It takes a special mix of skills and instinct to be a successful salesperson, and companies that find salespeople who shine will understandably want to do everything they can to hold onto their talent. Offering attractive compensation may seem like a foolproof way to keep good salespeople on board in practice, but in reality, it can be difficult to find the perfect formula to motivate without compromising the company’s budget and goals.
What Is Sales Compensation Consulting?
Sales compensation is the mix of a base salary, commission and other incentives that are used to drive the performance of a sales organization, and sales compensation consulting is a service that advises businesses on how to get their compensation plan just right. This not only serves to keep current employees happy and help them reach their fullest potential, but it can also attract top talent to your organization.
According to Harvard Business Review, sales force compensation is the single greatest marketing investment for most B2B companies, underscoring the importance of addressing this crucial aspect of business.
Myths About Sales Compensation Consulting
If you are looking into the prospect of sales compensation consulting, you’ve likely come across a lot of opinions and advice online. Although there are many factors to consider, you might encounter a few common myths time and time again.
Here is a look at some of the most persistent myths about sales compensation consulting and why they don’t hold water.
You Should Never Change Your Sales Compensation Plan
If a sales compensation plan is working overall, you might fall into the trap of believing that it is best not to change it, but this is one area where the saying “If it’s not broken, don’t fix it” does not apply.
Sales compensation plans need to be adjusted constantly to keep up with the evolving objectives of the organization and the industry in which you operate.
Sales Teams Are Only Motivated By High Payouts
People choose to go into sales because they are attracted by the prospect of high earnings, but that does not mean that high payouts are the only way to motivate your salespeople. In fact, overpayment can even be disruptive in some cases.
Instead, it is better to ensure that payments realistically reflect performance. You need to strike a balance between a payment that attracts and motivates salespeople and one that aligns with your budget.
Other incentives can also be appealing, such as paid time off. It can be useful to tailor certain facets of compensation plans to different types of salespeople; top sellers are motivated by different facets than core performers and those who lag behind. Accounting for these individual differences can increase the likelihood that a particular compensation plan will motivate every member of the sales team.
A Sales Compensation Plan Will Look Bad If It Is Not Perfect
One of the most nerve-wracking aspects of drafting a sales compensation plan is wondering how it will reflect on you. If it doesn’t work out and the team doesn’t reach its goals, will you look bad?
Although it’s natural to worry about this, it is hard to go wrong when your compensation plan is designed and implemented properly and senior management is on board. If you are unsure how to do this, sales compensation consultants can work with you to set yourself – and your team – up for success. Consultants have drafted these plans many times and have the experience and perspective needed to guide you on the perfect approach.
A Sales Compensation Consulting Firm Produces A One-Size-Fits All Plan
Many people mistakenly believe that sales compensation consultants use a one-size-fits-all plan. While using efficient approaches can work well in many types of businesses, no one knows better than sales compensation consultants just how poorly a cookie-cutter solution serves individual sales teams.
A good sales compensation consultant will collect and analyze information about your company and your current compensation practices to determine the best way forward. They should also take your company culture into account. This will allow them to come up with a compensation program that is fully tailored to the unique needs of your company.
Hiring Sales Compensation Consulting Is Not Worth The Money
In today’s hyper-competitive business world, companies are looking to save costs wherever possible. It might be hard to justify shelling out for sales compensation consulting, but a closer look at the potential benefits will highlight the incredible value that awaits.
A compensation plan that limits your company’s success can end up costing far more in the long run. While it is tempting for management to think they can figure out what changes are needed on their own, the outside perspective provided by sales consultants can make the difference between success and failure.
Talk With RCG About Sales Compensation Consulting
If you want to get the most out of your sales team and attract top talent, get in touch with the sales compensation consultants at RCG Workgroup to find out more about how their tailored plans can help your company get results.