Your relationship with your salespeople is a two-way street. They do the work of closing deals for you and you pay them for their work.
Too often during client consultation calls, we hear that salespeople who started out like supermen have topped out and are not chasing new businesses.
Sometimes, things happen in a salesperson’s life that causes such a slump. Hopefully, it is temporary. However, you need to monitor this and avoid letting it go too long without doing anything to redeem the situation.
More often than not however, it’s the Compensation Agreement that turns a powerful closer into a retiree. Retirees, in case you don’t know, are looking to collect their checks without doing anything.
One of the greatest assets salespeople have is their resilience. It’s important to design your Compensation Agreement in such a way that you tap into this resilience. You can’t afford to be complacent. Don’t let your plan create retirees – because that is what you’ll get if you’re not careful.
Make your plan reward the work that makes you more money.
- Reward salespeople when they are prospecting proactively
- Compensate salespeople, old and new, when they close new business
- Make the residual commission fall off after a number of period or better yet, condition their continuing to receive a higher commission rate on their continuing performance of closing new businesses
Compensation plans can be anything you set up with one caution – that they be understandable and actionable. Provide a compensation agreement that can be adjusted in the future.
In business, one vital quality you can have is a clear foresight. Develop a long-term compensation plan but think about it carefully. I’ve seen plans that are so convoluted that they are demotivating. Don’t do that. Instead, strike a balance in being fair and rewarding to both parties. Do that and you’re on the right path to success.