A question I ask all new prospects is, “Is your current compensation plan driving the kind of behavior and delivering the results that you want?” The answer, more often than not, is “no!” If that’s the case it makes sense to re-evaluate how you pay your salespeople. Here are some of the most popular compensation options I’ve seen work in today’s business climate:
– Straight salary
– Salary + bonus
– Salary + commission
-% of revenue/margin
– Payout table with accelerators/decelerators
– Salary + “spiff” or contest
– MBO’s + activity-level bonus
– Straight commission
– Variable commission
– Draw against commission
– Recoverable or non-recoverable
– Residual commission
Regardless of the compensation plan you choose to implement it’s important to keep it simple, make sure the goals are fair, there is documentation to support the plan and make sure a salesperson knows how much they earn for every dollar sold!
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