Sales Compensation Blog

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