If you have a business that operates in sales, a recent blog post from the brilliant Josh Melick could certainly be the key to your success. Josh is an expert when it comes to business and sales, and his recent post focuses directly on the best way to set up a sales comp scheme for staff, and how to make sure that it actually delivers on its purpose.
Josh argues that far too many of these companies are getting it completely wrong when they set up and manage these commission plans for their employees. The idea of a sales comp plan is to incentivize employees and here is exactly how this can be done.
Setting Up a Basic Floor
It isn’t good business to offer all employees an incentivized pay scale from the very beginning of their sales, there should at the very least be a sales floor which they have to breach before they start making a percentage on the sales which they are making. This doesn’t have to be very high, but it is always helpful to really push employees to sell.
Accelerating Percentage
Josh also touches in the blog post that good sellers should be further incentivized to be great sellers, through an accelerated approach. Let’s say that you are going to be offering your sales team a 10% commission on their sales, once they hit a certain amount, you should offer them an extra percentage, and you can create another 2 or 3 floors here which will make sure that those staff are really pushing on to be all that they can regarding their sales. The key to all of this is remembering that the more they sell, the more money the business is able to make.
Paying on Time, Every Time
As absurd that it sounds, a great number of businesses don’t process and deal with their employee’s commissions every single month, on time. This is absolutely critical for this system to work. The reason is that employees simply will not be pushed to deliver on their sales, if they are not getting the money when they should have it. This is a very simple aspect of the sales comp plan, but one of the most important.
Training Up
It is not fair on new employees that they should have to reach the same floor as other, well established staff before they start to make money. Set up a training program and during that time make sure that you pay these staff a far improved basic wage, accompanied by a smaller amount of percentage for each of their sales. This will make them feel motivated and encouraged to keep working with the business and understand just what can be achieved if they work hard on there sales.
This is a system which works well, but as Josh alludes to, only when it has been setup right and when it is implemented well.
