Honor and glory typically go to the soldiers on the front line. In business, the front-line soldiers are your sales force. Sales reps are in the field working with your customers, understanding their needs, developing solutions, selling your products and services. Your sales reps drive revenue every day. But, can they do it alone? No. […]
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When Should I Expand My Sales Force?
Posted by David Wallace on November 25, 2009
To determine when to expand your sales force, you need to ask yourself two questions: “What can I afford?” and “What can the market support?” What Can I Afford? Sales reps produce revenue. They prospect for customers, present your products and solutions, and close deals. The more sales reps you hire, the more revenue you […]
Read MoreSales Compensation Plan – Draw Against Commission
Posted by David Wallace on November 19, 2009
When you bring a new sales representative into a territory, he will often ask about a “draw.” The first time you hear the term, you may not know what it is or why it’s important. A draw is a pay advance against expected earnings or commissions. It can be important to both your sales representative […]
Read MoreSales Compensation Plan – Terms and Conditions
Posted by David Wallace on November 11, 2009
Most sales reps and managers focus on the commissions section of the sales compensation plan. This is where your sales rep figures out how much he or she can make – “if I sell x dollars of revenue, I’ll make y dollars in commissions.” It’s equally important to understand the terms and conditions section of […]
Read MoreSales Compensation Plan – Variable Compensation
Posted by David Wallace on November 2, 2009
The variable compensation portion of your sales compensation plan can be made up of three components: commissions, bonuses and performance awards. Commissions are earnings tied to sales. The more sales your sales representative makes, the more commissions the sales representative earns. Bonuses are earnings tied to pre-defined goals. You may pay bonuses for surpassing quota, […]
Read MoreDesigning Your Sales Compensation Plan
Posted by David Wallace on October 28, 2009
As discussed in “Sales Compensation Plan – Goals” (10/22/09), your sales compensation plan needs to be based on achieving specific goals – corporate, personal and sales team retention. To design your plan, you will incorporate compensation elements such as quotas, awards, bonuses and commission payments that motivate your sales personnel to achieve the plan’s goals. […]
Read MoreSales Compensation Plan – Why Pay a Base Salary?
Posted by David Wallace on October 26, 2009
In today’s economy, I see many postings by companies looking to hire sales professionals on straight commission. Their logic is that if a sales representative is good, the rep will have no problem “eating what they kill.” Straight-commission sales reps are inexpensive to bring on board, do not add to your company’s overhead, and are […]
Read MoreSales Compensation Plan – Goals
Posted by David Wallace on October 22, 2009
Overview Your sales compensation plan needs to motivate your sales representatives to accomplish three goals: Achieve your corporate revenue goals Realize their personal and professional goals Want to work for you and your company In addition, the sales compensation plan should enable you to attract new sales reps as your organization grows. How do you […]
Read MoreHow Many Sales Reps Should I Employ?
Posted by David Wallace on October 20, 2009
The number of field sales reps you need to cover a market is a function of the size of the target market (number of prospects, number of customers and size of geography), the complexity of the product or sale, and the level of sales support. The number of sales reps you employ is a balance […]
Read MoreHow Much Territory Should I Give My Sales Reps?
Posted by David Wallace on October 12, 2009
When it comes to territory, often less is more.
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