Knowing what to pay your sales team is not easy. There are so many variables and so many ways to compensate for a sale.
According to Liz Cobb, CEO of Makana Solutions, “No one goes to college for sales compensation. As a result, business leaders struggle with a myriad of legacy plans, spreadsheets, and other details to design and manage sales compensation, rarely achieving optimal results and often experiencing unintended consequences such as overpayment, less-than-adequate business results, and teams that work against each other.”
Technology might help. In the same way we use an accounting program to assist with financial management, business planning software to help develop or evolve a business plan and a hammer to fix a broken desk drawer, there are software tools you might want to consider to help you develop a sales compensation strategy.
Writing about sales compensation, Adrian Miller writes in an issue of the New York Enterprise Report It is critical to remember that sales reps are generally unhappy about having their sales compensation plan changed without ample notice and participation. Ask for input and, if possible, make this a group process. Your sales reps should also have easy access to their sales data so that they know where they stand. Your new plan should help you recruit and motivate well-qualified reps, decrease sales staff attrition and continuously improve your company’s competitiveness.
At the end of the day, once you do all you can to manually (interviews, gut, past experience, etc) figure out how to compensate your sales staff, using software to help calculate the best sales compensation for your sales staff could assist and ensure you are on the right track.
One tool you could consider is Makana Motivator Pro Sales Compensation which helps you in three areas:
- Sales compensation planning
- Sales compensation payment
- Graphical reports for easy to read feed-back
“Our research has found that sales compensation is hampered by spreadsheets, email and scattered information that contribute to a decline of sales productivity,” said Mark Smith, CEO and executive vice president of research, Ventana Research.
Although most of us use a variety of tools to help manage and grow our businesses, as much as we can use less tools that are specialized for particular tasks, especially tasks (like sales compensation) of key importance to our business.
If your business relies on a sales team to grow your business, it’s important that they are paid correctly (pay too little and you wont’ have a happy sales team, pay too much and you’ll be out of business). Consider using software to help or at least be a “second opinion” to your existing sales compensation framework.