We are working through some offers for sales candidates with multiple clients this week and thought it would be helpful to discuss some general points.<\/p>\n
Salary<\/strong> – we’re big believers in a modest\/decent salary. The best plans we see provide a salary to cover the basic needs of the salesperson. If they are worrying about basic bills, they are not as effective. I know there is an old school belief that commission-only plans are the best – purest form of selling, you eat what you kill. The largest drawback to this approach is that sales managers often leave the salesperson to their own devices. Their rationale – the salesperson will either sink or swim. This is not a good investment of the company’s hard-earned leads.<\/p>\n Commissions<\/strong> – offer a realistic, uncapped plan. Often we come across commission plans that are set so astronomically high the space shuttle orbits them. Salespeople know this. I like to say, “If they make their number, they should own the company.” Keep the commission plan real. It is best to leave it uncapped and the best way to do this is to pay a percentage of gross (bid) margin. The margin reward is the tonic to the discounting disease. If you pay on revenue, the salesperson has no incentive to maintain high margins. Worst case, they will discount to below cost to get an easy sale.<\/p>\n Ramp Incentive<\/strong> – we always recommend offering some form of an incentive during their ramp up time. Here’s what we don’t recommend – don’t start them at a higher salary with the plan to lower it after the ramp period. This is always perceived by the salesperson as a pay cut no matter how clear the plan. Also, a guaranteed draw\/commission is risky in that the salesperson receives commission dollars without earning them through closed deals. This approach is synonymous to feeding bears in the park. Pretty soon, they stop hunting on their own and wait for handouts. We recommend you provide them with a ramp incentive but that they earn specific commissions by completing specific tasks (market analysis, value proposition, first few deals, etc.).<\/p>\n","protected":false},"excerpt":{"rendered":"