Few things can spur sales performance quite the way that the right sales compensation plan can. It’s human nature to respond positively to rewards, yet many sales leaders are not confident that they have a truly effective plan in place. Sales compensation consulting can help management assess the key issues that go into compensation to develop a plan that will get results.
What Is Sales Compensation Consulting?
Compensation is an important aspect of attracting top talent and keeping them on your sales team over the long haul. That is why getting your sales compensation plan right is so important to your success.
Sales compensation refers to the amount of money that a salesperson is paid, including their base salary, commission and any additional incentives. It can be very challenging to strike the right balance when developing a sales compensation plan, and some salespeople can be quite good at taking advantage of loopholes in your pay structure. That’s why you need to give your plan serious thought.
Sales compensation consulting provides expert guidance in creating a strategy that will drive your sales team’s performance and allow them to raise revenue. Consultants know the best ways to encourage positive behavior across your team.
The specific components of a good sales compensation plan will vary by industry. For example, some businesses will find that a higher base salary works better, while others might prefer to prioritize commission according to their targets, business structure or budget.
What Goes Into Sales Compensation Consulting
Sales compensation consulting is a complex undertaking that usually begins with a thorough analysis of your company’s current compensation, operations and goals. Consultants will look at your budget and company culture as well as what the competition is paying and the living costs in your area to come up with a winning strategy.
Here is a look at some of the components of sales compensation consulting.
Clearly Defining Sales Expectations
The main purpose of a sales incentive plan is to clearly define sales expectations and indicate the financial rewards that will motivate individuals to take initiative and use the effort and skills needed to convert prospects into buyers.
Your sales team needs to know exactly what they need to accomplish. Is your goal to increase sales of a particular product, for example, or close more deals during the beginning of the month? It is important to be as specific as possible here and ensure the incentives drive the behavior needed to achieve your goal.
Sales compensation plans should be relatively straightforward and simple, as those that are too complex or cumbersome often fail. The plan needs to be easy enough to understand for salespeople as well as those in charge of tracking performance and administering the program.
Help Creating Goals That Are Realistic But Challenging
Determining the sales compensation plan goals is the first step many sales compensation consultants will carry out. Studies have shown that those who write down their goals are 33 percent more successful at achieving those goals than people who simply formulate them in their head, so this step can make a surprisingly big difference to your chance of success.
Some of the primary goals that businesses identify for their sales compensation plans are to improve cash flow, increase the average deal size, raise their percentage of repeat customers, or do more upselling or cross-selling. They may also have secondary goals, such as driving the sales of a specific product, attracting a certain target customer or lowering their overall expenses.
Once the company’s main goals have been clearly laid out, sales compensation consultants will help establish sales goals that are realistic enough to be achievable yet challenging enough to push salespeople to try harder rather than skating through their work and collecting their bonus.
Ensure Tracking Is Accurately Being Measured
Tracking and measuring salespeople’s performance accurately against the expectations laid out in your compensation plan is the best way to see if your sales agents are working efficiently. Therefore, it is essential that they are monitored consistently, so identify areas of weakness that can be resolved before they become even bigger problems.
Assistance In Choosing Rewards For Achievements
There is no question that money is always a good motivator. A compelling monetary incentive can go quite far.
However, rewards for achievements don’t always have to involve cash. Some salespeople can get extra motivation from the prospect of paid time off, sporting events tickets, public acknowledgement of their achievements, travel vouchers, team dinners or even a prime parking spot at the office.
Action Plan For Modifying The Strategy When Needed
Once the plan has been put in place and your sales team has started using it, you’ll need to compare the results you’re getting to those you were aiming to achieve when you launched the plan. If not, sales compensation consultants can help you look at the data to figure out where improvements can be made to turn things around.
Ways To Keep Sales Team Informed
Communication is vital for keeping sales teams informed about what is expected of them, and sales compensation consultants can make sure everyone is on the same page when it comes to the sales compensation plan and how progress is being tracked and recorded.
Work With RCG For Sales Compensation Consulting
If you’re looking for more ways to motivate your sales team to aim higher, get in touch with the sales compensation consulting experts at RCG Workgroup.