{"id":1676,"date":"2008-07-25T07:55:50","date_gmt":"2008-07-25T12:55:50","guid":{"rendered":"http:\/\/selectmetrix.com\/blogs\/2008\/07\/compensation-consternation\/"},"modified":"2008-07-25T06:53:14","modified_gmt":"2008-07-25T11:53:14","slug":"compensation-consternation","status":"publish","type":"post","link":"http:\/\/selectmetrix.com\/blogs\/2008\/07\/compensation-consternation\/","title":{"rendered":"Compensation Consternation"},"content":{"rendered":"<p>I know, lame title, but I couldn&#8217;t resist. ManageSmarter.com offers up this article &#8211; <a target=\"_blank\" href=\"http:\/\/www.managesmarter.com\/msg\/content_display\/sales\/e3i7bf6cae6fb666e86c6bd8ddc327b7107\">Compensation Complexity Hinders Sales<\/a> &#8211; regarding current compensation plans.\u00a0 Here are some numbers they quote within the article (my editing):<\/p>\n<blockquote><p>Only 41% of sales leaders were satisfied with their current compensation plans (down from 59% two years prior), and only 46% believed their plans were promoting the correct behaviors for sales success.<\/p>\n<p>Nearly half (46%) of sales force leaders believe their sales compensation programs have become more complex since 2006.<\/p><\/blockquote>\n<p>I always found the compensation plans to be more &#8220;complex&#8221; when I wasn&#8217;t at quota.\u00a0 Successful selling definitely alleviates many problems.<\/p>\n<p>But there is this:<\/p>\n<p>The survey points out that many companies are making strides toward more effective compensation plans. Among the productive steps forward are companies using three or fewer measures of performance (73%), conducting a plan review at least annually (77%) and changing metrics less often than before (58%).<\/p>\n<p>Those are 3 excellent points regarding sales compensation plans.\u00a0 Companies that shift the commission structure around mid-term (weekly, monthly, quarterly, etc.) are generally demotivating their sales team.\u00a0 Consistency is the best policy here.\u00a0 Try to change it only at preset intervals (annually).<\/p>\n<p>Measuring too much can also be a demotivator.\u00a0 Simple, straight-forward commission plans work best.\u00a0 We are proponents of providing commission based on gross margin in as many situations as possible.\u00a0 This approach keeps the salesperson honest when it comes to discounting.\u00a0 If they discount, they lose money themselves &#8211; a very good structure for money-driven salespeople.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I know, lame title, but I couldn&#8217;t resist. ManageSmarter.com offers up this article &#8211; Compensation Complexity Hinders Sales &#8211; 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 years prior), and only 46% believed their plans were promoting the correct behaviors for sales success. Nearly half (46%) of sales force leaders believe their sales compensation programs have become more complex since 2006. I always found the compensation plans to be more &#8220;complex&#8221; when I wasn&#8217;t at quota.\u00a0 Successful selling definitely alleviates many problems. But there is this: The&hellip; <a class=\"read-more\" href=\"http:\/\/selectmetrix.com\/blogs\/2008\/07\/compensation-consternation\/\">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":[20,4,5],"tags":[45,896,1764,877,121],"class_list":["post-1676","post","type-post","status-publish","format-standard","hentry","category-compensation","category-sales-management","category-trends","tag-commission","tag-commission-structure","tag-compensation","tag-sales-commission","tag-sales-compensation"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p5Oho-r2","jetpack-related-posts":[{"id":1328,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/12\/compensation-keep-it-simple\/","url_meta":{"origin":1676,"position":0},"title":"Compensation &#8211; 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 &quot;Compensation&quot;","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":1676,"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 &quot;Compensation&quot;","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1668,"url":"http:\/\/selectmetrix.com\/blogs\/2008\/07\/a-fundamental-lack-of-communication\/","url_meta":{"origin":1676,"position":2},"title":"A Fundamental Lack Of Communication","author":"Derrick Moe","date":"July 18, 2008","format":false,"excerpt":"The more companies we work with, the more we see communication breakdowns being the root of most problems.\u00a0 Our work with our clients spans more than just recruiting.\u00a0 We assist them in onramping their new salesperson.\u00a0 This function places us in the unique position of working with both the salesperson\u2026","rel":"","context":"In &quot;Communication&quot;","block_context":{"text":"Communication","link":"http:\/\/selectmetrix.com\/blogs\/category\/communication\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":152,"url":"http:\/\/selectmetrix.com\/blogs\/2006\/07\/sales-compensation-plans\/","url_meta":{"origin":1676,"position":3},"title":"Sales Compensation Plans","author":"Derrick Moe","date":"July 5, 2006","format":false,"excerpt":"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\u2026","rel":"","context":"In &quot;Sales Management&quot;","block_context":{"text":"Sales Management","link":"http:\/\/selectmetrix.com\/blogs\/category\/sales-management\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1238,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/10\/product-vs-service-sales-compensation\/","url_meta":{"origin":1676,"position":4},"title":"Product vs. Service Sales Compensation","author":"Derrick Moe","date":"October 16, 2007","format":false,"excerpt":"We have been running into this topic of late with offers in different industries and it is a real stumbling block for some companies.\u00a0 I have worked as a salesperson for both product sales and service sales with different commission plans.\u00a0 The crux of the issue falls on margin. We\u2026","rel":"","context":"In &quot;Compensation&quot;","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":702,"url":"http:\/\/selectmetrix.com\/blogs\/2007\/02\/gross-margin-compensation\/","url_meta":{"origin":1676,"position":5},"title":"Gross Margin Compensation","author":"Derrick Moe","date":"February 27, 2007","format":false,"excerpt":"From MarketingProfs.com's Marketing Challenge: Gross Sales vs. Gross Profit: Our star salesman is the best closer I've ever seen. He sells products and services. He's paid a salary plus commission on gross sales. He does have some pricing latitude. I've noticed a fairly stable gross profit percentage on products, but\u2026","rel":"","context":"In &quot;Compensation&quot;","block_context":{"text":"Compensation","link":"http:\/\/selectmetrix.com\/blogs\/category\/compensation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/posts\/1676","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/comments?post=1676"}],"version-history":[{"count":0,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/posts\/1676\/revisions"}],"wp:attachment":[{"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/media?parent=1676"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/categories?post=1676"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/selectmetrix.com\/blogs\/wp-json\/wp\/v2\/tags?post=1676"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<!-- WP Super Cache is installed but broken. 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