A well designed sales compensation plan is the key to growth and greater profits.

How important is an effective sales compensation plan? Much more than you think. The right sales compensation plan can literally make or break a business.

In my 30 years in sales, I have been amazed how many businesses just don't get it. But that is a fact. Most companies pay their sales people the wrong way! Let me give you a few examples of common mistakes made in sales compensation plans.

  1. Sales compensation plans that are too complex. Nothing like killing motivation and wasting time while the sales reps try to figure out how and if they will get paid.
  2. No matter what changes you make, your sales people always think they are getting screwed right? You have to get them to buy into the plan before you roll it out. I literally just raised commission one time and I still got groans!! I remember holding myself back from saying "Are you........ kidding me? We just raised your commission. What are you complaining about!!?
  3. The other department heads do not understand sales and are always wanting to cut the commissions or find ways of paying less. They complain that the sales reps make too much. Wrong approach. they need to be educated.
  4. You have to pay more commission to get more sales. Wrong again.

Don't be discouraged. It's not just small and mid sized businesses that have these challenges. At a public company with a market cap of 3 billion, I once designed a compensation plan that was initially trashed by the finance team for paying higher commissions on certain products.

They focused on that instead of the decrease in commission on less profitable items. After convincing them to approve it, here was the outcome: Higher profits, less turnover, happier sales people focuses on selling more profitable items. The average compensation per sales rep actually dropped. Why were the sales people happy about lower commissions? They understood that we did not make money on a certain product so we were going to lower that commission. They also understood that we RAISED the commission on the more profitable items. We made the compensation plan more in line with what the company needed.

The bottom line was that everyone was happy. More profits, happy sales people, finance department stunned. How did we do that?

I call it corporate alignment.

You are not going to find a cookie cutter sales compensation plan here or anywhere that will fit your particular business. To do this right, your business needs to be looked at from the outside in.

If you are interested in learning more about this highly effective approach, contact us for an initial evaluation. Our experience and creative solutions will deliver real results to your bottom line.

Creative Solutions Enterprises
888-273-1969