How Comp Plans Impact Revenue Growth (Part 1)

“I don’t understand why my manager doesn’t do something about the salespeople who don’t give a crap and still keep collecting a salary and I don’t get a raise for carrying this team?”  ~ A real conversation from this past week

Incentives and compensation is a tricky issue.  Depending upon the revenue growth cycle, the process, the product, margins, sell price, etc.,  there are many ways to compensate your salespeople (growth professionals).  The bottom line is that a compensation program must:

• Reward the behaviors that you expect of your growth team.  Businesses often get lost here.  The ultimate measure of desirable behaviors is increased growth.  However, if the only reward measure is based solely on increasing revenues, then you will have a bunch of salespeople acting like transactional closers.  This may not be the most desirable selling attribute in a business that promotes relationship based, solutions oriented growth behaviors.

In most industries, part of the business development process involves building a long-term and growing relationship with the customer.  Hence, rewarding account retention and expansion can be an applicable compensation component.  In this scenario, devising an incentive for both customer growth and retention reduces the likelihood of  transactional behaviors and increases the potential for relationship oriented growth behaviors.

Know what you want of your growth team.  In today’s economy, businesses need to get away from the mixed messages of  demanding “sell and close now” results while reminding them to “build and nurture relationships.”  These behaviors can be mutually exclusive to the untrained professional.  Your compensation program and the subsequent development and education component requires a structured program that actively rewards all the desired behaviors expected of the growth team for engaging customers and prospects.

• Be financially advantageous for both parties. (This will be discussed in detail in Part 2)
• Be balanced toward who is taking on the most risk. (This will be discussed in detail in Part 3)
• Provide the education, development, resource and management support necessary to facilitate growth. (This will be discussed in detail in Part 4)

Dave Cooke has recently launched his program the Sustainable Revenue Formula™ (SuRF), which provides businesses a comprehensive formula for effective and sustainable revenue growth.  If you are interested in obtaining a copy of the white paper, “Revolutionizing the Future for Today’s Business”, please contact me: dave@salescooke.com.