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Jul 23, 2019 | Canadian Professional Sales Association

Recruiting, retaining and developing your best salespeople should be every sales leader’s goal. This is no trifling matter. Your sales team can be the difference between company success or failure. 


A winning sales compensation structure is competitive in the industry. It rewards and motivates salespeople but importantly, it also encourages the behaviours that lead to sales success. Here’s how to build a winning sales compensation structure.


Make it Clear and Transparent


While sales compensation structures are often necessarily complex beasts, they won’t be a motivational force if reps don’t understand how they work. Communicate the sales compensation structure clearly...and repeatedly. Make sure it is transparent without unnecessary complications. 


If you want to motivate your salespeople, a rep should be able to easily calculate how much a deal is worth to them at the point of sale. And remember, there’s no bigger disincentive than if you think you’ve earned a reward or bonus only to find that the small print means you don’t qualify. 


Look at Company Goals


The point of the sales compensation structure is to motivate your sales team to achieve the goals you need for company success. Ensure that your sales compensation structure and commission are aligned with company goals. For example, if an organizational goal is to grow in a new market, offer a higher rate of commission on new customers in that area.


But Don’t Overlook the Importance of Client Retention


That being said, you don’t want your reps to ignore your existing client base: recurring revenue and referrals are important for a healthy bottom line. Find a way to balance rewards for new business with rewards for client retention and customer service.


Reward the Bigger Picture


If your sales compensation plan is based on monthly quota alone, you risk sales reps hastily pushing through bad deals to just make their targets. This is bad for both your reputation and your bottom line. Again, you need to look for a balance. As you link payment with performance, consider ways to split commissions and bonuses between some immediate rewards and others that arrive when the customer relationship goes the distance - 12 to 24 months down the line.

 

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