5 expert sales compensation plan design tips for 2025

Designing a sales compensation plan that drives performance is a balancing act, puzzle, and race against the clock all at once.  

In the final quarter of the year, revenue and sales operations leaders are deep in the thick of strategizing next year’s plans. With the Sales Kickoff looming ahead, the timing has to be right, the metrics clear, and the incentives powerful enough to inspire sales reps to bring their best.

But creating a plan that motivates, rewards the right behaviors, and that incorporates data-driven learnings from the prior fiscals can feel anything but straightforward.  

In fact, there are a number if reasons many sales comp plans are delivered too late.

You're grappling with evolving market dynamics, new sales roles, and rising expectations. Plus there’s pressure from executives who want assurances the plan will drive revenue, finance needs a predictable, viable model—and sales reps expect fairness and clarity.

With the stakes so high, we wanted to supply insights from our recent sales planning Masterclass webinar to make the process a little less daunting and a lot more strategic.

In this value-packed session sales compensation plan experts Melissa Fenner, Senior Director, Sales Compensation and Incubation Strategy at Docusign, Leo Rocha Sr. Director, Compensation at CHG Healthcare, and Nabeil Alazzam CEO of Forma.ai shared practical insights on creating a robust and effective sales compensation plan for 2025.  

Let’s dive into the key areas of focus they spoke to.

1. Prioritize early, data-driven planning (paired with a consistent chief-success metric)

To start, Melissa Fenner sagely advised to begin thinking about sales planning as a cycle you kickoff well ahead of the new fiscal year (instead of a strictly linear process). According to the panel discussion, everyone was in agreement you can begin planning for the following year as early as Q1! It's never too early.

At Docusign, Melissa and team consider Q1 as just the start of planning, where they establish and align on the consistent success metrics that will be used to evaluate whether sales comp plans are driving the right behaviors for the next fiscal year.  

For example, to determine the effectiveness of sales quotas and targets, their compensation team collectively decided to track the ketosis of attainment metric quarter over quarter (or the healthy spread of distribution) as their chief success metric.  

By focusing on quota attainment distribution as a North Star without interruption, the team was better able to identify patterns and refine targets in real-time. A steady heart-beat metric helped them make especially confident changes for FY26, plus avoid excess noise even amid changes to leadership.

Here's a clip of how Melissa thinks about it:

Share progress updates regularly, engaging all key stakeholders in planning

In another bid for an efficient planning process, Leo Rocha stressed the importance of cross-functional alignment, from your executive sponsors to field sales teams.  

You need to create clear feedback loops across the organization (considering things like sentiment surveys for your reps) and establish a cadence where you're sharing progress updates regularly. This helps build ownership and—as Leo shares—eliminates surprises.  

This type of alignment keeps sales teams on track and informed, provides transparency for leadership on your timeline and intentions, and enables real-time course corrections based on the latest data.  

Importantly, a strong information cadence from those owning compensation planning also helps the field feel as though they're intentionally being brought in on the company strategy as partners vs. just receiving information from others in a just-in-time manner:

2. Structure a precise pay mix based on role responsibilities

Moving into details of the comp plan, a big fan of the pay mix discussion, Leo advocated the importance of getting this aspect of your planning right (it demands particular attention).  

Critically, you need to align pay mix with role type for maximum impact. Not all roles benefit from the same compensation structure, so you must consider role-specific strategies.  

For example, Leo highlighted the need for a more aggressive variable pay mix for Hunter roles driving new business, while Customer Success roles might be weighted more toward base pay to encourage relationship-building. Tailoring pay mix to fit role objectives ultimately drives focus and performance across your sales engine.

On this, Leo recommends leveraging data tools (industry benchmarks) for pay mix precision, but also using a positioning tool that assesses attributes by role, industry, and geographic region, allowing for a data-driven approach to compensation design.  

In particular, Leo's a fan of Mark Donollo's Pay Mix positioning tool:

Overall, by aligning pay mix with job responsibilities and ensuring yours reflects local market dynamics (some geographies are more risk averse), you can reduce attrition risk while enhancing performance.

3. Avoid common rollout delays by integrating compensation, territory, and quota planning and sharing guidelines

On common mistakes leading to rollout delays, Melissa shared that many teams fail to integrate comp, territory, and quota planning early in the process all together. Because territories, quotas, and incentives are often planned in silos, this ends up causing delayed rollouts.

To combat this, she recommends establishing planning guardrails across these three teams (the three aspects of a three-legged stool) to reduce the need for mid-cycle adjustments, resulting in a smoother, faster rollout.

Further, you can work to assign ownership and accountability for each component of planning best as possible—though this may work best if you have tools in place that help automate a good deal of the manual work involved.

Clear ownership is critical for meeting compensation goals on time. Nabeil explained how defining accountability across finance, HR, sales ops, and customer success streamlines the planning process.  

By assigning accountability to each stakeholder and involving them early enough, you can enhance both efficiency and accountability.

4. Incentivize the right sales behaviors via targeted metrics

‍Highly aligned to projected sales compensation trends for 2025, wherein there's demand for more granular sales comp performance metrics, plus accounting for the entire customer lifecycle—Melissa shared that SaaS companies are currently very focused on the importance of retention.

In a pooled metric this year, Melissa's team is looking to balance growth with retention and giving each equal weight in the comp plan. This to ultimately help reps focus on maximizing customer value rather than prioritizing net new sales alone. This focus beyond net new growth encourages long-term relationship-building and revenue stability, ideal for subscription-based models:

Further, with respect to activity-based incentives (ABIs)—these are gaining mindshare with sales and revenue operations leaders, though Melissa, Leo, and Nabeil spoke to their historical difficulties to implement.

In lieu of the total transparency required for activity-based metrics, Melissa's team is currently looking at the quality of engagements. I.e. is the team closing deals with profitability in mind, while balancing the customer experience?

As a stepping stone to activity-based metrics, Melissa shared their organization looks at overlaying adherence to the right type of pricing structure (which can dial up a seller's payout—or, if a deal is not aligned to the customer's end goals, the payout may not be as lucrative).  

On granular metrics, Melissa noted that their compensation team is trying to outlaw team-based goals and management by objectives (MBOs). This to really drive individual behaviors.

As Nabeil highlighted if you absolutely must run a team-based incentive, he'd consider them as an interim solution if:

• it might actually produce a better outcome for the customer experience and thereby your profitability on the whole, or

• There's a go-to-market strategy shift where data has not caught up, (there's some element of the back-office systems and operations where it's difficult to give transparency to the selling team as fast as possible).

But generally, Nabeil also advised against team-based incentives where you can help it, as they make it very difficult to truly pay for performance.  

5. Continually optimize your compensation plan mid-cycle with pilot programs or A/B tests

When it comes to sales compensation effectiveness, you can run various analyses, including Monte-Carlo simulation. However, when you don't necessarily have the time or resources required for this, our panelists advocated the ability to implement a pilot program to test new compensation models. This allows you to gather real feedback and address gaps before rolling out changes widely.  

Melissa shared how Docusign’s two six-month pilot programs provided critical feedback that helped refine their strategy for full-scale implementation. She also gave great insight into the eligibility criteria and how they considered this for the pilot group.

Similar to piloting your program with a subset group, Leo highlighted the value of A/B testing to understand which plan elements drive specific behavior changes (which gives more granular insights than simply doing effectiveness testing analyses alone):

Beyond A/B tests, you can also start to run sentiment surveys mid-year with your sales team to collect their input on the plans' effectiveness and spot patterns year over year.

Here are Leo's specific tips for running these effectively to collect qualitative data:

On emerging sales compensation trends our experts see coming for 2025

Finally we asked all of our sales performance strategists to weigh in on what emerging trends they're noticing in the space, to inform what to pay attention to in 2025.  

Echoing other experts we've spoken to, Leo noted the rise of the individualization of comp plans—or the idea of reps being able to choose tailored elements of their compensation plans. Essentially selecting from a menu of options that are ~20% component of the comp plan. All of the proffered options drive the needs of the business or bottom line needs, but delivering them in this choose-your-own adventure way grants a sense of full ownership.

Additionally, Melissa accentuated the importance of multipliers or kickers being used to uphold a customer-first mentality—especially amid the move to different pricing models. That is, how might businesses balance and incentivize the right selling behaviors no matter if one is working with a consumption-based subscription deal or a seat-based deal?

And lastly, Nabeil noted the trend of AI disrupting the sales space over the next five to ten years. From roles that will inevitably change, or even how we consider the advantage every sales rep will have in their pockets thanks to AI support.  

Here's the clip: