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The Key to Developing the Right Sales Compensation Plan

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Sales compensation plans double as a job description for your sales team. Use the equilateral triangle method to ensure the plan drives the right behaviors.

Today’s topic deals with developing a sales compensation plan. As you know, your compensation plan doubles as a job description for your sales team. Get it right and you’re golden. Get it wrong and welcome to the law of unintended consequences. “Why are they focusing on their existing clients when we want them to bring in new account?” Well, what did the plan tell your sales people to do?

As you review your compensation plan, consider the three sides of the equilateral triangle with the sides representing the sales person, the client, and the company. Note that I said equilateral triangle, not isosceles.

The most successful plans keep these three entities in balance. For example, if the plan compensates for winning a contract, but the expectation is that the sales person continues to service the client, the client won’t be happy because there is no incentive to service them.

Ask yourself what message your compensation plan sends to your sales team…and ensure it is the intended marching orders that positively affects the company, its clients and your sales team.

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.