Sales commission strategy: power up your sales team today
Your sales commission strategy provide a super opportunity to energize and motivate your sales team. When was the last time you updated it? Much of the sporting world operates on commission. Agents and players are given commissions based on results. NBA players in the playoffs can hope to earn extra pay for extra wins. Similar logic may be used for your sales team.
No matter how successful your commission plan has been in the past, it is probably time for an upgrade if you’ve not touched it in the last year. Sales reps need to know that you are dedicated to developing the best compensation package and how you are rewarding results. Revised commission plans not only show this but also mimic the ever-changing world. New resources and strategies appear every day. Sales teams should focus on constant improvement, but the motivation needs to be there.
Here are five easy tips and steps to update your sales commission strategy
1. Determine the Type of Compensation Plan that Matches your Team’s Goals
Do you praise and encourage collaboration amongst your team members, or is a little healthy competition more the style of your team? Do you want to award your team together for winning playoff games or on an individual basis for those high-scoring individuals? A team that works collaboratively must earn commissions that reward successful team completion of projects and sales. If you want your team to focus on selling more products than other reps, commissions should be given out on an individual basis.
2. Determine Roles and Skillsets
Once you’ve determined the type of team you want to have and how you will dole out the commission accordingly, you must also begin to distribute certain jobs to certain skill sets. Every player in the NBA has a specific job description that lends itself to the successful completion of a season. Which positions will be a part of the new commission plan? Set goals for each position that reflect your expectations for constant improvement.
Can you actually afford to up your compensation plan if each team member makes their goal? How much will your team earn for being in the playoffs? How do you spread that around evenly? How much does it actually cost for your team to generate some sort of revenue? Are there new training or technology that your team will need in order to accomplish these goals? You need to know if your commission plan is doable or if it should be reworked.
Keep your team in the loop as to the timeline for the beginning and end of the new and old commission plans. Make sure your team is in the know about how the new commission plan will work with regards to their performance. Will they earn extra commission for slam-dunking over another player?
Once you have developed a new commission plan, incentivize your team with attractive bonuses. Make sure they are motivated to stick with the plan. Clearly, outline team goals and hopes for the playoffs at the beginning of the season.
The issue with executing a compensation plan is that often sales leaders spend too much time designing and creating a commission flow that may be limited by inflexible, non-scalable systems. That’s the reason I want to invite you to use Blitz, the software that allows to automate your commission process and achieve better efficiency by adapting compensation strategies to your sales department’s needs.