Sales Compensation Plans

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 […]

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, […]

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. […]

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 […]

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 […]