Leveraging Data and Building Credibility in Sales Compensation, with Experts

Josh Miller is a highly accomplished sales compensation professional with an impressive track record of over two decades in the field. He brings an experienced point-of-view to the show and has a profound understanding of the intricate dynamics that drive sales success. He is currently the Head of Sales Compensation at CVS Health, where he manages compensation structures for thousands of sales reps.

In a conversation with Nabeil Alazzam, Josh explores the significance of leveraging data in your decision-making processes, building credibility and alignment with senior leadership teams, their predictions for the future of sales compensation and the role of variable compensation, and much more.

Listen to this episode of The Sales Compensation Show to learn:

• Why you should back all of your decisions with data
• How to build credibility and align with leadership teams
• The future role of variable compensation plans

Three key takeaways:

#1: Make decisions based on data

Leveraging data in sales compensation is essential for accurately measuring performance, motivating sales teams, and ensuring fairness. By analyzing sales data, companies can refine strategies, minimize risks, and attract top talent. Data-driven compensation plans offer clear goals and rewards tied to performance metrics, enhancing employee engagement and retention.

Josh emphasized the importance of data in strategic decision-making throughout the podcast. He highlighted its ability to validate hypotheses, influence stakeholders, and bolster arguments at every organizational level. Nabeil agreed, adding how data elevates credibility, eliminates doubts, and reduces perceptions of inexperience or lack of authority.

"The more data you can arm yourself with in [sales compensation plan] design discussions, the better." - Nabeil Alazzam, Forma.ai

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Josh and Nabeil delved into how data brings clarity and insight to complex issues such as identifying sales trends, assessing performance metrics, and evaluating compensation plans. By analyzing data-driven insights, organizations gain a deeper understanding of their sales processes, customer behaviors, and market dynamics, facilitating more informed and strategic decision-making.

Additionally, Josh emphasized the importance of building credibility through data, both inside and outside the organization. By using data to support recommendations, individuals can establish themselves as trusted advisors and experts in their field. Nabeil demonstrated how insights supported by data can influence decision-makers and drive significant strategic improvements. This focus on credibility highlights how data builds trust and confidence among stakeholders, fostering collaboration and driving success.

#2: Build credibility and align with leadership

Building credibility and aligning with leadership are pivotal aspects of navigating sales compensation. Josh discusses the importance of establishing credibility, particularly when advocating for changes. He highlights how credibility is bolstered through various means, such as leveraging data, providing internal examples, and aligning with organizational goals. By showcasing expertise and a deep understanding of the subject matter, sales comp professionals can earn the trust and respect of their leadership teams.

Moreover, Josh mentions the importance of aligning with leadership and key stakeholders. He stresses how understanding the perspectives and priorities of decision-makers enables individuals to tailor their proposals effectively. By aligning with organizational goals, individuals can gain buy-in and support for their plans. This alignment fosters collaboration and ensures that proposed changes align with broader strategic objectives.

Effective communication plays a key role in building credibility and aligning with leadership. Clearly articulating proposals and using data-driven insights helps convey expertise and gain trust. Open dialogue and receptiveness to feedback also demonstrate collaboration and a willingness to adapt to organizational needs. Overall, Josh and Nabeil emphasize how building credibility and aligning with leadership are essential strategies for driving positive change and achieving success in sales compensation.

#3: Variable compensation will remain viable

Discussing the future of sales compensation and the concept of value-based compensation revealed insights into the evolving landscape of incentivizing sales professionals. Josh and Nabeil underscored the enduring relevance of variable compensation, driven by the innate motivation of salespeople to excel financially and competitively. This aligns with historical precedents dating back thousands of years, suggesting a fundamental aspect of human nature that persists across generations.

Nabeil delves into the potential shifts in sales roles and the impact of technology on sales processes. While acknowledging the possibility of changes in sales, the consensus remains that the fundamental principles of incentivizing sales performance will endure. This suggests that regardless of future developments, the need to reward high performers and incentivize value creation will remain paramount.

"Salespeople are highly financially motivated. As long as that’s the case, there’s an important role for variable compensation to play." - Josh Miller, CVS Health

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The concept of value-based compensation emerges as a natural extension of this discussion, emphasizing the importance of aligning compensation with the value generated by sales professionals.

This approach recognizes that not all sales activities are equal in their impact and seeks to reward those that contribute the most value to the organization. By incorporating metrics beyond simple revenue figures, such as deal longevity or customer satisfaction, value-based compensation aims to create a more nuanced and equitable reward system that reflects the true impact of sales efforts.

Overall, Josh and Nabeil highlight the ongoing evolution of sales compensation practices and the importance of aligning incentives with organizational goals and value creation.

The Sales Compensation Show is brought to you by Forma.ai, the world’s first sales compensation platform designed around the agile methodology of CompOps. Find us by searching “sales compensation” on Apple Podcasts, Spotify, YouTube, and other streaming services.

To learn more about how Forma.ai can help design, execute, and optimize your sales comp strategy, start a conversation with us today.