Guest Column | May 9, 2013

Align Sales Compensation With Your Goals: A Compensation Plan That Works

By Ken Thoreson, Managing Director, Acumen Management Group Ltd.,

When it comes to how businesses pay their salespeople, there’s no one-size-fits-all approach. That’s especially true for any company that is diverse. Each has its own business, margins and mix of products and services. Some pay commission based on sales, while others only pay on margin; still others blend both with incentives and special bonus plans.

No matter which approach you use, success depends on awareness. Your sales management team must understand your company’s overall goals and structure compensation to align with them. In short, sales compensation should be not just a tactical focus for your organization, but a strategic one as well.

Sizing It Up

Compensation plans shouldn’t be developed in a vacuum. You and sales leaders need a solid grasp of your overall industry and your organization’s pce in it. You’ll need to factor in variables such as new product launches and major promotions, as well as consider your personnel structure.

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