Setting Sales Force
Compensation in the
Internet Age
By: Bill Weeks
Posted in Compensation and
Benefits Review
Presented by:
Kelcey Buchanan
Gerald Wright
Sales
 What
is sales?
 Are there specific ways to sell?
 Are there specific roles in sales?
 How does compensation increase
performance?
 How do you compensate for group based
sales?
 How do you compensate for internet
sales?
Sales
 Companies
devise their own specific ways
to sell. Such as a selling process:






Greet and Approach
Build Value
Offer Solutions
Ask for the sale
Educate
Thank and Depart
Sales
 Dictionary.com


defines as:
The act of selling
Transfer of property for money or credit
Roles for Sales Personnel

Marketing Managers


Sales Closers


Expertise to create, manage and mine databases of
existing or prospecting customers
Together with support team, create sales proposals
and present and negotiate the sales proposition
Relationship Managers

Work to maximize the sales potential of their assigned
customer base.
Cross-Selling Incentives
 What
is it?
 Four primary reasons they won’t do cross
selling:




New sales focus
Greed Factor
Fear Factor
Customer Ownership
Rewarding Cross-Selling
 Three



Approaches:
Additional compensation
Reaching targets
Base on reaching percentage of sales
Critical Functions of Compensation
Plans
 “Sales
incentives in future plans must
encourage the sales force to focus on the
customer, integrate with e-commerce, and
support rapid change.”
 Capitalize on relationships
 Raise the morale of the sales personnel
 Increase performance
Incentives for Relationship
Management
 Why
is Relationship Management
Important?



Retain increase the current buying levels for a
group of customers
Increase income or profitability of the
customers rather than product mix attributable
to the group
Difficult to obtain supporting data to set
performance standards and associated
incentives
Paying for Customer Satisfaction
 It
is hard to design a fair performance
standards for customer satisfaction within
incentive compensation
 Customer surveys are used to rate
satisfaction, however it can be detrimental
if the customer is having a bad day
 Most companies use it as a recognition
program instead of a compensation plan
Market-Level Compensation
 Growing
trend in large corporations for
non-sales positions
 Can be used for sales compensation as
well
 Eliminates competition in the market
 Supports a more fixed-cost structure
 Company should set definitions for model
performance (minimum, good,
outstanding)
Transition to New Forms of
Compensation

“Most new plans are put in place to change the
behavior of those paid under the plan”

Are the desired behaviors visiable? If not some
changed need to be made to improve them

Comparing old versus new plan the new plan
and the total amount of money being spent
under the two for the same performance is a
good estimate of overall impact.
Summary
 Face
to face sales compensation is
becoming too expensive for companies to
continue to pay, so be looking to see those
incentives to go out the door and for ecommerce sales incentives to be
increasing.