5 Secrets to Building a Motivating Sales Commission Plan

Common sense tells us that the more lucrative the compensation plan, the stronger the candidates you will be able to attract for a sales position. But the best plan one company develops may not work for another firm.

What one candidate for a sales job considers lucrative may be unacceptable to another.

Compensation plans work well when they are tailored to the following 3 factors;

• Industry
• Product
• Strategy/Sales Cycle

ISC’s team of Sales Recruiters has put together 5 key components to take into consideration when building a compensation plan for your sales team:

• How established is your company? Only the best, most confident salespeople can work on straight commission. Blue-chip firms have leverage and incentives – in-demand products, huge marketing budgets, state-of-the-art training, and a trusted brand – to attract these proven winners. Salespeople will not assume the risk of selling on straight commission when the product is unproven and demand unpredictable. The organization likely will have to assume a significant portion of the risk by offering compensation that includes a base salary.
• Is your industry growing or maturing? Companies in growth industries require hunters who relentlessly pursue new business and expand their territories. These are high-risk, high-reward personalities who are willing to forgo the base-pay safety net in exchange for fabulous income potential that high commission rates offer. Businesses in mature markets on the other hand will focus on maintaining market share. Their compensation scheme may be base salary-heavy, appealing to farmers whose strengths lie in cultivating relationships and extending sales to current customers.
• How long is the sales cycle? Companies that sell big-ticket items or highly technical products cannot expect their salespeople to wait through a months-long sales process for their commissions – no matter how large they are – before they get paid. The compensation must include a steady living wage during the process, ideally augmented by bonuses or commissions when the sales are finalized.
• One of the vast benefits of using an Executive Search Firm to identify candidates, is that they will typically be able to tell you what the compensation packages are for sales people from your direct competitors. This is invaluable information when you are creating your own incentives.
• It is extremely important to keep in mind that people have many different intrinsic motivators, and in terms of sales teams as opposed to any other group of employees, public recognition carries great weight, often times greater than financial compensation. Be cognizant of what rewards you can offer your top performers in addition to, or other than financial, and you may be able to attract some high performing individuals that crave the public accolades that their current manager is not providing. We recently conducted a search for sales professionals for a company that was targeting a teenage demographic, and therefore was employing young adults. By suggesting that they offer front row concert tickets to their top producing reps, they were able to entice the top performers from a few direct competitors to switch teams, while ultimately compensating them roughly 10% LESS than their current employer, all because they were able to figure out what motivated them, and then provide it. For a different demographic of workers, offering one day off per month be the best thing they could wish for. Other incentives that do not cost money are allowing top producers to dress casually, or being able to leave early on Fridays can be extremely motivating. Hiring house cleaning crews or pool cleaners, landscaping services and babysitters has also proven to be fantastically motivating carrots to dangle to entice super charged efforts.
•  For smaller companies, being able to offer incentives other than financial ones can be a very palatable way to compete with much larger firms with many more financial resources.
•  ASK and then LISTEN to what your sales people most crave, and then go about providing it. The ones that are most driven by their desire for their efforts to be acknowledged are exactly the ones that you want to target.

Ann Zaslow- Rethaber is President of International Search Consultants, a leader in Executive Search since 1999. ISC has teams of sales recruiters that focus on 4 primary industries: Software Sales Recruiters, Paints and Coatings Sales Recruiters, Medical Device Sales Recruiters, and Food & Beverage Sales Recruiters.

Please reach out to ISC today to strategize on your ideal sales candidate profiles and to initiate a search, in order to have a strong pool of exceptional candidates delivered to your interview table.

You can reach the Ann directly at [email protected] or via phone at 888-866-7276.

Kara Onorato is Director of ISC's team of Software Recruiters. Kara can be contacted via direct dial at 877-316-6249 or e-mail at [email protected].

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