subject: Sales Compensation Plans – The Right Incentive! [print this page] Sales Compensation Plans The Right Incentive!
Perhaps the most common element is false sales organizations will be implemented in the Sales Compensation Plan. Many of the compensation plans I just see the opposite effect they will have sales people hate it, managing it hates, and hates accounting.
They each have their own reasons why it did not quite work for them, but the negative result is the same. An effective compensation plan needs careful consideration inthe following six areas:
Pay mix. How much of the seller, the target income levels and how much is the variable pay.
Quotas. This should not be terminated AT corporate goal, as only 70% of the sales team to meet the "quota".
Leverage belong. Well above a roughly on the head for big payout if there is objective and a disadvantage if a threshold is not met.
Variables / levels. Variables are factors that the compensation on the basis, such as sales, product mixNew and existing businesses, etc. and relate at all levels to the number of disbursement brackets are available, such as 3%, 4%, 5% on the power inside of variables.
Payment / Credit Timing. Posted on sales to as commissions and refunds or credits for future bad debts are treated.
Deficit / Windfalls. A deficit is a place to stay for changes made midstream, beyond the control of sellers, such as corporate re-orgs, the sudden change in its territory, that the productsunexpectedly dropped, etc. A windfall is a major sales event, which occurs outside the influence of a salesperson.
Each of these areas must work together so that 1) they are compensation for your sales where you want them the most and 2) a salesperson can quickly focus on their income at any time (it may to be more proactive in their behavior ).
