Sales Compensation Design- For an organization to achieve its goals, it should have a strong sales management. The sales team needs to be continuously motivated to sell the products/services of the organization. This requires that the sales team be rewarded accordingly with an attractive sales compensation plan consisting of incentives and bonuses. It is very important to design an attractive sales compensation plan to keep the sales force motivated. These are the keys to design a strong sales compensation plan:
- Assessing the needs: Before designing the compensation plan it is necessary to assess the effectiveness of the existing plan. It is to be assessed to see if it is in line with the accomplishment of the goals of the organization. If the result is not satisfactory then an assessment should be made about what changes need to be brought in the existing plan.
- Setting compensation plan objectives: The organization needs to assess what it expects from the new plan to accomplish i.e. growth, greater service, profitability or greater customer focus. The organization should keep in mind not to focus only on short term financial issues.
- Defining the sales representative’s role: The Company needs to define the role the sales representative’s play in finding, cultivating and keeping customers and needs to assess what challenges they face.
- Establishing the pay range: The Company should determine what it can afford to pay and how competitive it wants its pay structure to be. This should also be planned on the basis of where the new representatives worked earlier and what organizations the representatives quitting are joining. This will provide insights into some of the most basic elements of making your sales compensation plan more competitive.
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