What are the most effective compensation and incentive strategies for outside sales professionals?

2 Balance salary and commission

Another key factor in designing a compensation plan for outside sales professionals is to balance the fixed and variable components of their pay. Fixed pay, such as salary and benefits, provides stability and security for salespeople, especially during slow periods or economic downturns. Variable pay, such as commission and bonuses, provides incentive and recognition for sales performance and results. The optimal ratio of salary and commission depends on several factors, such as the industry, the product, the market, and the salesperson's experience and skills. Generally, a higher commission rate is more suitable for high-value, long-term, and complex sales, while a lower commission rate is more appropriate for low-value, short-term, and simple sales.

3 Offer non-monetary incentives

Besides monetary compensation, sales operations managers can also offer non-monetary incentives to outside sales professionals, such as recognition, feedback, coaching, training, career development, and work-life balance. Non-monetary incentives can enhance salespeople's motivation, satisfaction, loyalty, and performance by addressing their intrinsic and extrinsic needs and values. For example, recognition can be given through awards, certificates, badges, or public praise. Feedback can be provided through regular reviews, surveys, or peer-to-peer evaluations. Coaching and training can help salespeople improve their skills, knowledge, and confidence. Career development can offer opportunities for advancement, learning, and growth. Work-life balance can support salespeople's well-being, health, and happiness.

4 Customize compensation and incentives

Finally, sales operations managers can also customize compensation and incentive plans for outside sales professionals, based on their individual preferences, characteristics, and behaviors. For instance, some salespeople may prefer a higher salary and a lower commission, while others may prefer the opposite. Some salespeople may value recognition more than money, while others may value money more than recognition. Some salespeople may respond well to gamification, contests, or challenges, while others may find them stressful or distracting. By customizing compensation and incentive plans, sales operations managers can tailor them to the specific needs, goals, and motivations of each salesperson, and increase their engagement, commitment, and productivity.