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, explained that profitability encourages selling smart:
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- Selling a suite of products; relationship ties equals less time spent on calls and accelerators can be used with combination sales
- Focusing on key decision makers for faster, more comprehensive sales
- Rewarding less for discounted sales, which has a tremendous impact on net income
- Rewarding for increased margin return
- Differentiating rewards for different products; one size does not fit all
Use rewards (outside of sales) to acknowledge cost reduction actions.
- Maximizing all sales channels
- Reducing travel expenses
- Negotiating better terms with low-margin, high-volume clients
- Timing closes to fit production schedules
- Selling product in stock
- Minimizing special deals and related customization
Time your payments for the best overall impact for the company and its crew.
- Pay (at least partially) when dollars are received rather when the sale is booked or shipped.
- Avoid paying residuals (annuities) unless real selling is taking place.
- Don't pay a premium for ticket taking.
Keep your total cash compensation competitive, but keep your mix your own. Beware of institutionalized costs and beware of perceived entitlements.
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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