How Sales People Make Money

After having posted ‘Metrics to measure around a deal’ and ‘Sales people do not like to be tracked, measured or accounted for against anything other than quota’, the post ‘How Sales People Make Money’ by Jim Keenan (@heykeenan) from aSalesGuy.com is a great reminder for me what simple and straight forward a topic ‘motivation of sales people’ actually is:

“Sales people get paid by selling stuff. The more stuff they sell, the more money they make. The biggest impact on what a sales person makes, in some cases even more than their selling, is the comp plan. Sale people get paid on commission. Therefore, a sales persons compensation plan is the key to his or her earnings.

Management creates the comp plan. Comp plans need to be 3 things; simple, consistent and motivating.

Simple – Sales people have to be able to know what they’re getting paid for, how much and when. If they can’t understand how much they’ll make on a sale, your plan needs work. Sales people follow the money. If they can’t quickly understand, in their head, how much they make on a deal your plan is too complicated.

Consistent – It should be clear what you (management) is incenting. If you are looking to drive greater sales of a new product, the plan needs to support new product sales. If you want to increase services, then incent services. Far too often the comp plan does not support and align with managements message. This causes anxiety. Imagine being told to sell silly widgets, when you get paid more on dumb widgets. It’s stressful.

Motivating – Comp plans are in place to motivate sales. Good ones motivate sales people. They energize the teams and push sales people to excel. When plans aren’t simple or consistent they lose their value because they don’t motivate

Sales people get paid by selling. Sales people MAKE money because of the comp plan.

What does your comp plan look like. Is it simple? Is it consistent? Is it motivating? Creating the killer comp plan is the most impacting thing sales leadership can do to drive revenue. Don’t leave it to sales operations, don’t rush to get it out. Be creative, engage the team, connect with product, and align it with the corporate goals and make it the best damn comp plan you’ve ever created.

It’s how sales people make money and the companies revenues deserve it.”

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