In most fields, the topic of compensation is pretty straightforward. An employee will be offered a specific salary or hourly rate, and they’re paid a predictable amount upon completing their obligations at regular intervals. When it comes to compensating salespeople, however, it’s a far different story. Because sales compensation is directly tied to performance, there are a lot of moving parts that go into determining how much a salesperson will bring home. Moreover, compensation plans must constantly be adjusted to ensure that salespeople are being compensated fairly and are motivated to be productive and stay with your company.
HubSpot reports that 43 percent of workers say they would be willing to leave their current company for a 10 percent salary increase (1). In other words, a poor sales compensation plan could see nearly half your sales team walk away, which is why getting this right can make or break your company.
What Is a Sales Compensation Consultant?
Coming up with the right sales compensation formula can be complicated, and there is so much at stake. Sales compensation consultants are often brought in to show businesses the way to keep their salespeople happy.
A sales compensation consultant can help your company develop a comprehensive compensation package that will enable salespeople to connect rewards to their achievements, which can provide incredible motivation and enhance production.
Remember: your salespeople’s compensation is an investment rather than a cost. When you think of it merely as an expense, it can be hard to see the strategic role that rewards should play in the process. Sales compensation is not just a question of how much you should pay but also how you need to compensate your salespeople. Much like your financial investment portfolio, the focus needs to be on which pay programs to include in your company’s compensation portfolio and how much weight each one should be given.
Why You Should Hire a Sales Compensation Consultant
Working with a sales compensation consultant can help you ensure that the compensation you’re offering your team aligns with your objectives. It can be hard to find the right balance on your own, but consultants often have decades of sales management experience and know the right ways to strengthen morale and offer appealing incentives.
Some companies might attempt to find their own solutions, and they may indeed succeed to some degree. However, the cost of failure in this regard can be tremendous because it includes wasted time for management and training, expensive recruiting, damage to your credibility among current and prospective employees, and the value of lost opportunities. Consultants are able to hone in on the problem and quickly develop good solutions because sales compensation is their sole focus.
They Can Dedicate Their Time to Your Sales Compensation
Your company’s management already has a lot on their plate. Your focus is on growing the business, keeping things running smoothly and putting out fires, and there’s a good chance that your to-do list has no end in sight.
Giving the matter of compensation the time and effort it deserves simply may not be feasible, and one mark of a good leader is knowing when to outsource tasks that are not a good use of your time to the experts.
They Have Experience in Sales Compensation
Another reason sales compensation consultants can get far better results than a business’s management is the experience that they have acquired by handling similar problems across a broad range of clients and seeing how various approaches turn out in the long term. Consultants come equipped to make good decisions without having to spend any time reinventing the wheel.
They Are Objective
Despite your best intentions, it is impossible for you and those within your organization to be truly objective on the topic of sales compensation. You already know the players, and it can be hard to keep emotions out of the equation. Plus, your salespeople’s compensation may have an effect on your own pay, which definitely impacts your objectivity.
A consultant can give you unbiased solutions to the issues your company is facing and offer alternatives that will meet your company’s needs and abilities without being tempted to benefit themselves.
Assist From Start to Finish
Many factors go into sales compensation, and it is a far bigger job than it sounds on the surface. It involves research and market data, not to mention knowing how much and what kind of data to use to make the decision and how to evaluate it. A company’s management is often unable to give this very complex assessment of the commitment needed to do it successfully.
Reach Out to a Sales Compensation Consultant
If you would like to learn more ways that you can encourage your sales team and drive your business to greater heights, reach out to the sales compensation consultants at RCG Workgroup to learn more about their services.