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Developing a Sales Compensation Plan in Tough Times



Developing a Sales Compensation Plan in Tough Times
   

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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About the Author


Barry Maher
(Visit Barry's Website)
Barry Maher is a leading writer, speaker, trainer and motivator on sales, leadership, management and communication. He's appeared on the Today Show, NBC Nightly News, MSNBC and is frequently featured in publications like USA Today, The New York Times, The Wall Street Journal, the London Times and Business Week. Selling Power magazine declared, "To his powerful and famous clients, Barry Maher is simply the best sales trainer in the business." His client list includes ABC, AT&T, Budget Rent a Car, Blue Cross, Fox Cable Television, Johnson & Johnson, Merck, the National Lottery of Ireland, Verizon and innumerable smaller companies and associations. A keynote speaker and a workshop leader, Maher is also the author of "Filling the Glass," which was cited by Today's Librarian magazine as "[One of] The Seven Essential Popular Business Books. His other books include "No Lie: Truth Is the Ultimate Sales Tool," "The Prentice Hall Marketing Yearbook," the niche book "Getting the Most from Your Yellow Pages Advertising" and even the cult classic fantasy novel, "Legend." Contact him and or sign up for his free newsletter at www.barrymaher .com.
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