Consulting firms provide an unbiased view of the compensation plan because they don’t benefit from the sales in the same way that internal management can.
What to Look for in a Sales Compensation Consulting Firm
Working with the right consulting is key to your overall business success. The right firm will offer:
- Experience in your industry: Industry-specific experience will be a valuable asset when working with a consulting firm. Ask the firm to demonstrate their expertise by showing you examples of helping companies in the same or similar vertical.
- Services: Does the firm offer the key services you need? Will they offer talent acquisition or organization strategy? Additional services can help your business stay on track to meet growth goals without needing to juggle working with multiple service providers.
- Size: Independent firms offer a close working relationship and may be able to dedicate more time to your plan. Larger firms have the manpower and resources to provide rapid solutions and plan reviews. If you have multiple sales teams and plans that may be best suited to different departments, larger firms may be ideal. The downside of a large firm is that you might not receive the same level of support that a smaller firm offers.
- Unique solutions: Some consulting firms offer unique solutions, such as their own software solutions for compensation plan management. Others offer industry-specific services that you may need. Consider whether unique solutions such as these are valuable to you.
Consulting firms are available for every budget, with firms that have been around for 50+ years and others which are just starting to make an impression on the industry. Below are some of the firms that are well known and offer critical services to sales teams.
9 Well Known Sales Compensation Consulting Firms
1. Korn Ferry
Korn Ferry was founded in 1969 in Los Angeles and has since grown into an international consulting firm. The large firm operates more than 100 offices in 53 countries and employs over 8,000 people across the globe.
Korn Ferry’s services include:
- Sales compensation plan design and implementation
- Total rewards
- Talent acquisition
- Business transformation
- Organization strategy
- Assessment and succession
- Leadership and professional development
- Board and CEO services
Korn Ferry can assist businesses in virtually every aspect of management, and they work with companies in a wide range of industries, including industrial, consumer markets, technology and more.
2. Alexander Group
The Alexander Group is a large consulting firm with offices across the world, including Atlanta, Chicago, Scottsdale, New York, London, San Francisco and São Paulo. The organization was founded in 1985, and since then, they have served more than 3,000 companies around the world.
Alexander Group was ranked one of America’s Best Management Consulting Firms in 2023. The firm offers a number of sales compensation consulting services, including:
- Plan design
- Plan assessment and benchmarking
- Custom market studies
- Governance and job architecture
- Pay levels and benchmarking
Alexander Group works closely with clients to analyze their current compensation strategy and design and implement new designs to drive results.
3. Better Sales Comp
Better Sales Comp (BSC) was founded in 2009 and offers senior-level guidance with highly experienced consultants. The average BSC member has more than two decades of experience.
The firm’s aim is to educate clients on sales compensation. They take a collaborative approach to creating plan designs.
Better Sales Comp offers the following consulting services:
- Sales compensation plan assessment
- Sales compensation plan design
- Quota setting best practices
- Plan documentation and communication
- Compensation plan best practices
- Plan governance roles and processes
Currently, BSC has four senior consultants that serve clients. The firm works with businesses in a wide range of industries, including tech, consumer products, financial services, medical products, semiconductors and more.
4. Bain & Company
Bain & Company is a global consultancy firm that works across 65 cities in 40 countries. The firm, launched in 1973, offers a wide range of consultancy services to help businesses reach their goals.
The company’s Sales Compensation Booster can help businesses reduce their costs by 5-10%. In addition to sales compensation consulting, the firm also offers consultancy services for the following:
- Sales and marketing
- Customer experience
- Sustainability and responsibility
Bain & Company sets itself apart by offering a wide range of services and working with organizations in over a dozen industries across the world.
The Paradox Compensation Advisors was founded by Billie Day and Marsha Cameron. Together, they offer five decades of combined experience. Experienced consultant David Snow is also part of the firm’s small team.
The Dallas-based firm offers a number of services, but what sets them apart is their “Compensation Co-Sourcing” subscription. This web-based service allows Paradox to support their clients’ compensation business processes, saving them time and money in the process.
Along with this subscription service, Paradox also offers:
- Compensation program design and total rewards strategy, including the design and implementation of base salary structures and incentives (short-term and long-term).
- Regulatory and implementation support. Paradox helps clients navigate governance policies and regulatory compliance.
- Market analysis. Clients get access to competitive trends to ensure they’re valuing their talent properly.
Paradox aims to provide clients with a “big firm” experience without the extraordinary overhead.
The VisionLink Advisory Group is headquartered in Lake Forest, CA, but they also have an office in Highland, UT. Founded in 1996, the firm has a team of eight consultants focusing on growth strategy, design implementation and rewards management.
VisionLink’s services include:
- Incentive plan design, including annual and long-term reward plans
- Total rewards design, including assessment, design and reinforcement
Additionally, VisionLink offers its own tool, called BonusRight, that helps companies create, communicate and manage their bonus plans on one platform.
VisionLink works with private companies. Their client list includes Ken’s, Griffin Capital, First Missouri State Bank Oakly, Tillys, Patagonia and other well-established brands.
7. JER HR Group
JER HR Group is a consulting firm founded in 1990 with offices across the U.S., including Raleigh, Philadelphia, Fayetteville, Columbia, West Des Moines and New York.
Their sales compensation consulting services include:
- Compensation plan design and monitoring
- Total rewards strategy
- Incentive compensation design
- Custom compensation surveys and market pricing
- Competency model
- Pay equity analysis
- Salary administration design
In addition to sales compensation consulting, the firm also offers:
- HR consulting
- Organizational development services
JER HR is a large firm with several experienced consultants and an impressive executive team.
It’s that time of year to talk #compensation & how the incentive mix impacts sales behavior, incentive accelerators & decelerators, and how sales roles & channels impact your sales results. Learn how a good #salescomp plan drives desired behaviors. https://t.co/kA3Q2mz2ww
— JER HR Group (@jerhrgroup) December 11, 2023
8. Westminster Associates
Westminster Associates was founded in 1983 and is based in Wrentham, MA. At the time, the firm specialized in the training of compensation professionals. Westminster Associates has since evolved into a full-service HR and compensation consulting firm.
The small firm’s services include:
- Compensation strategy development
- Pay program design
- Performance management
- Pay surveys
- Alternative reward strategies
- Equity-based incentive plans
- Retention and culture audits
- Team-based pay plans
- Competency identification
- Competency and role evaluation plans
- Outsourced HR services
Westminster Associates takes a client-centric approach to their services. They aim to build strong client relationships and serve as a strategic partner. The firm’s HR consulting services allows them to help clients in many ways.
9. POE Group
The POE Group has been offering independent compensation consulting services since 1997. Based in Lake Lure, NC, the small firm works with a wide range of clients, from small businesses to Fortune 1000 companies.
The firm’s compensation consulting services include:
- Sales compensation plan evaluation
- Job design and responsibilities alignment
- Sales compensation plan design
- Implementation and communication
The POE Group works closely with clients to ensure that the implementation of new compensation plans goes as smoothly as possible.
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The TLDR on Choosing your Next Sales Compensation Consulting Firm in 2024:
Sales compensation consulting firms can help your business implement effective compensation plans that drive results and motivate your sales team, especially in 2024! Designing and implementing compensation plans can be very tough. An experienced sales compensation consultant can help you through the process and make sure that your compensation plans are competitive and effective.