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Plan mechanics
How do we design a tiered compensation plan? And why would we want one?
A tiered plan generally involves several different payout rates at different levels of achievement. Generally the rates increase as sales productivity increases so that the reward for higher levels of sales is a greater payout rate for additional sales.
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…
When two or more people work a sale, how should credit be shared?
Especially for large or complex sales, it often takes more than one person from the sales team to close the deal. If the two people are…
When is a relative ranking plan a good idea?
Relative ranking plans work best for sales forces in which collaboration is not a key requirement for success…
Why would I pay incentives to sales reps when the overall company is not hitting its goals?
Making Your Numbers…Better Newsletter, September 2010 – Should you pay incentives to sales people if your company is not hitting its overall goals? Yes, if that incentive pay makes up more than just a token year-end bonus.
Sales Compensation 101 for the Logistics Industry
Logistics Journal, April and May 2010 – Good news and bad news: incentive plans work! So how do you design your incentive plan so you don’t end up with some unexpected consequences?
How do we design the right plan for an unpredictable year?
So many sales compensation plans depend on goals or quotas. Regardless of the type of plan you have, some kind of productivity expectation is embedded in your plans. So in a year when “expected performance” is very difficult to establish accurately, how can you manage your plans with this in mind?
Paying from first dollar for annuity business
My company is in the throes of revising the comp plan for next year and one of the most hotly debated items revolves around compensating a salesperson on all business generated from dollar one for the life of the account. Currently our firm doesn’t discriminate…
Are sales organizations utilizing more attainment thresholds in their sales compensation plan designs as the result of the current recession?
The logic for raising thresholds in this economy would be to protect profit. The logic for lowering them is that we are not nearly as confident in our quota setting accuracy in this economy…
What’s a good formula for a commission plan based on obtaining orders?
For a commission based incentive plan, based on obtaining orders/circulations of products/consumer goods in bulk, here are some suggestions about when a particular commission plan type might be most beneficial…