Sales Compensation: Keeping the Company Profitable and Sales Stars Happy

Keeping a close eye on your sales is key to ensure your business success during a recession. A key a part of your small business strategy should be sales compensation.

If you are struggling with compensating your sales team, review these tips from our business coaches from across the U.S. and Canada:

• Understand what motivates your sales team. Like most sales professionals, money may top the list. But, listen to your sales team and you may find other key motivators. You can also do a behavioral assessment with each team member, which helps you understand what makes them tick. Be sure you have a licensed professional/coach give the assessment and help you understand the results.



• Evaluate and determine the dollar value to the company by salesperson. If you don't understand it, how can you manage it? Dig into the value by salesperson.



• Think long-term value. Sales create value and equity for your business so be sure to include the value to the company for the time the CEO, who usually drives sales in a small company, gets back to lead the company.



• Manage expectations and restructure carefully. Good salespeople are hard to come by so restructuring is fine, but don't interfere with their motivation to sell. If you do restructure, get creative! Create bonus plans targeting goals in levels to foster the motivation and competition common in sales personalities. Also, remember that many sales-oriented companies expect the top sales performers to make more than the CEO.



• Do a cost-benefits analysis. Ensure commissions aren't paying out more than the profit margin of the product/service. And, the bulk of your profits should be going to the company...not any one individual. Then, review your other sales overhead. Do you have unnecessary fat in the budget that could be dipping into margins?



• Find and invest in other sales stars. Your company sales can't be dependent on any one person. So, you should constantly be on the lookout for more high performers. As a part of this, ensure the sales team is selling the value of the company and not just relying on their relationship and reputation with the client/customer.

Overall, you have to get a good understanding of your business performance so you can make the best decisions for your organization. Good luck!