Sales&Marketing Management has a topical email newsletter that hits on some common issues. There is no link to their email so I’ll post the entire message here (emphasis mine):<\/p>\n
Sales force productivity remains a big problem for many executives. According to a one survey of executives at 67 companies across a wide range of industries, 60 percent are dissatisfied with sales force efficiency and effectiveness, with almost half saying that goals were not met. So what should managers do to boost productivity? Perhaps they should take another look at their compensation plans.<\/p>\n
Here are some tips to make sure your comp plan is up to speed:<\/p>\n
1. Make It Simple
\nHaving fewer measures creates focus for the sales force. Simplicity brings clarity to what the company needs to do to succeed.<\/p>\n
2. Pay for Performance
\nMore than half of respondents say their comp plans do not differentiate enough between top and average performers, which ends up being a demotivator. Focusing rewards on the right people is important because it will maximize the “bang for the buck” that a company will get for its compensation dollars.<\/p>\n
3. Reward the Right Behaviors
\nPlans should clearly identify which selling behaviors the comp plan will reward.<\/font> This is the key link to how the company’s strategy will be executed in the field. It takes some careful thought on the part of management to identify these behaviors, because the right ones to emphasize might be changing as a company changes its approach to the marketplace.<\/p><\/blockquote>\nAll 3 points are valid, but #3 is critical. Often we encounter positions that require a priority on one type of selling but the comp plan rewards the opposite. For instance, if the position requires new business development, it is imperative that the comp plan pay a higher commission on new customer business as opposed to existing customer business.<\/p>\n
It’s not rocket science, I know, but you would be surprised at how many companies overlook this simple point.<\/p>\n","protected":false},"excerpt":{"rendered":"
Sales&Marketing Management has a topical email newsletter that hits on some common issues. There is no link to their email so I’ll post the entire message here (emphasis mine): Sales force productivity remains a big problem for many executives. According to a one survey of executives at 67 companies across a wide range of industries, 60 percent are dissatisfied with sales force efficiency and effectiveness, with almost half saying that goals were not met. So what should managers do to boost productivity? Perhaps they should take another look at their compensation plans. Here are some tips to make sure your comp plan is up to speed: 1. Make It Simple… Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"bgseo_title":"","bgseo_description":"","bgseo_robots_index":"","bgseo_robots_follow":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[],"class_list":["post-152","post","type-post","status-publish","format-standard","hentry","category-sales-management"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p5Oho-2s","jetpack-related-posts":[{"id":802,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/04\/sales-manager-compensation-for-retention\/","url_meta":{"origin":152,"position":0},"title":"Sales Manager Compensation for Retention?","author":"Mike Cardinal","date":"April 4, 2007","format":false,"excerpt":"A recent conversation brought to mind the responsibility of sales management for the development of both existing and new sales people. Why? Retention. As the employment market has shifted to an \"employee market\" - at least for talented sales professionals - sales management needs to make plans to retain sales\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1501,"url":"http:\/\/selectmetrix.com\/blogs\/2008\/04\/sales-retention-through-compensation\/","url_meta":{"origin":152,"position":1},"title":"Sales Retention Through Compensation","author":"Derrick Moe","date":"April 4, 2008","format":false,"excerpt":"Commission-only sales plans are risky in my opinion.\u00a0 I know they are the truest form of selling - you eat what you kill.\u00a0 I simply think that many salespeople view this structure as a lack of commitment from the company.\u00a0 I'm not saying that is accurate, but I have talked\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":711,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/03\/communicating-your-sales-strategy\/","url_meta":{"origin":152,"position":2},"title":"Communicating Your Sales Strategy","author":"Derrick Moe","date":"March 1, 2007","format":false,"excerpt":"From Managesmarter.com's Crystal Clear Communication: To hear Scott Glatstein tell it, as much as three quarters of American companies \"do not broadly communicate their sales strategy\" to their sales teams. The result, not surprisingly, is a breakdown in the sales process. Aligning the sales compensation plan with the desired business\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1676,"url":"http:\/\/selectmetrix.com\/blogs\/2008\/07\/compensation-consternation\/","url_meta":{"origin":152,"position":3},"title":"Compensation Consternation","author":"Derrick Moe","date":"July 25, 2008","format":false,"excerpt":"I know, lame title, but I couldn't resist. ManageSmarter.com offers up this article - Compensation Complexity Hinders Sales - regarding current compensation plans.\u00a0 Here are some numbers they quote within the article (my editing): Only 41% of sales leaders were satisfied with their current compensation plans (down from 59% two\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1328,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/12\/compensation-keep-it-simple\/","url_meta":{"origin":152,"position":4},"title":"Compensation – Keep It Simple","author":"Derrick Moe","date":"December 10, 2007","format":false,"excerpt":"Every year we find December to be a fertile time for sourcing salespeople.\u00a0 One of the biggest reasons - the upcoming year's compensation plan.\u00a0 More specifically, new commission plans tied to new quotas.\u00a0 The salespeople receive the new plan and are, well, disgruntled.\u00a0 Or ticked off. Good salespeople tend to\u2026","rel":"","context":"In "Compensation"","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":787,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/03\/fixing-a-dis-incentive-plan\/","url_meta":{"origin":152,"position":5},"title":"Fixing A Dis-incentive Plan","author":"Mike Cardinal","date":"March 29, 2007","format":false,"excerpt":"OK, the Rock Star really hit a nerve with his recent post - A Commission Plan Gone Bad. I'm having flashbacks to a comp plan that still makes the hair on the back of my neck bristle. 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