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, asked the question, What do you want your sales to produce besides revenue?
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Get Your Report Now!Do you want transactions based on:
- Best product?
- Best price?
- Best service/follow up?
Do you want relationships based on:
- Value-added service to customers?
- Perception as a solutions provider?
In a strictly revenue/market share selling scenario, the sales person is typically:
- Independent
- Focused on earnings
- Personally-oriented
These are dynamics that allow the sales person to own their book of business. Hunters enjoy being aggressive.
- First generation hunters expect to be paid well for the risk.
- Second generation hunters work from historically-based plans.
The bigger the risk the more frequent result feedback and the shorter the sales cycle. This can be uncapped sales compensation with:
- Shorter quota periods
- Rolling reassessments and adjustments
- Launch contests
- Accelerators after fundamental targets hit
Then the company is typically:
- Vulnerable to turnover
- Pushed into uncapped earnings potential
- Has no effective way of linking the salesperson with the company
Reciprocally, you can minimize your vulnerability and maximize your compensation flexibility when the company "owns" the book of the business through a company-wide team orientation and separate reward structures that recognize team.
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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