Monday, September 20, 2010

High-Performance Compensation to Create Superstar Salespeople

In the last columns I shared a few Ingenious Sales Techniques to reach extremely difficult contacts, to breeze past the gatekeeper straight to the decision maker, and to coax the receptionist or administrative person to help you.

I want to turn our attention now to a different direction: sales management, the bane of many business leaders. This is the first of a series of articles on managing top sales talent. In this column we will discuss how to design a sales compensation plan for your company that powerfully motivates salespeople and supercharges results.

How to Motivate (or Create) Top Performers

After decades of designing and reviewing various sales compensation plans, I've discovered a few principles that hold true for salespeople universally. Here they are:

1. Commissioned salespeople will perform to maximize their pay. This sounds simple but salespeople are creative problem solvers. These people can be quite inventive and sneaky. Ensure you are incenting the correct behaviors or your reps will game the system.

2. Provide a living wage base salary that allows them to survive, and pay a handsome performance bonus. During the probation period, add a "non-recoverable" draw to their salary as necessary.

3. Incrementally revise their compensation plan so as the rep grows her sales volume, her commission percentage rises while her base lowers. Ultimately you want to wean all your people off of salary. Being 100% commission increases their confidence, empowers them, and makes them feel self-sufficient. It has several other benefits for the employer too.

Consult an expert to determine baseline levels for wage and commission percentages for your industry.  The best plans can not only help you pay reps appropriately. Properly designed plans can also help you interview and retain better reps and identify top talent.

How valuable would it be to identify future superstars? You can do it with a customized compensation schedule.

In the next column I'll discuss how to create an effective working environment for your sales reps. And in a later post I'll share how to create a metric-oriented process that helps you manage your people effortlessly. You'll learn how to engage your reps constructively and help them identify their problem areas. Then you'll help them get better without resistance. You'll also be able to use this Ingenious Sales Metrics technique to create an incredibly accurate Ingenious Sales Forecast.

Regardless if you're a new sales manager or an old pro, you'll want to learn this! Stay tuned. Until then,

profitable business All!

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