The Sales Compensation Plan Mistake That Is Killing Your Business

If you have ever had to hire a lawyer, you had a simple, fundamental goal. Get me out of this mess as quickly and cheaply as possible. Yet, how are lawyers paid? By the hour! This compensation model penalizes lawyers for meeting the goals of their clientele. If the attorney is successful at resolving the problem quickly, she makes less money!

When you look at your sales compensation plan, does it align with what you expect your salespeople to do? Before you jump out of your seat and say, “Yes,” consider this.

Many companies compensate their salespeople as hunters meaning they are paid for closing deals. Yet, when you look at their responsibilities, the salespeople are expected to provide account management – in addition to bringing in the deals. In this case, if the sales compensation plan only rewards for closing the deal, you probably have a portfolio of clients that are not getting the level of account management support you expect…meaning that they are vulnerable to your competition.

Remember, your sales compensation plan doubles as a job description. Get it right and you have a focused, motivated sales team. Get it wrong and the law of unintended consequences takes over.

See you next time on the Sales Management Minute.

 AUTHOR:  LEE B. SALZ

Lee B. Salz is a leading sales management strategist specializing in helping companies build scalable, high-performance sales organizations through hiring the right salespeople, effectively onboarding them, and aligning their sales activities with business objectives through process, metrics and compensation. He is the Founder and CEO of Sales Architects, Business Expert Webinars and The Revenue Accelerator. Lee has authored several books including award-winning,  best-seller “Hire Right, Higher Profits.” He is a results-driven sales management consultant and a passionate, dynamic speaker . Lee can be reached at lsalz@SalesArchitects.net or 763.416.4321.