Lysis Blog » HR

9 Key Steps to Sales Compensation Design

John Kypriotakis — Mon, 10 Oct 2011 12:50:52 +0000

Are your sales low? Margins thin? Do you experience high turn over in your sales department? Worse yet, do you tend to attract and keep low-performers? Have you considered you sales compensation plan as a cause for some of your problems? If you haven’t, you should. One point before we get started: Sales compensation plans are not a substitute for good sales management. You need to have both. Here are nine keys to properly designing a sales compensation plan: Assess your needs. How effective is your existing plan? Is it in line with and does it contribute to the accomplishment of your corporate goals? If not, what needs to change? Set compensation plan objectives. What do you want this plan to achieve? Growth, Greater Service, Profitability, Customer Focus? Your plan should not merely address short-term financial issues. Define the sales reps’ role. What role do sales reps play in finding, cultivating and keeping customers? What challenges do they face? Establish the pay range. Determine what you can afford to pay and how competitive you want your pay structure to be. Where have you current reps come from? Where do those who leave go? Answers to these questions will provide insights [...]

Compensation Design: Define the sales rep’s role

John Kypriotakis — Mon, 16 May 2011 16:05:53 +0000

So what is new in the world of sales compensation? In a way the more things change, the more they stay the same. Fundamentals don’t change and as such they are always a good place to start. There are at least nine components to successful sales compensation design. There is a post (9 Key Steps to Sales Compensation Design) that lists these steps for your reference. In this post we will examine Key Step #3 “Define the sales reps’ role” in greater detail. As you approach your new sales plan design, and before any percentages are assigned or incentives are in place, take inventory of where you stand by asking these questions first. What roles do your sales people play in the sale? What roles do they play in addition to selling? How involved are they in administrative tasks such as running quotes, estimating, proof runs, monthly billing, etc? What do these tasks cost directly (e.g. salary, expenses, benefits) and indirectly (e.g. missed opportunity cost, inappropriate use of resource and skills)? Do you want to encourage them to do more or fewer of these tasks? There isn’t a right or wrong answer really, as it depends on your objectives. Just an illustration [...]

Sales Force Dynamics: Instituting an Ideal Compensation Plan

James Roumeliotis — Mon, 21 Feb 2011 02:30:23 +0000

Sales compensation is a crucial factor in motivation. It is the sales executive’s best strategic tool to drive sales performance and motivate specific selling behaviors. When designing sales compensation plans, one of the most important steps is to identify the appropriate measures on which your sales representatives will be paid. A combination of salary, commission and bonus is usually most effective. The question then becomes how to successfully blend all three that will entice achievers, as well as reward them according to performance. Nevertheless, the plan needs to be kept as simple as possible.

Building a High Performance Sales Team (3 of 3)

John Kypriotakis — Sun, 01 Aug 2010 10:00:27 +0000

In “Building a High Performance Sales Team” we have covered the following steps: Creating a Crystal Clear Vision, Evaluating your Existing Team and Bringing New Players Onboard. Here then are the final two steps: CREATING THE RIGHT ENVIRONMENT Are the company culture and environment hospitable to a high-performance sales team? The right environment requires a properly designed compensation plan that is attractive to top performers, rewards the right activities and results, is challenging (but still achievable) and, above all, fair. To attract and keep top-performers, the compensation structure has to be just right – give great weight to creating the best plan possible. Research your market, get input from your peers and discuss ideas with top-performers regarding what works best in their respective areas. Since competitive and independent high-performers spend most of their time in a volatile marketplace they have to be part of a supportive team internally. How is the internal support staff viewing your sales team? Is there any evidence of the “we-they” syndrome? If so, it is imperative to find what causes it and eliminate these factors as quickly as possible. The marketplace is tough enough without internal battles. To find out what works, and what doesn’t, [...]

Building a High Performance Sales Team (2 of 3)

John Kypriotakis — Wed, 21 Jul 2010 10:00:10 +0000

The first step in bulding a high performance sales team was to develop and communicate a crystal clear vision and purpose. Here are the next two steps: Evaluating your existing team and bringing new players onboard… EVALUATING EXISTING TEAM Once the job responsibilities, personal traits and professional competencies are defined and agreed upon by the management team, this next step becomes much easier. It’s time to evaluate the existing team… How closely do they fit the profile that is needed to succeed in the marketplace? This is done in a variety of ways: Reviewing Performance Sales Trends, Profitability, New Account Development, etc. Personal observation Making joint calls, debriefing accounts and strategy, evaluating their ability and willingness to learn and adapt, etc. Utilizing Assessments Evaluate skills, attitudes, and behaviors relating to selling. Many such instruments are available from organizations like Assess Systems, Caliper, Target Training, etc. This evaluation will lead to the determination that perhaps the right people are already on board, that some or all of the team members need additional training to meet high-performance standards, or that some new members have to be added to the team to replace or complement the existing staff. It’s time for some difficult [...]