3 years ago
January 6, 2015

The Fundamentals of Sales Compensation Design – Communicating Through Sales Compensation

SalesForce Search specializes in sales recruiting and sales compensation design

Rhys Metler

A well designed sales compensation plan will accomplish many things: motivate your sales team to increase sales, reward them for strong results, and retain your top performers. However, there is one important aspect of sales compensation design that is often overlooked: sales compensation plans should clearly communicate the focus of each sales job. Once a member of the sales team develops an understanding of the sales compensation plan, they should have full understanding of what activities they should be focusing on. In fact, if done well, a sales compensation plan should replace the traditional job description for sales jobs.

 

This type of communication can be achieved by the company weighing their sales compensation plan to payout higher rewards for the most desired activities. For example, if an organization wants to focus its sales team on developing new business, the sales compensation plan should be designed to pay out more commission for acquiring new accounts than for renewals. Sales people are driven by money, so when compensation is attached to certain activities and results it adds weight and gets their attention.

 

It’s also important to customize the sales compensation plan for each job. By doing so the company can clearly communicate the key activities and deliverables for each sales job. The commission for an account executive role focusing on “hunting” should be more heavily weighted on closing new business. And in comparison, the commission for an account management role should be more heavily weighted on customer retention and renewal measures.

 

Sales people will naturally spend more time and energy on the activities that will earn them more money – so it’s important that companies clearly define what their business objectives are make sure their sales compensation communicates those objectives to their sales team.

Rhys Metler

Rhys is a tenacious, top performing Senior Sales Recruiter with 11+ years of focused experience in the Digital Media, Mobile, Software, Technology and B2B verticals. He has a successful track record of headhunting top performing sales candidates for some of the most exciting brands in North America. He is a Certified Recruitment Specialist (CRS) and has expert experience in prospecting new business, client retention/renewals and managing top performing sales and recruitment teams. Rhys enjoys spending quality time with his wife, son, and two daughters, BBQing on a hot summer day, tropical vacations and cottaging.