Tweet

Developing a Sales Compensation Plan in Tough Times

Written by: Barry Maher

Article Overview: Four key questions for 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

Related Articles
  Cultural Differences with Sales Force Evaluation
  The "100% Commissions Motivate" Myth
  Sales Compensation Guidelines
  Sales Incentive Plans Drive Sales Behaviours
  Show Me The Money - Network Marketing Compensation Plans Compared

Article Tags:



Related Forum Posts
Online Sales and Marketing vs Traditional - Hi Evan, 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
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
niche forum categories - I think Kevin just touched on the point that I was going make... and that is developing 'categories' that stick. Sales and Marketing may be too broad for example. However I can almost guarantee you that you would see many more sign-ups if you tailored a category to 'internet marketing' for newbies. I've seen this work on other forums, however, [i:1i903wkn]it can get a little frantic[/i:1i903wkn]... Fine tuning the categories, or expanding the scope should be effective. I think a lot of IM folks are surfing right on by because they're not finding what they're looking for here... Just a few thoughts: Better Blogging Developing Info Products Internet Marketing Presentation Skills More How to's Another point is... a lot of people don't know that they can benefit from participating in forums. The signature links to their site - if they have one - can / should be motivation enough to get more involved. The more internet savvy members that have signatures seem to stick around more... Don't you think?
Re: Online Sales and Marketing vs Traditional - [quote="ltrahan":31w9r2iz]Hi Evan, 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] I second the request...
Business Innovation - Hi Simon If you can finish off the Business Plan and think about your strategic direction or how you are going to use your product to convince people it's a great idea, it will set the foundation for your programming project. You see, when you are looking for funding you will need a Business Plan and Strategic Plan that will convince companies to invest into your new idea. Has anyone achieved this idea before using another industry besides health and fitness that you know of? You should also design some mockups as a "preview" for your programming project. This will also help reduce your programming costs as everyone will know exactly what you want if you have detailed mockups already completed including any functionality you require. Starting mockups for websites and software applications on paper is the best way if you're not a guru in graphic editing software.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

How to Sell to the Price Driven Customer

How to Develop Your Powers of Thought.

The Pure FUN of Learning & Using NLP

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.