Developing a Sales Compensation Plan in Tough Times
Developing a Sales Compensation Plan in Tough Times
1. How easy is it to hire and retain the type of salespeople we need? Is sales force turnover too high or too low? Can people make the kind of living we want our people to make? On the other hand, are they making so much money they never leave and our sales force is loosing that lean and hungry look?
2. How are or sales figures? Do we need to provide more monetary incentive to optimize sales in this environment?
3. Is the compensation system generating the behaviors we most wish to encourage? Are we selling the most profitable products to the most profitable customers? Are we getting the appropriate level of customer satisfaction?
4. Will the compensation system we have (or the one we’re considering) also be appropriate once sales rebound? This is a vital question that’s almost never asked. If things turn around and sales people are suddenly making huge amounts of money, the company could be left with two poor alternatives. Either let them make far more than is necessary to generate optimal answers to questions 1 through 3, or else change the compensation plan and be seen as “taking money out of our pockets, ” possibly crushing morale.
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Copyright 2006, Barry Maher, Barry Maher & Associates
This article is adapted from "No Lie: Truth Is the Ultimate Sales Tool." Barry Maher
consults, speaks and writes on sales, sales management, leadership and communications.
Contact him and/or sign up for his free email newsletter at www.barrymaher.com
Developing a Sales Compensation Plan in Tough Times - To learn more about this author, visit Barry Maher's Website.
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When times are tough, companies often start tinkering with their sales compensation plan. Here are four key questions they need to answer to develop a plan that will motivate the sales force without creating more problems than it solves.
1. How easy is it to hire and retain the type of salespeople we need? Is sales force turnover too high or too low? Can people make the kind of living we want our people to make? On the other hand, are they making so much money they never leave and our sales force is loosing that lean and hungry look?
2. How are or sales figures? Do we need to provide more monetary incentive to optimize sales in this environment?
3. Is the compensation system generating the behaviors we most wish to encourage? Are we selling the most profitable products to the most profitable customers? Are we getting the appropriate level of customer satisfaction?
4. Will the compensation system we have (or the one we’re considering) also be appropriate once sales rebound? This is a vital question that’s almost never asked. If things turn around and sales people are suddenly making huge amounts of money, the company could be left with two poor alternatives. Either let them make far more than is necessary to generate optimal answers to questions 1 through 3, or else change the compensation plan and be seen as “taking money out of our pockets, ” possibly crushing morale.
# # #
Copyright 2006, Barry Maher, Barry Maher & Associates
This article is adapted from "No Lie: Truth Is the Ultimate Sales Tool." Barry Maher
consults, speaks and writes on sales, sales management, leadership and communications.
Contact him and/or sign up for his free email newsletter at www.barrymaher.com
Developing a Sales Compensation Plan in Tough Times - To learn more about this author, visit Barry Maher's Website.
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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