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Plan design principles
First Step of Sales Comp Planning: Define Roles
WorldatWork Sales Compensation Quarterly, Q3 2008 — “Why isn’t my incentive plan getting me the growth I need” is a common lament from the the VP of Sales to the President to the CEO. One of the main reasons may not have anything to do with your compensation plans, but may be more about the way your sales roles are defined…
There is a lot of press now about curbing incentives. Do incentives actually work?
A well designed incentive usually requires (1) a performance standard (some say quota, others say productivity expectation or goal); and (2) a good tracking and reporting system (have to keep up with it if we’re going to pay on it).
What do you consider to be the key principles are important in considering role-based incentive plans?
Role-based incentive plans are used to motivate and reward those who have a direct effect on company financial results, in both sales and non-sales roles. Keep these key principles in mind when designing a role-based plan…
What are the advantages and disadvantages for paying for activities vs. paying for results?
In designing a sales comp plan, we strongly recommend paying for financially measurable results (as opposed to activities). Sales compensation, to be really motivating, generally involves significant cash and upside…
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…
A new commission plan for Customer Service Reps
Typically, commission programs are used for revenue generating roles. If your Customer Service Representatives are in a position to influence the customers to buy more, to retain them, to cross-sell them…
Account Managers vs. Business Developers: Key comp plan differences
Have you decided it’s time to specialize in your sales team? One of the first ways companies do this is by separating the Account Management role from the Business Development role. If you’re thinking of this approach, and if you have a reasonably short sales cycle so that your business developers close at least several new customers per month on average, these tips are for you.
Basic principles guide sales comp design
In comp design, the possibilities are endless, but the principles are few…