Answers
May 06, 2017 - 09:21 AM
This is a complex question (whole books have been written about it) but I'll attempt to address it briefly:
Setting up a sales compensation plan
A company’s compensation structure is a critical component to the success of your sales force. As such, the compensation plan should be very closely tied to the strategic goals of the company. Ensuring that you have a well thought out compensation plan is critical to hiring and retaining your sales talent and it can be the difference maker for your company. Some factors to consider when setting up your plan are as follows:
Overall sales strategy – What are the sales goal for the company? Who is the target audience? Are you targeting SMB type companies or enterprise type accounts?
Complexity of the sale – Is this transactional in nature or does it require building long term relationships? How much technical knowledge will they need to have? What is the length of the sales cycle? How many different people will be involved in the sales process? How complicated is the contracting process? How much involvement will they need to have in ongoing account management?
Role of the sales person in the organization – Is the focus of the role primarily Hunting (outbound), Farming (growing existing business), or Catching (inbound)? How do they fit into the overall sales process? What sales support will they have in closing the deal?
Target compensation – What is the total compensation that you expect them to make if they reach their sales targets? Are there added incentives if they beat their goals? Are there added incentives for a particular behavior that is strategic to the company goals e.g. Number of new accounts or accounts in a specific industry? Is this consistent with what the current market is?
Compensation mix - What is the mix between base and incentive compensation? Are you offering any type of incentive guarantees during their ramp up period?
Payout – What is the timing of commission payments? How long will they receive commissions on any given account? What happens if the customer doesn’t pay?
Sales commission plans should be designed to evolve with your company and will change over time. Paying close attention to how the commission plan effects the behavior of your sales team will be a good indicator as to whether you have the right plan in place.
Setting up a sales compensation plan
A company’s compensation structure is a critical component to the success of your sales force. As such, the compensation plan should be very closely tied to the strategic goals of the company. Ensuring that you have a well thought out compensation plan is critical to hiring and retaining your sales talent and it can be the difference maker for your company. Some factors to consider when setting up your plan are as follows:
Overall sales strategy – What are the sales goal for the company? Who is the target audience? Are you targeting SMB type companies or enterprise type accounts?
Complexity of the sale – Is this transactional in nature or does it require building long term relationships? How much technical knowledge will they need to have? What is the length of the sales cycle? How many different people will be involved in the sales process? How complicated is the contracting process? How much involvement will they need to have in ongoing account management?
Role of the sales person in the organization – Is the focus of the role primarily Hunting (outbound), Farming (growing existing business), or Catching (inbound)? How do they fit into the overall sales process? What sales support will they have in closing the deal?
Target compensation – What is the total compensation that you expect them to make if they reach their sales targets? Are there added incentives if they beat their goals? Are there added incentives for a particular behavior that is strategic to the company goals e.g. Number of new accounts or accounts in a specific industry? Is this consistent with what the current market is?
Compensation mix - What is the mix between base and incentive compensation? Are you offering any type of incentive guarantees during their ramp up period?
Payout – What is the timing of commission payments? How long will they receive commissions on any given account? What happens if the customer doesn’t pay?
Sales commission plans should be designed to evolve with your company and will change over time. Paying close attention to how the commission plan effects the behavior of your sales team will be a good indicator as to whether you have the right plan in place.
May 19, 2017 - 08:03 AM
Have you been able to sell the product you have created? If the answer is no, don’t hire. If the answer is yes, but I’m not selling enough yet. Then dig into why. Is it the product, the features, the price, the process? Where are you getting bogged down?
Once you have a repeatable sales process, hire sales people. Until that point, hire a business development manager. If you hire a BD executive, they should have a track record of taking an ambiguous process and converting it into a repeatable and scalable sales effort.
Once you have a repeatable sales process, hire sales people. Until that point, hire a business development manager. If you hire a BD executive, they should have a track record of taking an ambiguous process and converting it into a repeatable and scalable sales effort.
Add New Comment