Sales Compensation

30 Sep

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Implementing a well-designed sales compensation plan is foundational for sales growth. When compensation is designed to reward sales reps to focus on achieving company goals, the bottom line results will follow. A new sales compensation program can address several sales issues in your company’s strategy to grow your market share. But before you launch your new sales compensation plan and introduce it to your sales team, it’s vital that you examine its strength as a growth strategy.

How do you convert your sales compensation plan into a growth strategy? Here are three simple tips to get the most out of your compensation budget and grow sales:

1. Compensation plans should align with your strategic goals.

Clearly written company goals approved by senior management, which are often lacking, are the first requirement to formulate your compensation plan. If you want to hit the company strategic goals you need to start with a plan that rewards and drives the kind of sales activities and behaviors required to support the company’s goals.

2. Sales incentives should be designed to motivate your team.

Sales incentives that are not clearly measurable, timely, enticing and easy to understand, will not keep your sales reps performing at their peak. Instead, your mediocre sales compensation plan will foster a status-quo atmosphere where sales reps are satisfied with doing just enough to keep their jobs and pay their bills. A sales team that is not highly motivated will bring in mediocre numbers and will not drive company growth.

3. Compensate fairly for the different roles on your sales team.

If you create a sales compensation plan that spreads commission percentages out equally for account managers who manage your existing accounts and sales reps focused on new business development, you risk creating an environment of resentment as you will be discouraging your top performing staff focused on bringing in new business.

Why should they bother to go through the extra stress, time and effort it takes to hunt prospects on the front line if their account manager counterparts are getting paid the same percentage for working 9 to 5 renewing orders and doing customer service? You’ve got to reward the skill set and characteristics that are unique to your top sales performers by offering them compensation percentages above and beyond the account managers. This will keep the hunters motivated to bring in new business and leave the customer service and account management functions to their less motivated counterparts.

Yes, your compensation plan can easily become a growth strategy. When you have the proper sales incentives in place, acknowledging company goals and the difference between various sales roles, your plan emphasizes the goals and reward productive sales. If you consider your sales compensation plan from these perspectives, you will be able to create a sales culture that is effective and committed to growth – a sales growth strategy.

Thank you to my guest blogger this week –

Gordon Bye is a managing partner and the President of Sales Growth Specialist. With over 30 years experience in sales and sales management, his specialty at SGS is recruiting top sales talent which often includes a re-design the compensation plan to give companies the ability to attract and motivate a winning sales team. His latest e-book, Compensation Compass. details a common sense approach to effective sales compensation.

It’s time to grow faster.

~Drew Schmitz

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drew@blueoctopusllc.com

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