Most sales compensation plans reward for yesterday’s news. Sure, the deal was won today, but there were things your salesperson did a year ago that made this happen. By writing the commission check today, how does this help your business in the future?
Oftentimes, the traditional sales compensation plan is based on the old expression, “You’re only as good as your LAST sale.” These plans don’t drive the desired behaviors of the sales team leaving results to resemble an EKG report. Effective sales compensation plans don’t just reward for wins; they also ensure the continued development of a healthy sales pipeline.
The traditional sales compensation strategy often includes paying draws to bridge earnings gaps with newly-hired salespeople. With recoverable draws, the salespeople accrue debt each day with the company. With non-recoverable draws, the salespeople receive “free money” which serves little benefit to the company.
Based on our proprietary “15 Key Principles for Effective Sales Compensation Design,” Sales Architects helps companies design sales compensation plans that:
Align with business objectives
Provide a clear focus for the salespeople so they wake-up every day knowing where to invest their selling time
Reward for sales wins, but drives desired sales activities and behaviors for a strong sales pipeline
Bridge the earning’s gap with newly-hired salespeople
Remember, job descriptions don’t drive sales activity; the sales compensation plan does. Our sales compensation development philosophy is: “You’re only as good as your NEXT sale.”