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Sales Compensation
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Sales Compensation
Sales compensation is a challenging topic for many people because they think in terms of absolutes. The most commonly asked questions tend to be along the lines of, "What is the standard (salary, draw, commission percentage) for (an industry, product or service, geography)?" Unfortunately there are very few "standards" that apply to sales compensation. The variations in sales compensation plans are infinite, and there is little published research that provides compensation details (salary or draw + commissions + bonuses + other incentives) by industry or geography. This makes sense when you think about it - if a company has managed to develop an effective sales compensation plan, what incentive do they have to share it with others? The resources in this section will help you develop a sales compensation plan that:
- Takes into account the profitability of your company's various products and services, and
- Motivates desired sales behaviors.
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6 Common Reasons Why Sales Don't Close: Reasons #5 and #6 - Disconnects
by Alan Rigg
This video examines the final two reasons why sales don't close. Both of them relate to disconnects; specifically, the disconnect between the desired close time frame and the mix of opportunities in a salesperson's pipeline, and the disconnect between sales cycle length and how the sales compensation plan is structured. . . .
keep reading
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Sales Compensation Introductory Video
by Alan Rigg
In this video Alan Rigg discusses why developing a successful sales compensation plan can seem so intimidating and several key factors that will impact the success of your sales compensation plan. . . .
keep reading
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100% Commission Equals Zero Percent Control
by Paul Johnson
When you shift risk to salespeople by adopting a straight commission plan, you may in reality be risking your business. Either you pay a salary and then plan on actively managing and developing your salespeople for success. Or, you pay straight commission, save the salary, then pay big dollars to replace unproductive personnel while you forfeit sales opportunities lost by ineffective salespeople. . . .
keep reading
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Sales Compensation: Why 100% Commission Plans Don't Work
by Alan Rigg
Many companies make the mistake of using 100% commission sales compensation plans. Why do they do it? They feel a 100% commission plan will minimize their financial risk, as no sales made means no commissions paid. Besides, any salesperson that is any good should have enough faith in their own ability to work on 100% commission, right? Wrong! . . .
keep reading
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