Sales Compensation Programs

Consistent programs for compensating sales staff is sometimes as much art as it is math or management science. Over the years we consistently see two main extremes when evaluating compensation programs. To one extreme is the company that spends very little time or consideration when developing compensation programs and the other extreme is the company that creates a very complicated system that is difficult to administer and even more difficult for the sales staff to understand. There is an old saying from sales training that goes “tell me how you are going to pay me and I will tell you how I am going to work”, and our favorite is “I will pretend to work for you as much as you pretend to pay me”. Both sayings reflect the frustration on the part of many sales people and the companies they work for.

When developing sales compensation programs, we start by developing a clear understanding with management of exactly what they want their sales staff to accomplish. For instance, it is not uncommon for a company to pay based on gross sales and yet they are unhappy because their margins are too slim. Still others struggle because they pay based on gross margin and are concerned that their top line revenues are not high enough. A well balanced compensation program will carefully take into account precisely what management needs to achieve through their sales department and then create a manageable program to properly motivate their sales staff.

Our experts will perform a critical assessment to determine where the weaknesses might be in your company’s current compensation plan and then work with you to develop a simple, yet comprehensive program that will motivate your sales team to produce exactly what you expect and need from them.