{"id":8222,"date":"2013-01-30T04:57:30","date_gmt":"2013-01-30T04:57:30","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=8222"},"modified":"2024-04-12T14:14:11","modified_gmt":"2024-04-12T08:44:11","slug":"sales-compensation-plans-and-issues","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/sales-compensation-plans-and-issues\/","title":{"rendered":"Sales Compensation Plans and Issues"},"content":{"rendered":"
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\"Sales<\/a><\/figure>\n<\/div>\n\n

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Sales Compensation Plans and Issues-<\/strong> FOR SOME decades now, marketing textbooks and professors have assiduously distinguished between sales and marketing. Theodore Levitt\u2019s 1960 definition is still the classic: \u201cSelling is preoccupied with the seller\u2019s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.\u201d1<\/a> Nonetheless, whatever else marketing encompasses, it certainly includes selling\u2014the getting and keeping of customers and revenues. As the old saying goes, \u201cIn most companies, sales is the only revenue-generating function; everything else is a cost center.\u201d Sales\u2019 importance as a source of revenue tends to define the form and substance of companies\u2019 marketing programs\u2014for both good (e.g., close attention to buying processes at specific accounts) and ill (e.g., confusion between sales and marketing).<\/p>\n

Of all sales issues, compensation is probably the most discussed. It is now the focus of a vast and varied literature with enough folk wisdom and quantitative studies to satisfy most managerial temperaments.2<\/a> But the great bulk of this literature focuses on what might be called \u201ccompensation hydraulics\u201d: push this pay lever, is the typical claim, and get this kind of field sales behavior. Lost in this approach is a recognition that sales compensation is an area in which data analysis, values, and the motivation of complex human beings are inextricably linked. The frequent result is that managers, focused on the hydraulics, forget that addressing the fundamental question, \u201cHow should we pay the people responsible for dealing with customers?\u201d inevitably implicates a range of issues involved in sales management, as well as other aspects of the business. The emphasis of the sales compensation plan will affect the quantity and kinds of orders received by manufacturing, the cash-flow profile managed by finance, the recruitment and training needs faced by marketing and personnel, and the daily organizational interactions between sales and all of these other functional areas.<\/p>\n

Sales Compensation Planning<\/span><\/b><\/p>\n