Tag: Sales Compensation Plan – Design

After many years of being involved in the implementation and design of compansation schemes and programs, I’ve discovered valuable secrets leading to both successful and disastrous outcomes for companies and their sales teams.

A few years ago, while working in an IT company, the whole salesforce was reshuffled after the management discovered that their motivation scheme was actually demotivating the sales people so much that their team left the company in search of better opportunities.

Time after time, when you examine the high turnover ratio in companies, you’ll find the root cause is centred around poorly constructed motivation schemes. 

Is this something that you want to see in your own company, in your own sales team?  In the next few minuutes we’ll examine the very simple CQT design formula for successful compensation programs. 

But first, let’a have a look at how we define failure.

Read more →

As anyone involved in selling knows, a sale is never really finalised until the payments have been made, which could take weeks, months and sometimes years. So at what point in the process should the sales people expect to receive their sales commission?

The answer to that question may seem straightforward for most companies, particularly those well-established and matured. They determine when a sales person will receive their commissions based on past experience, with a combination of trial and error. What other factors should be considered, and is there a simpler approach to this process?

A starting point to finding resolution was to ask fifteen associates and colleagues in the sales management space. They all came back with similar answers. “Once the customer has signed the agreement, we recognize the credit to the sales people. And then,” most of them said, “we pay the full commission the following month”.

Read more →

Often, people think designing a motivational scheme is a task that can be done in no time; this is not true.  It is imperative that a team is responsible for the system looking to base it on the terms and conditions of the organization whether big or small. This would boost productivity and efficiency.

It is expected of big firms to have a designated design team with the sole aim of accessing current system incentives, improving or developing a new scheme if necessary. Does that mean though that only a big company should strive to create an effective incentives scheme?  

Here are five fundamental questions that will help a company with deciding on the system to use.

1.    Who from sales and non-sales functions and roles should participate in the motivation scheme? 

Read more →

Any business that has a sales force needs the right sales motivation scheme. A good sales incentive plan takes into account all the details of the business, the sales force, the customers and market forces. The right scheme keeps employees happy, motivated and loyal, which ultimately boosts sales.

Businesses Are Becoming More Global

Selling goods globally is easier than ever before thanks to fast and reasonably priced product shipping, tax and trade treaties between countries, and e-commerce. As a result, more businesses are looking to expand beyond the borders of their own country.

Selling in different geographic markets raises some challenges for businesses; business culture is often similar between developed countries, but it’s by no means identical. 

The Challenges

For large businesses with customers or offices in more than one country, there are some challenges associated with designing a sales incentive scheme. These might include:

Read more →

The right sales incentive scheme is a must for any business that relies on sales people. Finding the right scheme means rewarding employees in ways that encourage them to achieve more and sell more. You might opt for a commission based scheme, or reward yearly bonus pay based on performance, for example.

For some businesses, sales people work in teams rather than alone. In some cases, if you are selling a more complex product to an another business, you’ll need more than one sales person to close the deal. For example, a member of your main sales team selling a piece of software might need the help of a technical sales support person.  If you have sales people working together or in teams in your business, you might have wondered whether a team based commission scheme can work for you. Or perhaps you have a team based commission scheme that’s not quite working as you hoped.

Let’s take a look at how team commissions work, how to know if they’re right for your business, and how to implement them for the best results.

Read more →