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Does Changing Compensation Increase Sales?
| Guest post by: Dave Kurlan |
Article Overview: A conference attendee asked how she could change the compensation for her highly paid, salaried producers, in order to provide the incentive to sell more. Read this article to learn the answer to this question.
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Free Download - Sales Courage and Resilience By Dave Kurlan |
Does Changing Compensation Increase Sales?
Back on Wednesday, I was part of a panel, along with Lee Salz, author of How to Soar Despite Your Dodo Sales Manager and Mike McCue, editor in chief of Sales & Marketing Management Magazine, at the Incentive Marketing Association conference in Boston.
One of the attendees asked how she could change the compensation for her highly paid, salaried producers, in order to provide the incentive to sell more.
If that's all it takes, getting salespeople to sell more would be easy! One of the many areas we analyze when we evaluate sales organizations is to what degree the salespeople are motivated to earn more money. In a sales force like hers, we would likely find that the salespeople are not very motivated to earn more money and would likely rebel if the compensation were changed to pay less in salary and more in commissions. There are two important points to understand:
1. If a higher risk - higher reward plan would excite them, they wouldn't be working for this company in the first place.
2. There is an enormous difference between wanting more money ("pay me more") and being motivated to go out and earn more (what must I do to earn another $50,000 this year?")
It all goes back to hiring the right people in the first place. Salespeople who are looking for security will never be your top producers.
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Article Tags: attendees, boston, commissions, enormous difference, incentive marketing association, marketing management magazine, mike mccue, money, reward plan, risk, salary, sales marketing, sales organizations, salespeople, salz, top producers
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I am noticing that many of the posts in the Sales/Marketing section deal with online marketing, SEM and and SEO and Affiliates. I was wondering if it might be a good idea to separate that section into two; 1) Online Sales and Marketing; 2) Traditional Sales and Marketing[/quote:31w9r2iz]
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2007 Goals
- My yearly goals for December 2007:
1. Add 10-15 new "ideal" clients to our client roster
2. Increase revenues by $500,000
3. Average at least 1 paid speaking engagement per month.
Compensating your Advisory Board
- Hey! Happy Monday.
With regard to stock options, I am of the belief that 1-2% is appropriate historically. Personally, I would be open to considering any amount based on the level of expertise and time they are willing to give me. Although I did have one gentleman ask for 20%. I told him no.
I have 7 members on my advisory board currently and I am starting to build one for my women's leadership business. I have thought about adding it to the existing 'agenda' but I need different skills and resources.
Compensation varies and is kept very confidential at our board. Everyone knows they have 'skin' in the game per say, and I am very careful not to abuse that trust.
For one thing, sometimes I find myself thinking that a more formally 'paid' member should be doing more legwork....that kind of stuff.
Its a bit challenging but so far the dynamics work.
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