Sales compensation plans are key for businesses

With the new year now around the corner, many business owners will be mulling over what to do with their sales compensation plans. This is something to think long and hard over since it can be such a critical business decision. The best sales compensation plans are a strong motivator to your sales force and it will help you draw the best salesmen, who in turn will get you the best business which in turn means that your bottom line will be the best that it can be. But coming up with the right sales compensation plans are never easy. It is a specialized skill and if you have the right level of expertise, go for it. If you don’t, take a step back and let the experts handle it for you. They can come up with ideas that are perfectly suited to your business.

Consider a few thoughts to get you started with sales compensation plans in the right direction.

Reward your stars and they’ll reward you

Don’t be stingy with the rewards you give out. Create a plan that recognizes the best performers in your group and reward them for being outstanding in their work. Let’s say your staff has a quota of $100,000 per month to fulfill and most of your staff should be outperforming that figure by 5 to 10% if they are good sellers. But there will be those that rake in $175,000 in sales each month while others will get in $150,000 each month. Incentivize performance in tiers then, with a slight reward available for outperforming the standard sales quota by up to 10% with greater rewards for greater performance. Obviously, those getting $150,000 will not get as much by way of reward as the person selling $175,000 each month. Creating these reward tiers will entice those top performers to at least maintain if not improve on their performance.

Hold a sales contest

Keeping aside a portion of sales aside each month for a sales contest is a great idea. You could either offer cash bonuses and gifts or you could give something in kind. A rep winning tickets to a movie or a concert or even a gift certificate to a popular store makes a big difference to morale among the sales force. They end up feeling good about the business that they are working for and they feel good about the job that they are doing. And this reflects in their performance. I have often observed that sales representatives stick longer with companies that hold sales contests and incentivize sales a lot.