Compensation for a sales team is always a subject to arouse a lot of interest from both sales management and the sales team. It’s basically a balancing act of sufficiently paying a fair and motivating commission combined with keeping costs in line with annual commission budgets.
I’ve found that the most successful commission plans motivate and reinforce positive behavior from the team…rewarding team members for their hard work and motivating them to achieve and exceed sales goals. I believe the best plans are clearly understood by the sales team and reward at least quarterly but preferably on a monthly basis.
Successful commission plans:
- Pay for what is sold
- Encourage the sales team to look at the greater team goal
- Provide incentives (spiffs) for selling new or targeted products
- Reward extra on whatever is sold after achieving the revenue goal.
Unsuccessful commission plans:
- Limit commission payouts to only hitting the actual goal
- Encourage the sales team to ‘only look out for themselves, not the team’
- Cap maximum commission payouts
- Are very confusing about how commission is calculated and paid out.
Successful sales teams are working together to achieve their own sales goals and are also conscious and supportive of other team members in order to achieve, and exceed, their total team goals.
I welcome your comments…