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Sales Comp ROI Best Practices

When determining the ROI you can expect from your sales compensation plan consider
several drivers around ROI, and some ways to disaggregate the important
questions.

1. Determine your strategy and the business objectives you are trying to achieve.

Understanding, for example, that you want to grow a certain product group or develop a certain
market may change the way you look at ROI. You may be willing to invest a bit
more to develop this market than you would on average or in your traditional
markets. Isolate and evaluate ROI uniquely for that market.

Sales Comp ROI Challenges

Sales compensation can motivate the sales force in the right direction and bring
revenue to the company. But it can be expensive. Sometimes, the best
justification for a big budget sales comp plan is the promise of a nice ROI.

It’s not always inevitable, though.

In our work with companies, several challenges surface again and again:

1. What return should we expect from the sales compensation investment, and how
should we look at that return? Is it a flat dollar return, or a flat dollar
amount that we pay?

Designing Sales Comp for ROI

Almost everyone involved in the sales compensation plan, at one time or another, asks
about the ROI of the plan. In order to answer that question, we have to
evaluate how the sales compensation plan is designed. Luckily, sales
compensation design follows a predictable process. We begin by defining sales
roles and clearly articulating the sales strategy, and from that foundation we
build out the components for the plan, including answers to these fundamental
questions:

  • What kind of pay are we going to deliver to a particular job to be market

What’s Your Sales Comp ROI?

Return on investment is a topic that invariably arises when discussing sales compensation. Executives in sales, sales operations and especially finance want answers to three questions:

How much is the sales compensation plan going to cost us?

Is this a good investment of our money?

What should we expect back?

Check out our report, entitled What’s Your Sales Comp ROI, which features a panel discussion of experienced sales executives on evaluating the return on sales compensation.

The Deal You Can't Afford to Lose

Maybe your rep just got lucky. She landed an appointment with the CEO of one of your major customers. She had what it takes to get in the door. Now does she have what it takes to close the deal?

Sales Compensation Culture

Many companies today want to become more sales-oriented as a business. So, they spend time trying to understand their sales culture: Is it more focused on operations or service to customers than it is on new sales? Does the sales culture center around finance?

Sales Transformation Open Forum - Dallas

From The Sales Leadership Forum
Held in Dallas on 11/6/09
http://www.thesalesleadershipforum.org/
http://www.salesglobe.com/ 

 

TSLF Member: One of the things we struggle with is, unlike someone who sells a product, we sell a service. Attracting the right people who know how to sell a service versus a product is very difficult. So I’d be interested in feedback, and what processes they’ve gone through to find that type of person.

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