Sales compensation strategy is certainly unique for any type of business. These sales compensations help sales leaders to motivate their sales team to drive the business sales for long term and to help improve their sales performance through better processes.
A sales compensation strategy is very critical in attracting your salespeople to maximize their sales productivity.
Yet there are still many organization and businesses fail to use the powerful tool to drive their sales growth which is earthier due to dysfunctional execution of poor design.
A winning sales compensation strategy is carefully tailored to the sales job and to the business market strategy. It is very important the internal business processes, the technology, and the design of the compensation strategy are all align so that performance feedback and pay checks are accurate and timely.
There are several factors that can render the sales compensation plan ineffectively which are poor communication, weal execution, and perpetual design.
To avoid all these things to happen you have to six key features on effective sales compensation strategy.
• Relatively speaking it pays more on what you want to sell more off and pays less on what you want to sell less. If you pay the same compensation on all your products or everything you sell you are only giving your sales team an idea that you don’t care which product they have to push.
• Pay a lot for sales that will bring more earnings to your business. It indicates that must understand which products are gaining revenue and which are not. It is very important to know your profit margins otherwise you will have compensation and accounting issue.
• Here no limit on your salespeople earning capacity. Creating powerful incentives will keep your salespeople selling and reaching your goals. Powerful incentives will keep your salespeople selling even if they have reached their quota. You can do it by doing things that will excite your people to take full speed ahead in sales earnings.
• Award incentives as close to the pay endings. The idea of strengthening your salesperson sales will be disregarded if you pay commissions away from pay endings. It is best to pay the commissions monthly so that their sales effort will go straight ahead.
• Add bonuses to commissions. Except from commissions it is better to give your salesperson extra bonuses. Give your top salesperson for their exceptional success and not for the routine performance. You give bonuses every quarter of the year or annually.
• Make it easy for your salesperson to understand the sales compensation. Gather your people from time to time and explain to them your sales compensation strategy. It is best that they understand it so that they will not feel being taken advantage on the benefits they should get.
The best sales compensation strategy should be as simple as it can be so that your sales team will fully understand it. In addition, never compensate for poor sales management people.
This will only create a bias treatment between your sales team. Plus, sales compensation strategy will not be possible if you do not have better business strategy.
So keep up making better marketing strategy so that your products will be popular and your salespeople will find it easy to push your products for higher revenues.