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Should the sales force receive credit for online sales?
Whether or not a sales incentive plan should provide credit for online sales should be primarily linked to the nature of the sales role in question. Specifically, we should consider two criteria: Does the sales person meaningfully influence online sales results through the fulfillment of the primary accountabilities and responsibilities of their role? Can the …
How do we compensate for high margin and low margin sales in the same compensation plan?
It may be possible to combine the two types of sales using margin value as the measure, or it may be necessary to create two separate incentive components…
How do we compensate appropriately when the sales person is responsible for both New and Recurring business?
Three approaches that work are: (1) split the plan into New and Existing components, (2) single component goal-based plan with a goal that requires good retention/penetration and New, (3) pay on net new.
We want to pay on both revenue and margin – how do we do that?
Often in manufacturing companies, sales people influence both the volume of sales and their relative profitability, rewarding simultaneously for both puts the incentives in line with what’s best for the company.
How can I maximize the impact of the communication of the new sales compensation plan?
One rule of thumb for plan communication is to double the amount of time you used for designing the plan to the plan implementation effort. Ideally the communication begins by letting the sales force know that the plan is being reviewed to align it with the company’s changing go-to-market strategy. Examples include: More emphasis on …
We’re launching a new product – what’s the right compensation arrangement for the first year?
While putting incentives in place to reward sales people for their important contribution to the successful launch of a new product is smart, there are a lot of ways to get it wrong.
How should we build a payout table for very small goals, or goals that could go negative?
If a small business had a business plan that included an operating loss of $200,000 for the year, putting together a payout table to reward for this “success” would not work if the mechanics were communicated as a percent of the goal…
What are the key components of a sales compensation plan document?
The sales compensation plan document serves as a standard reference for sales reps, sales managers, and those who calculate the incentive payouts. Typically, the plan document includes an overview of the plan structure often with a statement of the company’s pay philosophy, a detailed description of the plan’s components with brief payout examples, the terms …
How do we move our pay mix so that there’s more in the incentive and less in the base?
We need to offer a more meaningful incentive, but our base pay levels are too high. How do we make the transition?
If a Territory Manager is a “Hunting Farmer,” How Should Their Comp Work?
While many established sales organizations use the hunter-farmer model as their sales force organization model, there are inevitably geographic territories or customer segments that do not justify both “hunters” and “farmers’…