Why It’s Important to Test New Commission Rules

by | Jan 26, 2021

As a sales organization evolves, so should its sales commission plan. Before taking a red pen to incentives currently in place, it’s important to know the new rules work as intended. Luckily, at Core Commissions, we’ve got a solution. It helps anyone test out new commission calculations without messing up the production cycle.

When changes are made to sales commission plans, they need to be tested before they’re implemented.

Why Change Commissions?

Organizations choose to make changes to a sales compensation or commission plan for a number of reasons. Perhaps the current plan needs adjusting in the face of external challenges, like a global pandemic. Management may want to implement additional incentive programs to motivate teams while meeting the bottom line. Sometimes a team simply revises its commission plan on a yearly basis or in response to underperforming sales results.

Generally, the changes get mocked up and sent down from executives who don’t have experience in commission management. In those cases, the way the changes actually develop and impact teams may be hard to predict. Changes that look good on paper may not always play out the way that sales management intends.

That’s why commission managers, or whoever handles commissions, need to work through proposed modifications to determine the practical application.

Why Test New Commission Rules?

  • Ensure Calculations Work: Apply the proposed rules to real data and make sure that the results fall within expectations before launching them.
  • Compare to Existing Results: Try out the new rules then use that information to compare results to the current plan. This helps determine if a change is needed or taking the team in a positive direction.
  • Prevent Mistakes: When administrators have the opportunity to dig into the new rules before actually launching them, it helps familiarize them with the new process. It’s almost as if the users get a chance to train on the new plan before jumping right in. The process prevents or at least minimizes mistakes and errors in the initial launch.
  • Improve on the Concept: Once an administrator gets a chance to work through new rules, they can evaluate the results. If they’re not seeing what they expected, they have the opportunity to suggest improvements or slight adjustments. With each alteration, the administrator can run another test before finalizing and launching a new plan.
  • Collect Real Results: A good test of new commission rules will also equip an organization with real results based on actual data. This helps them set expectations as far as goals and objectives for the entire company.
  • Avoid Interrupting Production Cycles: Even while changes are being mulled over, sales teams still need to get paid. So when administrators start testing new rules, they do it outside of the active commission environment. This limits any risk of mistakenly altered data during the process.
  • Demonstrate How New Rules Work for Teams: If a test is thorough, it can give management and administrators examples to provide to commissioned employees. This will help communicate commission changes and showcase how those changes will impact their pay.

How Do You Test Commission Rules?

To effectively analyze a new commission method, commission managers need to apply them to real data. However, they need to do it without interfering with current production cycles. Those administrators could pull data from one excel document to another, cutting and pasting or even duplicating. This risks errors or even confusion between existing documents and new ones. The evaluator needs a safe space to experiment without causing chaos.

This is where Core’s What-If Sandbox comes in. The feature allows manipulation and calculation of real data without changing it in the production cycle. Administrators use the tool to effectively determine if commission rules provide sufficient incentives to payees while fitting within budget. It reviews at-target results as well as those falling either above or below target. Users have the opportunity to compare the output for different options side-by-side graphically in our interactive analytics module. They can even throw in additional scenarios to really become familiar with the workings of the new plan. The sandbox “what if” capability is included in all Core packages.

If your organization is looking for a way to not only automate complex commissions but to test out changes before implementing them, Core Commissions will work for you. Ask us for more information or request a free demo and we’ll walk you through this feature and all our other tools as well.

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