Posted by www.makanasolutions.com Admin on Thu, Jan 22, 2009 @ 10:45 AM
Is your compensation program too expensive? Your CEO probably thinks so. Have you allocated too little for incentive pay? Your reps probably think so. You feel like you can't win! It is a delicate balancing act, but it is possible to add a little ‘science' to the process.
It starts with understanding your company's overarching compensation philosophy. Your philosophy will depend on how you hire and grow your employees. For example, your company may want you to pay top dollar to hire the best and be in the 90th percentile of pay. Others may want to fall directly in the center of the range - i.e. 50th percentile of pay.
Next, you need to find reputable sources for compensation data. Getting details on sales compensation is harder than general compensation. There is a plethora of firms offering statistics on compensation data but you really need to read the fine print to be sure it covers sales. They range in price from $500 - $6000 per year.
The most important things to look for are:
• What industries are included?
• What job roles (read the descriptions)?
• Do they have statistics on sales compensation? At a minimum, you should be able to get target total compensation and the salary/incentive mix.
• Can you segment the information by geography and company size?
• How fresh is the information? Do they only update once a year? Or is it ongoing?
Best practices recommend you pick 2-3 sources because the level of quality across all job roles can vary even within one source. Here are a handful of favorites for High Tech. All cover sales roles in sufficient depth:
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Industry
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Stats
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Segmentation
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Frequency of Updates/Survey Size
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Culpepper Sales Compensation Survey
www.culpepper.com
$495/year-$1825/year
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Software, IT Services, Medical Devices
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TTC, Mix, Draw, Pay as % of Sales, Revenue per rep and more |
Industry, Company size, Geography, and Quota Level
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Ongoing, 750+ companies, 50,000+ incumbents |
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Radford Sales Survey
www.radford.com
First year report free with participation $300-$700/year
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Aerospace, Electornics, Software, Other High Tech
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TTC, MIX, Pay as % of Sales, Revenue per rep and more |
Industry, peer group, revenue, geography |
Twice yearly, 475+ companies, 110,000 incumbents
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Western Management Group- High Tech Sales Survey
www.wmgnet.com
$1450-$7950
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Software, IT Services, Telecom, Medical Devices, Other High Tech
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TTC, Mix, Pay Frequency |
Product code, Company, Size, Geography |
Annually, 84 companies, 100,000 incumbents
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Posted by Teanna Spence on Wed, Nov 05, 2008 @ 09:11 AM
Should you considering product mix when creating your
sales compensation plans for next year?
With sales shrinking or profits eroding, it may be time to evaluate your product mix. Are your sales reps selling products that are less profitable to the company because it's easier? If every dollar of sale counts the same towards quota relief that could be exactly what is happening.
It may be time to step back and evaluate the products the reps are selling and the markets they are selling them to. Are the reps selling the products that are strategic to the company? Will these products help the company survive or grow?
You need to begin to analyze your current sales data. Looks at what products are being sold into each market you are focusing on across the geography boundaries of your sales organization. Next is to look at the gross profit of these sales. Don't forget to analyze the impact of adding new products or obsoleteing older ones.
If you determine that the products being sold are not the right ones, often times a change in focus in the sales compensation plan can create the desired effect. Change in focus can be accomplished by separating quota, changing rates, adding bonuses, etc. But be careful not to dilute the focus with too many measures or too little money.
Teanna Spence
Sales Compensation Director