Sales Compensation Plans that Work

Good sales management helps you sell more; keep your best people

By Daniel Kehrer, Founder & CEO, BizBest Media Corp.

A great sales team – and the right compensation plan to keep sales people motivated – is critical to helping a business grow and prosper. What's more, competition for top sales people is intense, and having a well-designed sales management program to attract and keep sales talent can spell the difference between success and failure.

There are many sales management variables to consider and the best mix will differ from business to business, and industry to industry. Typically, a well-structured sales compensation package includes:

A base salary
Commission – either a percentage of the gross sale or based on profit margin
Sales bonuses for reaching established goals or milestones.

An increasingly popular choice is an on-demand (web-based) sales compensation management solution that integrates with Salesforce.com and other CRM systems -- something that goes well beyond simply calculating commissions and bonuses.

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Go with experience in on-demand sales management

Centive, founded in 1997, has received numerous industry awards for its sales management prowess and tech innovation.
Try: Centive's (now Xactly) online sales compensation management system, Compel, is worth looking into. It's become a top web-based choice among small and mid-sized businesses and features a Compensation Plan Builder that lets you build, test model and release a compensation plan via a structured process that requires no internal IT resources. Special dashboards display real time data, and it can be fully integrated with Salesforce.com and other customer relationship management solutions.

An affordable web-based solution for small business

Dump that spreadsheet and go high-tech. Tap a total internet solution that can help you design and implement a new plan, change or update a plan, manage a plan - in short, do what's necessary to assure your approach is the best it can be.
Try: Xactly Corporation offers affordable, state-of-the-art, on-demand sales compensation solutions.

Get software to do it for you

Software designed specifically to help you calculate and track commissions and bonuses can be a big time saver for a small business.
Try: QCommission is sales compensation software that integrates easily with QuickBooks or can be used independently.

Call in the consulting cavalry

Fast growing companies may need specialized consulting help to create a successful sales compensation plan.
Try: Compensation Resources, Inc. creates programs to attract, retain and reward outstanding sales talent.

If you have different types of sales jobs, create a unique compensation plan for each type.
Avoid annuity type compensation that continues to pay commissions for no additional work on the sales person's part.
Reward sales results, not just effort.
Establish quotas that you think 70 percent of sales people can make.
Monitor your program continuously to make sure it's working and there are no abuses.