Tuesday, November 11, 2014

Setting up an effective sales compensation plan to attract the best salespeople.

Whey you're first starting a business you do everything yourself- research, development, fundraising, production, even housecleaning- but if your ultimate goal is growth, you'll eventually need to hire help. 

In most cases growth will inevitably include hiring sales people. And odds are you're going to want the best salespeople around but unless those people are close relatives willing to work on the cheap, you're going to need an attractive compensation plan. 

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It's certainly no easy task to develop a compensation plan as a lot of difficult questions have to be answered at the outset: base pay vs. commission, performance indicators and measurement, conflict resolution. These are all things that will contribute directly to whether your company can attract elite salespeople, which will ultimately affect your company's bottom line. While the specifics of sales compensation plans can vary widely from business to business, there are core factors that should be found in any compensation plan. This week SkyPlanner will cover them in hopes that we can help your business crafts its own sales compensation plan. 

The first is writing the plan. A well-written compensation plan should include your company's: 
  • Sales strategy - How your salesforce will focus and engage selected target markets to position your brand or product in the minds of customers.
  • Performance indicators - The measuring stick that tells you how well (or poorly) your salespeople are performing. 
  • Compensation methods - How your salesforce will get paid for closed deals. Base pay + commission, soley commission based, base pay + bonus, etc. The best salespeople know what they're worth. 
  • Conflict resolution protocols - Even the most comprehensive plan will never cover every possible scenario. This outlines the methods for resolving conflicts as they come up. 
Once the above points are written out it gives your sales manager (whoever that may be) a jumping-off point for effectively communicating with your sales staff. 
Our next post will cover how to develop an effective sales strategy and the performance objectives you'll want to track. Stay tuned!