Not having to work for a large portion of their incentive pay weakens the motivational power of employees’ incentives.
In reality, however, many of the commissions and bonuses companies pay sales people aren’t truly at risk — and as a result, the company may be spending money in ways that produce little in the way of extra effort or motivation.
Pay mix – the ratio of fixed pay (base salary) to variable pay (incentive or at-riskpay) – is commonly used to gauge the extent to which a sales compensation plan motivates sales people to drive current results. A 60:40 pay mix is the average for sales forces, but the mix varies across industries and sales roles.
A very aggressive mix (say 0:100) is common in industries such as insurance that use independent contractors as sales agents. A less aggressive mix (say 75:25) is typical in industries such as pharmaceuticals that want sales people to focus on customer education, and for technical sales jobs that have a large problem-solving component. Within an industry or company, pay mix often varies across sales roles. One technology company targeted a 50:50 pay mix for sales people in new customer acquisition (CA) roles, but a 70:30 mix for sales people in account management (AM) roles. This encouraged the CAs to ‘hunt,’ while the AMs focused on cultivating relationships with existing customers. Generally, it’s believed that an aggressive pay mix (i.e. a high second number) motivates sales people to drive short-term results.
Bu hikaye thinksales dergisinin November 2017 - January 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye thinksales dergisinin November 2017 - January 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Getting Over Your Fear Of Cold Calling Customers
A recent research study found that 48% of business-to-business salespeople are afraid of making cold calls.
10 Tips To Get Honest, Productive Feedback
Great leaders are great learners. Their never-ending pursuit of information pushes them to constantly improve and sets them apart from the rest. Getting and learning from feedback isn’t always easy, but it is necessary, if we want to become better.
The 5 Things All Great Salespeople Do
The best salespeople know they’re the best. They take pride in their art form. They separate themselves from the rest of the pack regardless of circumstance. So how do they do it? What’s their secret? Are you one of them?
Why Trade Shows Are Worthy Of Your Marketing Budget
Given unrealistic expectations against a modest budget, marketing leaders are routinely tasked with making trade-offs on what stays and goes in their annual budget. In a highly digitised world, trade shows might seem like the ancient way to do things, but they remain one of the best forums for exposure to customers. Increase your success rate with trade shows through more thoughtful planning that aligns sales and marketing to common goals and objectives.
Why CRM Projects Fail And How To Make Them More Successful
CRM is an important tool, but it is just a tool. When the laptops are shut down for the day, it’s your sales team that is responsible for bringing value to clients and driving revenue. Implement your CRM with that in mind and you’ll be pleased with your ROI.
Is Your Corporate Strategy Paying Off?
Key questions to determine if your strategy is working.
3 Ways to Improve Your Ability to Diagnose
Selling requires a strong ability to diagnose the client’s problems and challenges.
How To Create Compelling Content
How do you create content that cuts through the noise? How do you get attention now that there is a glut of content being created?
Build Up Your Resilience By Asking Yourself Two Simple Questions
You may surprise yourself and find good in the bad.
How Marketing Can Increase Customer Lifetime Value
Marketing can play a pivotal role in boosting customer profitability.
