Top 5 Elements Of A Sales Compensation Plan
Posted: Mar 28, 2015
Owning sales based business can be a very difficult task, but one that is well worth it in the end. The main objective of any sales based business is to complete as many transactions as it can, which will take a team running together. The larger your company becomes, the more people you will have to hire. In order to attract more people to the positions you have, you will need to offer a good work environment and a great sales compensation plan. There are a number of different elements that go into a great sales compensation plan and taking your time to perfect yours is a vital part of keeping your business viable.
With all of the many elements that go into a compensation plan and making sure you cover all of your bases can be a lot easier said than done. For most business owners, finding software to simplify this process can be a lot more conducive to their needs. At CornerStone Software, you will be able to get one of the best software programs out there for commissions’ estimation and calculating. The following are a few of the elements to consider when trying to get the right sales compensation for your company.
Developing the Right Strategy
The first thing you will need to lay out in your plan you give to employees is the main goal and strategy of your business. You need to make sure that the employees you are hiring have a clear vision of what you are trying to achieve so they can get with the program right away. The more information you are able to give them regarding what you are looking for and what is expected of them, the easier it will be on everyone involved. Be sure to work with a law professional to make sure all of your bases are covered and that the language that is used is legal and representative of what you are trying to accomplish. The last thing you want is to have unanswered questions by your new employee, which is why you will need to work on this part of the plan to make sure it is both iron clad and descriptive enough.
The Performance Details
The next thing you need to think about when trying to put an adequate compensation plan into place is the details regarding the performance and benchmarks you have. The employees you have will need to know this because this is how they will be paid. Be sure to give some thought on the sales goals and how easy or hard it will be for your team to achieve. The last thing you want is to put goals in place that are unattainable due to the confusion and contempt it may cause. By having everything spelled out regarding the way the employees will earn their commissions, you will be able to avoid any issues in the future. If you are unsure about what needs to go into your plan, then you will need to speak with a more knowledgeable professional in your line of work. You should be able to talk to them and get some advice on your best course of action. Neglecting to reach out for help during a situation like this will usually lead to disastrous consequences and may lead to litigation in the future. The time and effort yo
u put into seeking out professional help will be more than worth it in the end.
The Formula for Payout
Another very vital thing you need to think about when trying to come up with the right sales compensation plan is the formula of how you will pay. You need to figure out how much product or service a salesman has to unload before they get paid out and how much the payout will be. This will give your sales staff a clear picture of what they need to do in order to earn the commissions you are offering. By giving your employees all of this information, there will be no mystery when the hiring process goes on. The last thing you want is hurt feelings due to lack of information regarding the payment process.
Frequently Asked Questions
The next thing you need to focus on when trying to find the right balance on your sales compensation document is the frequently asked questions that people may have. The more you are able to let your employees know, the easier it will be to keep them in the loop regarding the operation of your business. Make sure you take your time to review the most asked questions and then answer them in this section. Be sure to update this section frequently to keep it as up to date as you can.
The Follow Through
The last thing you will need to layout in your sales compensation plan is how it will be carried out in detail. You need to put in the penalties that will arise should the terms of the contract or plan not be varied out. The more detail you are able to give, the easier it will be for your new employees to follow. If you leave any doubt or stone unturned in the plan, you may be in for a rough time. You need to read and reread the plan to make sure all of the bases are covered. If the employees have any questions regarding the document, then you need to do all you can to address the concerns in a timely and efficient manner. This will show them that you are serious about your business and their part in it.
By taking this time to get your compensation plan ironed out and right, you will be able to get the employees you need to grow your business. Make sure you take some time to look at the details of your compensation to make sure that they are understandable and enticing to a business professional looking to make a move.
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