Top 5 Myths of Sales Compensation

Myth #1: ALL CUSTOMER CONTACT JOBS QUALIFY FOR SALES COMPENSATION

Fact: Eligibility for sales compensation should be based off the nature of customer contact and relationships, amount of persuasion in buying process, level of sales process involvement, and measurable sales objectives.

Myth #2: YOU SHOULD RARELY CHANGE SALES COMPENSATION PLANS

Fact: Changes should be made to align with the objectives of the organization. Ensure that the changes accurately reflect the job’s focus and will measure impact.

Myth #3: "AT-RISK" PAY IS THE BEST WAY TO MOTIVATE

Fact: Pay at risk should be determined by degree of influence. Recognition and rewards should reinforce company values and goals, and pay mix and leverage should reflect sales influence and consider market benchmarks.

Myth #4: PEOPLE ARE ONLY MOTIVATED BY HIGH PAYOUTS

Fact: Overpayment can be disruptive and payments should realistically reflect performance. Ensure that the amount is significant enough to attract, but still aligns with goals and budgets.

Myth #4: TO REDUCE COSTS, CUT INCENTIVE PAY

Fact: Rather than cutting incentive pay, evaluate factors affecting selling costs and ensure that incentive pay is rewarding people appropriately. When a plan is structured correctly selling costs should be self-sustainable.

After understanding these five critical myths, a natural next step for many organizations is to partner with a Compensation Consultant. QTI’s team of experienced Compensation Consultants is ready to guide you through your compensation study and help develop a sales compensation program that will drive results. Contact us to learn more.

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