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Sales compensation plans are designed to both motivate sales pros and meet organizational needs. As employers are formulating their plans, they have different options available: straight salary, salary plus bonus, salary plus commission, and commission only. Then within plans that involve commission, there are different rates, thresholds, structures and quotas that a rep must understand in order to earn their commission targets.
Any sales professional worth their salt will want to secure a sales compensation plan that helps them meet their financial goals and keep them motivated throughout the year. But what can you do if you are presented with a disappointing sales compensation plan? How can you secure a better one? As a sales pro, you’ll understand that obviously, negotiation is key. Here’s how to negotiate your way to the sales compensation plan you need and deserve.
Understand the Thinking Behind the Plan
Upon receiving a compensation plan that you think unsatisfactory, you should take the time to understand it in it’s entirety and weigh up the pros and cons. But before you make a move towards negotiating, take your evaluation a step further and consider the reasoning behind the plan. This will help you when formulating your counter offer.
Ultimately, your plan will have been structured in a way your company believes will make them the most money. You simply need to ask yourself, what are the specific organizational issues that have resulted in this plan? Just as you would consider a prospect’s potential objections before going into a sales conversation, consider the pain points of the company at this point in time. Think about territories that may have been underperforming or a need to bring in new reps with new accounts. Or perhaps the plan has simply been formulated to save money and avoid paying high rates of commission.
Whatever the case, you need to delve into these pain points in order to find the solutions to present to your employer as the reasons why you are worth the greater investment.
Get the Facts
By this point, you’ve found some points you can use in negotiations with your employer. But before you start the conversation, make sure your ideas are backed up by facts and statistics. Know industry standards for compensation in your sales market. Use websites like PayScale.com, Salary.com, or Glassdoor.com to find stats to back up what you are saying about comparable rates of pay.
Use real examples of your past success to help shape your arguments too. If you are requesting a commission rate or base salary above industry standards you will need to make a compelling case as to why. Proving your track record is imperative, and you should be thorough.
Think Outside the Box
Ok, so you’ve done your research and you’ve formulated reasons why you are worth a better plan - now is the time to get creative. Compromise is key in any negotiation so take the time to consider what truly matters to you. Is it your rate of commission OR is getting a higher base salary what you really want? Are you willing to take a hit in one area to make gains in the other?
Use your research to decide which areas of your compensation package your company will be more willing to negotiate. If you know that cold, hard cash is an issue, think about other ways you might improve your remuneration such as bonus structure, vacation days, training and development, opportunities for advancement and stock options. If you go into a negotiation with unrealistic demands you’ll be setting yourself up for failure so make sure what you are suggesting is not only persuasive, it’s possible.
The Bottom Line:
Negotiation is key and lucky for you, as a sales pro, negotiation is a strength. Do your research and make sure you are ready to counter objections with facts, statistics and your proven track record. Think creatively and ensure you’ve evaluated the plan based on the value of the entire compensation package. Finally, be realistic and willing to compromise so that what you are presenting is both a better sales compensation plan for you and your company. Go on, make them an offer they can’t refuse.
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