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Financial implications
Paying more than one person for a sale – When is it appropriate, and does it cost too much?
The practice of paying more than one person for the same sale is a common one, and one of the situations in which we most often find it is in Inside/Field sales teams. It is totally appropriate and makes sense to pay two people for a sale in either of the following situations…
What is the ROI on a sales compensation plans design change effort?
A sales compensation design effort yields results in three areas: revenue increase, margin improvement, cost of compensation in relation to sales productivity. Be sure you know why you are changing your plans and what you hope to accomplish, and your plan design will be much more likely to yield improved results.
What percentage of annual gross revenue should come from new business?
I believe your question is about sales roles with a new business focus when the acquired business generally turns into a long-term annuity type relationship. Examples from my experience include…
What are the advantages of using a non-commission sales comp plan in mature companies?
Mature companies with successful business strategies and an efficient go-to-market approach should, over time, see sales person pay go up with the labor market while sales productivity goes up faster. This means that comp % sales goes down…
How do you know what the right commission rate is for your industry and area of the country?
Answering this question is harder than it looks. The answer depends on the nature of the selling role, the level of maturity of the business, and the cost structure of the company.
Are our commission rates too high?
I was asked recently about a sales force that has been on a simple commission plan now for years — 50/50 split of deal profit between the sales person and the company. However, in recent years they have been hiring less technically skilled sales people…
Appropriate cost of the sales force
It depends very much on your industry, company stage and basic competitive strategy (technology driven, operations driven, market driven). The right place to focus is on the value of the sales force and how that relates to the cost.