Sales & Marketing Management - March/April 2008 - (Page 17)

MANAGEMENT STRATEGIES MANAGEMENT STRATEGY [By Maureen Hrehocik] SECRETS TO A SUCCESSFUL COMP PLAN It’s people, not numbers, that carry the most weight good compensation plan doesn’t start with cold, hard figures, says Dave Stein, the CEO of ES Research in West Tisbury, Mass. Rather, it all starts with having—and then keeping—the right people. According to Stein, if you have the right people selling your product, other factors integrated into the mix will put you well on your way to reaching revenue goals and retaining exceptional talent. “It’s very difficult to get compensation packages right,” he says. “You can’t compensate a person who is not suited for the job.” ES Research has determined that as many as 30% of employees are not suited for their jobs because they lack critical behavioral traits such as self-motivation, intelligence, persuasiveness, resilience and curiosity. “These people are never going to succeed,” Stein says. That leaves the other 70%, who are suited or could be suited to the job. Many of these people are motivated by money, the power to influence and chart their own course, and/or by recognition. “Money does have a bearing on most salespeople,” Stein says. “However, even if you overhaul your comp plan, it still will not affect the non-performers or those not motivated by money.” Here are six compensation pitfalls Stein says he sees far too often, along with ways to avoid them: A 2. Comp plans that aren’t aligned with company goals. Sales managers fall into this trap when they pay on any business, rather than new business or business from new territories. “It’s human nature to want to call on people you know and have a good relationship with,” Stein says, “but that may not be enough to reach company revenue goals.” The comp plan should include goals in which the quota can be reached only by contacting new business or from different territories. 3. Comp plans that aren’t supported at the executive level. Maybe you don’t like paying people more than you make. Some managers may even go so far as rewriting comp plans midstream to align them more in the company’s favor. Get over it! “You can’t limit the salesperson’s ability to hit grand slam home runs,” Stein cautions. “Be willing to write a $1 million commission check if that person brings in the corresponding business.” Management also needs to support salespeople to help them reach quota by having marketing campaigns, sales call support, research and training brochures. [THE PULSE] 1. Excessively high base salaries. “Too high of a base salary is detrimental,” Stein says. “The employees may meet their quota, but they won’t make those extra calls to exceed it.” He cautions that too low a base salary is also bad, because the salesperson may not have enough cash flow before that first sale and become demotivated as a result. www.salesandmarketingmanagement.com 57 PERCENTAGE OF SENIOR EXECUTIVES WHO SAY TUESDAY IS THE MOST PRODUCTIVE DAY OF THE WEEK FOR EMPLOYEES. istock photo SOURCE: ACCOUNTEMPS NATIONAL SURVEY MARCH/APRIL 2008 SALES &MARKETING MANAGEMENT 17 http://www.salesandmarketingmanagement.com

Table of Contents Feed for the Digital Edition of Sales & Marketing Management - March/April 2008

Sales & Marketing Management - March/April 2008 Contents Editor's Letter Brian Tracy University Sales Marketing Management Cover Story: Lessons From the Master Maximum Mobility Training Technology Incentives/Motivation Travel/Meetings Book Excerpt - Value Merchants The Way I See It - End the Discounting Habit

Sales & Marketing Management - March/April 2008

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