If you’re stuck wrangling spreadsheets or trying to make one-size-fits-all plans work across wildly different teams, this guide’s for you. Custom compensation plans sound great in theory, but actually making them work in Varicent is another story. I’ll walk you through how to build plans for different business units so they fit your real-world needs—without getting lost in endless configuration screens or vendor jargon.
Why bother with custom plans?
Not every team’s motivated by the same carrot. Sales, customer success, and channel partners all have different goals and pain points. If you try to shove everyone into the same comp plan, you’ll get a mess: unhappy reps, shadow spreadsheets, and confusion about what actually drives results.
Varicent gives you the tools to build flexible, targeted comp plans. The trick is knowing which features matter and which to ignore, so you don’t drown in options.
Step 1: Map out what each business unit actually needs
Before you ever log into Varicent, get clear on:
- Who’s in each business unit? (Think teams, not just departments.)
- What’s their main goal? Revenue, renewals, cross-sells? Write it down.
- How do they measure success? Quota, margin, activities, something else?
- What motivates them? Money, recognition, career growth—be honest.
Pro tip: Talk to managers and a few reps. You’ll hear what’s actually driving (or killing) performance, not just what’s on a slide deck.
Don’t overcomplicate this. You just need enough detail to know how (and why) each comp plan should be different.
Step 2: Outline your plan architecture
Think of this as your blueprint. You’ll save yourself a ton of rework if you sketch it out before clicking around in Varicent.
- Which components are shared? (e.g., base salary, bonus pools)
- What’s unique? (e.g., accelerators for new business, spiffs for renewals)
- Who’s eligible for what? Sometimes titles and roles are messy. Don’t assume HR has it right.
If you’re building three plans for three business units, keep them as simple and modular as possible. Overly clever setups become nightmares to maintain.
Ignore: Tempting Varicent “out-of-the-box” templates that don’t fit your business. You’ll spend more time bending your process to the tool than the other way around.
Step 3: Set up business units and participant groups in Varicent
Now you’re ready to log in. Start by defining your business units and grouping participants correctly. In Varicent, these usually map to “organizations,” “teams,” or custom fields.
- Go to Participants > Organizations. Set up each business unit as its own org.
- Use Participant Groups for sub-teams (e.g., inside sales vs. field sales).
- Double-check: Are you assigning people based on how they’re actually managed, or just copying your HRIS? Reality on the ground often differs.
What works: Clear, mutually exclusive groups. No one likes a rep who “belongs” to three different plans—unless you want payroll headaches.
Step 4: Build the compensation plan components
Here’s where most folks get bogged down. Varicent lets you mix and match:
- Fixed pay: Base, salary, guarantee
- Variable pay: Commissions, bonuses, spiffs, MBOs (management by objectives)
- Accelerators: Higher rates above target
- Kickers: Extra rewards for specific achievements
For each business unit, create only what you need. If a plan doesn’t use spiffs, skip it.
How to do it in Varicent:
- Go to Plans > Compensation Components.
- Create the fixed and variable elements for each business unit.
- Name everything clearly. “Q2 New Biz Accelerator - Enterprise” is better than “Plan 2 Bonus.”
- Attach eligibility rules—who gets what, and when.
Pro tip: Use formulas or rules for things like quota attainment, margin, or special incentives. But keep them simple. The more layers, the harder it is to debug when things go sideways.
What to ignore: Fancy features you don’t understand or don’t need. Varicent’s documentation is full of possibilities, but most companies only use 20% of them.
Step 5: Configure crediting and data sources
Nothing kills trust in a comp plan faster than bad data. You need to nail:
- Crediting rules: Who gets paid for which deals? Split credit, territory overlays, team selling—get it in writing.
- Data feeds: Where’s your sales data coming from? CRM, ERP, manual uploads? Each business unit might pull from different sources.
- Timing: When does data lock? If you change a deal after the comp period closes, you’ll have a mutiny.
In Varicent:
- Set up Data Sources for each system feeding comp data.
- Map fields carefully. “Account Executive” in Salesforce might be “AE” elsewhere.
- Test with real data from each business unit. Don’t assume the mappings work—check edge cases.
What works: Document every assumption. If a deal gets split, who approves it? If someone transfers teams mid-quarter, what happens?
Ignore: Overcomplicated crediting hierarchies unless your business truly needs them. More rules mean more confusion.
Step 6: Build and assign compensation plans
Now, you pull it all together:
- Go to Plans > Compensation Plans.
- For each business unit, assemble the right components and rules into a plan.
- Assign participants or groups to each plan. Double-check for overlap.
- Set effective dates—so you don’t accidentally pay someone under two plans at once.
Pro tip: Use the “Preview” or “Test” features. Run a few sample calculations with real data before anything goes live.
What works: Starting with a pilot group. Roll out to one business unit, fix what breaks, then scale.
Ignore: Launching everything at once. It’s tempting, but you’ll end up fighting fires all month.
Step 7: Test, communicate, and support
Even the best plan fails if no one trusts it—or knows how it works.
- Test thoroughly: Use edge cases. What if someone closes a massive deal? What if a deal is split across two units?
- Communicate clearly: Send plain-language explanations (no math PhDs required). Spell out what’s changed and why.
- Support queries: Set up a feedback loop so reps can ask questions and flag issues.
What works: Regular check-ins with business unit leads for the first quarter. You’ll surface problems faster than from a help desk ticket queue.
Ignore: Glossy rollout decks with no real info. People care about their pay, not your PowerPoint skills.
Pitfalls to watch for
- Overly complex plans: If you need a flowchart to explain it, you’re overdoing it.
- Manual workarounds: If you’re exporting to Excel every month, something’s broken.
- “Set and forget” mentality: Business units change. Plans should, too.
Keep it simple—and revisit often
You don’t score points for making your comp plans more complicated than your products. Start simple, launch with one business unit, and fix what breaks. Customization is great, but only if it actually helps people do their jobs better.
Iterate, listen, and keep the focus on what really drives your teams. The best comp plans don’t need a translator—they just work.