Create Effective RevOps Comp Plans for Business Success
As the importance of Revenue Operations is recognized to derive efficiencies and growth in the sales, marketing, and customer success functions, not many other functions gain the limelight. Therefore, RevOps compensation plans can be tantamount to the value a team adds to the organization. Unlike a traditional sales compensation plan, a RevOps plan needs to incorporate much broader responsibility and outcomes. This paper considers several design approaches to RevOps compensation plans and exposes best practices in ensuring that these plans have the desired effectiveness.
Why RevOps Compensation Matters
RevOps professionals lie at the heart of revenue generation by ensuring that all customer-facing teams work in harmony. Their work will often cut across many departments and is usually affecting the most important business metrics, such as revenue growth, retaining customers, and operational efficiency. With this strategic mandate, RevOps teams deserve to be compensated in a way that recognizes their value within the organization.
Effective RevOps compensation goes beyond rewarding employees; it drives individual performance toward meeting a company’s goals and objectives for sustainable business performance. However, the design of such a plan is more sophisticated than simply giving out sales incentives.
Consider Different Compensation Structures
Profit-Sharing Models
Profit-sharing is pretty common to compensate RevOps teams, as the rewards are directly tie into the financial performance of the business. This model involves a share of company profits assigned to a bonus pool, which is then taken and distributed among RevOps leaders regarding performance or even general company success.
It really makes for a feeling of ownership and responsibility on the part of RevOps teams, because they have all their reasons to optimize processes and drive profitability. For startups, profit-sharing might include a lesser percentage of profit, whereas larger and mature organizations can afford a higher share, so that the reward mechanism is consistent with the growth phase of the organization.
Equity-Based Compensation
Giving equity as one of the means in compensation is another method that can align RevOps professionals with the long-term success of the company. It is perhaps most common in a startup, when the allure of an equity stake is a powerful motivator. It is essential, however to ensure that the employees are well informed about equity ownership’s pros and cons because the failure rate of a startup is very high.
In this respect, equity-based compensation enables in creating a long-term commitment towards the company while aligning with the success. However, the same must be transparently communicated for a win-win situation.
Including Accelerators
These are traditionally part of compensation paid to sales, but even in case of RevOps teams, these can be utilized. This structure is typically compensation-based and has two or three well-defined performance goals within a specific period to receive rewards. For instance, if the goal of the company is to increase revenue, an accelerator can be directly tied to hitting the quarterly or annual revenue milestone.
A good way for this approach to work is with the case where RevOps is expected to deliver specific initiatives; for example, the implementation of a new system or optimization of key processes. Accelerators could motivate teams to bring about influential changes by marrying project and business goals and associated timelines with incentives.
MBO-Based Plans
Management by Objectives (MBO) plans combine incentive pay linked with the company’s critical metrics with goals specific to projects. For example, a portion of the variable compensation might be tied to overall company revenue, and the rest might be tied to successful projects—maybe those implementing a new CRM or delivering sales pipeline optimization.
In this way, RevOps teams can be motivated by not only contributing to revenue growth but also by successfully completing important projects. MBO-based plans offer a balanced approach that drives both long-term objectives and short-term project success.
Best Practices for Implementing RevOps Compensation Plans
Offering Flexibility and Choices
The best practices in designing RevOps compensation plans entail offering flexibility. Creating choice in their compensation packages would further enhance motivation and job satisfaction in RevOps leaders, as they would have the freedom to take a higher base with lower variable pay or a lower base with more variable pay. This way, employees have a stake in setting their compensation commensurate with personal goals and appetite for risk, leading to high engagement and ownership.
Aligned Company Metrics
Compensation plans aligned with the company’s key performance indicators are very important. Attaching the right incentives to the North Star metric, or any other critical business goal, means that RevOps efforts will focus on delivering the outcomes most important to the organization. Regular review and changes to the plan to accommodate new business priorities and shifts in the market go a long way in keeping everything aligned and focused on continuous improvement.
Clear Communication and Transparency
Effective communication is the heart of success for any compensation plan. All team members must fully understand how their pay is structured, connected to performance, and what rewards they could potentially realize. Transparency begets trust and provides employees an ability to easily link what they do to the reward system, which is crucial for them to remain motivated and engaged.
Conclusion
An effective RevOps compensation plan has to be thoughtfully devised, considering the distinctive contributions of RevOps teams and aligning their incentives with the goals of the business. By exploring different compensation structures—such as profit-sharing, equity-based plans, accelerators, and MBO-based plans—you can create a compensation plan that motivates RevOps professionals and drives business success. Remember to offer flexibility, align incentives with key metrics, and communicate clearly to ensure that your compensation plan supports both individual and organizational growth.
