In a BLR webinar entitled "Sales Compensation Strategies: How to Motivate and Re-Energize Your Sales Staff in a Challenging Economy," Dan Kleinman, principal of California-based Dan Kleinman Consulting, offered advice on sales compensation plans and the benefits of transparency with sales staff.
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Get Your Report Now!Profitability-oriented plans link pay to overall corporate results. However:
- Sales has no control over determining profit.
- Discount and margin rates are all set by the executives.
- Rainmakers will walk.
There are line-of-sight challenges, but there is great impact in:
- Aligning the sales force with overall company strategies
- Furthering sales staff's understanding of the financial implications of sales
- Linking pay to the funding pool; achieving rewards through the incremental gain
Put precision in perspective; set a standard based on a modeled estimate. And trust your staff to be smart!
Transparency reinforces trust and understanding. When making changes, start small and watch the pressure gauge. The two key factors in successful transparency are dialogue and the sales manager. Dialogue requires:
- Active listening
- Ensuring the message got through
- Constructive confrontation
- Building a relationship
- Timely responses
- Mutual responsibility
Consider sales linked to profitability and operating efficiencies while building a team-oriented sales and service culture. This will ensure you are prepared for continuing stormy seas by having good plans, good mechanics and good people.
Dan Kleinman is the principal of Dan Kleinman Consulting (www. dankleinmanconsulting.com), a California-based compensation and human resource consulting firm. For the past 18 years, he has served as an independent consultant for a broad spectrum of regional, national, and international companies, providing compensation, performance, organizational planning, and reward-system design services. His last assignment was serving as vice president and manager of compensation, benefits, human resources information systems, and payroll for Charles Schwab.
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