3 Effective Principles for performance based compensation

Improve Sales Performance: Pay for performance based compensation | Sales rewards

Is your sales organization not promoting a new product or service? Is sales focusing efforts on the install base instead of focusing on new customers? Then its a time to adopt pay for performance compensation model. How do you improve employee sales performance? How do you increase sales? Are they competing with channel partners instead of assisting them in executing the marketplace? Are they focusing on one product or service more than another? These are common complaints you might hear from a VP of Sales or CEO. If you want to improve your sales performance seriously, you must pay your sales teams to behave. Here are 3 effective principles for perfomormace based compensation that every organization must adopt. 

Firstly, How do you review sales performance?

I recently had a conversation with a client CEO who had concerns about his sales team's recent performance. The paraphrase of his sentiment was:

"We just launched new an entire wave of new products, and the engineering has never been better. We trained all the salespeople on the new offerings, which was a considerable investment, but the products are not moving. I am considering replacing sales management to address this issue, but that also is extremely expensive."

I asked a simple question, "May I look at your compensation plan?"

His startled response, "What does that have to do with making changes to my organization?"

I said, "Everything."

Here is sales manager tips

Professionals choose the sales profession for a variety of reasons.

• The opportunity to make money.
• Recognition for a job well done.
• Since of teamwork and mutual achievement.

Also Read: How to Successfully Use Salesforce for Sales Management

All people work to make money. That is why it is called "work" and not "fun." Sale people are compensated based on their performance i.e. performance based compensation. They are your company's face to your customers, prospects, and partners. A sale is a mission-critical function of most organizations. With no sales, you do not exist.

To get those new products out the door and into customers' hands, start with the compensation plan. Pay your sales organization to behave. It is a perfect symbiotic relationship, exists already, and is far less costly than replacing valuable employees.

Let's look at how you can take what motivates a sales person and overlay a compensation structure and recognition program that will create a stimulating environment.

What are 3 general ways to increase sales?

Motivator: Performance based compensation

• Incentive programs for selling those new products
• A bonus for completing the education program on new products

Motivator: Recognition

• Companywide recognition program for top sales performance in selling the new offering
• Regional pay for performance compensation recognition for selling new offering

Motivator: Since of Team

• Communicate company vision frequently
• Communicate a go-to-market plan for new products and offerings
• Take it to the competition!
• Foster an environment of contribution, winning, and belonging to something special.

Also Read: 5 Ways A CRM Solution Can Improve Your Own Sales, customer relationship management strategy

A word of caution, it is a fallacy to think salespeople are only motivated by money and or is motivation marketing. Salespeople are like athletes for business. Salespeople are almost always competitive, assertive, and self-motivated. They do not like a failure and will leave for greener pastures if they do not feel their skills are fairly compensated and recognized even after thier best performance. Great salespeople will take risks if the sales rewards are sufficient.

Good luck out there!