Dealing With Specific Areas Of A Sales Compensation Plan That Are Often Overlooked

Designing a sales compensation plan is not limited to just the decision of the commission percentage to give to a sales person when one closes a deal. Is not just the set of a sales target. There are many small areas that the sales compensation and incentives policy should address. Below the most important ones to consider.

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Sales Crediting; Who Gets Credit for a Sales!!!

The sales motivation scheme is one of the most powerful tools sales managers have at their disposal. The motivation scheme has a direct effect on team motivation, and therefore on whether they reach their targets. 

A sales scheme doesn’t function alone. A firm also needs:

  • Effective sales procedures and tools
  • A good product 
  • A receptive market for the product
  • An competitive offering

However, if all of these things are in place, then the sales scheme can help a business fly – or plummet. Whether a firm is a matured sales firm or a small start-up, the sales scheme can help an organization’s revenue exceed expectations.

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Types Of Performance Measures And How To Use Them

A sales scheme is a complex system with many moving parts. For example, management must decide how much to pay sales staff, and how much of their pay will be from fixed versus variable salary. One of the key parts of an incentives scheme is the performance measures used by the system. In this article we’ll take a closer look at different performance measures and how to choose the right one.

Sales Schemes – A Complex Machine

A sales scheme should work to help a company achieve its aims in terms of revenues, market placement, and customer relationships. A correctly-designed scheme motivates sales staff and helps them reach and exceed targets that support those aims. An effective scheme is one that is challenging enough to be exciting, while still giving sales staff a decent chance of achieving their targets. A well-designed scheme fosters excellent performance and company loyalty.

On the other hand, a badly-designed scheme can lead to confusion, frustration, and lack of motivation. This in turn leads to under-performing sales people, and eventually a higher turnover of sales staff.

Because of the importance of the sales scheme, it is essential that management take their time in designing it. A motivation program cannot be drafted and implemented in a few hours. It needs to be unique to the organization and carefully designed to support its long and short term goals.

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