How effective is your sales compensation plan? Does it help in generating good amount of revenue? Are you able to keep your top performers? If you are sales compensation plan is not efficient or if you are not satisfied with your compensation plan, then you might be facing one or more sales compensation pitfalls. Given below are the few commonly faced pitfalls and their effective solution:
1.One size fits all: Well having a uniform compensation plan may sound good, but it is rarely effective especially in the large firms. Unless you recruit all the salespeople with same work experience and are hired to do the same job, compensation won’t be an issue. Factors like size of the sales territory, revenue potential of the territory, experience of the salesperson, usually necessitates some changes in compensation plan.
Solution: Make sure your compensation plan fits the various needs and demands of your people, the job, and the company’s goals.
- Playing games with people’s paychecks: the quickest way to destroy the trust and de-motivate a salesperson is by not providing him/her the desired paycheck. If there is any change, mistake or adjustment in a paycheck, it will be good that you handle that matter quickly and provide a proper explanation. If you changing the pay plan make sure you inform your sales people before rolling it out. In case you miscalculated the bonus or commission, rectify them immediately.
Solution: Be honest, direct and responsive in all actions that directly put an impact on salespeople’s actual paycheck.
3.Discouraging beginners: learning sales techniques take time, especially in the case of rookies who are still in the learning phase. Well it is obvious that new salespeople will make fewer sales compared to the experienced ones. It will be good that you don’t discourage them and give them good time to learn and move forward.
Solution:It will be good that you create a compensation plan that helps salespeople make the financial transition from rookie to an experienced salesperson.
Make sure that you properly review each and every factor before making your compensation plan.