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home | Sales Compensation
 

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:

  1. Takes into account the profitability of your company's various products and services, and

  2. Motivates desired sales behaviors.

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
Sales Compensation Video Series: How to Develop an Effective Sales Compensation Plan
by Alan Rigg
Sales Compensation Video Series: How to Develop an Effective Sales Compensation Plan

Learn how to develop a sales compensation plan that will motivate your salespeople to do what you want them to do! Plus, many of the concepts discussed during this video series apply equally well to developing sales manager compensation plans.

. . .
keep reading
Sales Compensation Video #6: For More Information
by Alan Rigg

Now that you've completed the sales compensation video series, do you have any questions? If you do, this video will show where you can access additional information and assistance.

. . .
keep reading
Sales Compensation Video #5: 9 Steps to Effective Sales Compensation
by Alan Rigg

In this video, Alan Rigg walks you through his 9-step process for developing effective sales compensation plans that has been used successfully by hundreds of companies.

. . .
keep reading
Sales Compensation Video #4: Why Incentives Fail + Incentives That Work
by Alan Rigg

This video examines why incentives fail and how to design incentives that produce the desired results.

. . .
keep reading
Sales Compensation Video #3: Revenue vs. Gross Margin
by Alan Rigg

This video explores whether commissions should be calculated based on revenue, gross margin, or some other number, and how sliding scales can help maximize profitability.

. . .
keep reading
Sales Compensation Video #2: Income Floor Alternatives
by Alan Rigg

This video examines three different alternatives for providing an income floor: salary, recoverable draw and non-recoverable draw.

. . .
keep reading
Sales Compensation Video #1: Why 100% Commission Plans Don't Work
by Alan Rigg

This video explains why 100% commission compensation plans don't usually work, plus the one situation where I have seen them work. . . . keep reading

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
Audio Recording: Guest Expert Interview with Bob Dawson - Sales Incentive Programs That Drive Bottom Line Results
Audio Recording: Guest Expert Interview with Bob Dawson - Sales Incentive Programs That Drive Bottom Line Results

By listening to Bob's interview you will learn: How to construct a sales incentive program that your CFO and Banker will love to support; How to increase sales, especially in a down economy, while preserving cash and improving profitability; How to eliminate the "sugar high" sales incentive programs and replace them with "behavioral change" sales incentive programs that produce long-term growth.

. . .
keep reading
100% Commission Equals Zero Percent Control
by Paul Johnson
100% Commission Equals Zero Percent Control

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
Audio Recording: Guest Expert Interview with Doug Wheeler - Incentive Programs in the New Economy
Audio Recording: Guest Expert Interview with Doug Wheeler - Incentive Programs in the New Economy

By listening to Doug's interview you will learn: A brief overview of the 5 W's of Incentive Programs; How the 2009 economy altered the incentive travel landscape; What trends are forecasted for incentive programs for 2010 and beyond; Unique industry practices to guarantee successful incentive programs in the new decade and the New Economy

. . .
keep reading
SPECIAL REPORT: How to Develop an Effective Sales Compensation Plan
by Alan Rigg
SPECIAL REPORT: How to Develop an Effective Sales Compensation Plan

Learn how to develop a sales compensation plan that will motivate your salespeople to do what you want them to do!



. . .
keep reading
Sales Compensation: Should You Calculate Commissions on Revenue or Gross Margin?
by Alan Rigg
Sales Compensation: Should You Calculate Commissions on Revenue or Gross Margin?

A common question is whether sales commissions should be calculated based upon revenue or gross margin. The answer is...it depends.



. . .
keep reading
Sales Compensation: Should You Pay a Salary or a Draw?
by Alan Rigg
Sales Compensation: Should You Pay a Salary or a Draw?

Sales compensation plans that attract and motivate quality salespeople usually include some type of "income floor". The question is, which type of income floor produces better results - a salary or a draw?

. . .
keep reading
Sales Compensation: Why 100% Commission Plans Don't Work
by Alan Rigg
Sales Compensation: Why 100% Commission Plans Don't Work

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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