How can we establish a competitive sales compensation package?
We interviewed a salesperson whom we would like to hire. The current compensation package they receive is very comprehensive and if we wish to compete with that we would like some advice about how to establish and offer a better sales compensation package.
We know that compensation is an important factor for the success of a sales team but this has to be well determined.
It's impossible to develop a plan without knowing more about what you're doing, the sales cycle, the dollar volume and margins involved in your specific sector and product. I know… sensitive information!
Knowing technical details such as – cycle time is critical. Without exaggeration, I've seen sales cycles that are more than 12 months long and the entire start to finish is measured in years and other sales cycles that are measured in hours, days, and weeks.
It also depends on the amount of work the salesperson is doing? Is there a team involved, is there significant work by others involved? Technical drawings, engineering, proposals, extensive estimating and modeling?
Details aside, your philosophy is extremely critical to the success of the salesperson.
Assuming that you have a phenomenal hire and a great training onboarding and training program set up, you want this person to have the ability to make a significant income. Can the person make a significant income? What would that look like? As an example, if it took 5MM for the salesperson to make a significant income, what would be required in the financial and operational side of the business? Is that achievable or would that cause major disruptions?