This is Part 2 of Sales Compensation ROI. Please read Part I here.
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?
2. What strategic changes are driving our investment? This is a challenge for companies that have had some changes in the organization and are pursuing new strategies that require them to make additional investments.
3. What are the right metrics to use for ROI?
4. How long should we wait to actually see an ROI? How you measure ROI on a job that’s producing zero revenue if it’s a multi-year sales process, but we know they’re doing the right thing? How do we justify that from a financial perspective?
5. How do we get everybody to speak the same language? This is one of the trickier questions. It’s a multi-functional problem, involving sales, HR, sales operations, and finance working together for a return on the sales compensation plan.
If you have questions or require assistance in addressing these topics or other sales effectiveness challenges in your organization, please contact us at SalesGlobe, or email Mark Donnolo at email@example.com.