Is Your Sales Compensation Plan Sending the Wrong Message?

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Wondering why your sales people focus on some tasks and not others? The sales compensation plan could be to blame. In this episode of the Sales Management Minute, learn how to avoid this compensation blunder.

My son David decided he wanted to start playing basketball this year. Saturday was his first game. He was amazing and his team dominated their opponent. All of the parents were on their feet cheering and my David scored his first basket. We outscored the other team 18-2, but… we lost!

How can you lose a game when you are up 18-2? Before the game started, there was a skills competition. Points were allocated for each skill and those points were added to the score. Watching our team during these drills, we fully expected to be on the short-side of the 18-2 score. The kids on the other team smoked ours in all of the skills. As a result, points were added to their game score and they received enough points for them to win the overall game.

At this level, the league emphasizes skill basics over the actual game. They feel it is more important for the kids to develop a solid foundation and so more points are awarded for the team’s performance in the skills competition. This may seem like an illogical system, but this is how the league structured scoring for this season.

Being a supportive parent, I attended all of David’s practices which focused on game-play. Very little time was spent on the skills drills during practice. Clearly, the other team focused on the skills drills. You could argue that the league’s scoring strategy is flawed, but the other team played under the same set of rules. The other team won because their coach had studied the scoring system and focused his team on the activities that led to the award of points.

Consider this story in terms of your sales compensation plan. The plan communicates a FREE eBook – Sales Compensation Best Practices message to your sales people. When you present the sales compensation plan to your people; they analyze it … dissect it … study it. They are on a quest to determine how “points are awarded.” If it is flawed, your team is going to invest its time on activities that are out of alignment with the business’ objectives. You can yell and scream at your sales people or wave a job description in their faces, but nothing directs sales people more than how they make money.

As you develop your next sales compensation plan, make sure the message it communicates is the message you intend.

See you next time on the Sales Management Minute.


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.