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 … Read more Types Of Performance Measures And How To Use Them
Anyone who manages a sales team knows that sales activity must mirror the overall strategy of the company. The point of sales activity is to help the company reach its goals – and the clearer those goals, the easier it is to build a strategy that works. Key Sales Objectives (KSO) are related to the … Read more The Position Of Key Sales Objectives In An Incentives Scheme
Defining a sales role is one of the first to consider when designing a sales compensation plan. The individual program one decides to apply, for example a tiered commission plan, applies to a sales role and not (most of the times) to an individual. Now that each role is defined and grouped, it’s time to … Read more Is Every Sales Role Eligible For Compensation?
The sales incentive scheme is key to the success of any company that relies on selling products or services. After all, the sales incentive scheme determines how much sales people stand to earn. The most effective sales incentive scheme is one that truly motivates sales staff to reach or exceed targets (depending on company aims) … Read more Defining The Job Role Might Be The Answer To Any Commission Plan Problem
There are specific facts and points one must consider when trying when trying to sell a plan to salespeople. To create market demand and sell products, salespeople are depended upon by sales organization today to achieve this market input/output. This is an essential part of how the system works in most marketing environments, especially in … Read more Pitching Your Motivation Plan To Your Salespeople
When you hire a sales person you need to do your maths before; that means deciding how much you are going to offer to this person. And when we talk about offering, we mainly refer to the level of the OTE (on target earnings) the sales person will pocket in a year. This is the sum of the fixed salary and the variable part (as for example commissions) the sales person will get.
It is called on target earnings because the variable part will be granted in full only if the goals are met, whatever these are! The total target cash compensation, in many publications seen as TTCC is always in cash.
The target cash compensation is different for each sales role (its range differs per role) and sometimes per sales person. The question though is how one decides how much to give to a sales person in TTCC? And which are the factors to decide that level?
There are various scenarios and methodologies to use depicted in the below factsheet. Reach out to us to discuss a methodology that fits your company.
The design process of a sales incentives and reward program includes a mixture of terms, conditions and rules that apply. I would argue that the process is very specific and its steps shall be followed and thought through carefully. If the process is followed, the chances are that these common mistakes will be avoided.
Look below for some of the most common ones that are commonly seen in the market. Those are key ones to avoid when implementing a system.
Are your sales people leaving the job after a change in the motivation plan? Do they show signs of being demotivated?
The Sales Compensation Plan in place is evidently one of the main reasons sales people change jobs. It is also quite common that many organisations do not face the fact.
It is not just because the commission rates have been reduced that annoyed sales people. There are many other factors that lead to dissatisfaction. See below our factsheet with some key reasons associated with the compensation program that cause high turnover.
Start by assessing your program; watch and study data associated to performance and payout. Then you will find the individual aspects of the system to fix.