Sales Compensation Presentation

Quick Summary: Developing a fair and equitable sales compensation plan must consider many factors.

Abstract:

Compensating sales reps for securing revenue is a common practice throughout all business sectors. A simple, straightforward sales commission plan in which a sales rep receives a fixed percentage of each sale seems to be a reasonable approach.  Unfortunately, several factors require careful consideration that often require a different approach to ensure that the goals of the sales reps and company are equally met.  Creating a detailed plan can avoid contentious discussions that can occur after a sale has been made.

A PowerPoint™ presentation with the same name as this article is available on the www.CxO-Atlas.com website.  Registered website users can download this presentation.  There is no cost for accessing the website or downloading any of its content.  Instructions on how to download this presentation or any other content are included at the end of this article.  Each slide contains standard PowerPoint presentation notes that further explain each slide’s messages.  A composite notes text file and a single-page summary can also be downloaded.  It might be helpful for the user to read the text notes as they view the slides.

Paraphrased from the Introductory article in this chapter:

“What will become apparent when viewing this presentation is that the author has minimal artistic ability!  Hopefully, the user can get past the “visual impairment” of the slides and focus on the content.  The presentation is not a “sales” or “investor” slide show, intended to “sell” the subject.  Instead, it was created as an educational slide deck. The accepted “presentation rules” of lots of pretty pictures, 40-point font, and ten words per slide were not followed – not by a long-shot!”

All of us, independent of our roles, become masters of whatever measurement system that is used to judge our performance.  Even children quickly learn to modify their behaviors based on their parent’s approval or disapproval, except of course, when they are in their early teenage years!

Creating a fair and equitable sales compensation plan requires careful consideration to ensure that both the sales reps and the company meet their goals.  This presentation provides a plan that has been successfully used in the past and is highly flexible in meeting a wide variety of needs across multiple sectors.

On the surface, it seems simple and straightforward to structure a sales commission program in which a sales rep receives a fixed percentage of the revenue associated with each sale.  In certain cases, this approach may be acceptable.  However, in most cases, other factors need to be considered to help ensure that the program is fair to all parties.  Often, fair does not equate to equal.  This presentation addresses many of the issues that should be considered in developing an effective plan.

A tool, an Excel™ macro-enabled workbook, is available from article 8.030203, Sales Compensation Workbook.  The tool can be used for a straightforward sales commission plan or a more involved sales compensation plan as discussed in this presentation

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The files that can be downloaded are:

  • Sales Compensation.pptx (PowerPoint presentation)
  • Sales Compensation Presentation Notes.pdf (Text file of slide notes)

 

Article Number : 8.040405   

A Handy Reference Guide for Executives and Managers at All Levels.

9 Volumes 42 Chapters ~663 Articles

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