The sales motivation scheme is one of the most powerful tools sales managers have at their disposal. The motivation scheme has a direct effect on team motivation, and therefore on whether they reach their targets.

A sales scheme doesn’t function alone. A firm also needs:

  • Effective sales procedures and tools
  • A good product
  • A receptive market for the product
  • An competitive offering

However, if all of these things are in place, then the sales scheme can help a business fly — or plummet. …

A sales scheme is a complex system with many moving parts. For example, management must decide how much to pay sales staff, and how much of their pay will be from fixed versus variable salary. One of the key parts of an incentives scheme is the performance measures used by the system. In this article we’ll take a closer look at different performance measures and how to choose the right one.

Sales Schemes — A Complex Machine

A sales scheme should work to help a company achieve its aims in terms of revenues, market placement, and customer relationships. A correctly-designed…

Quota, or target, setting is one of the three main elements of a motivation scheme (alongside terms and conditions, and territory allocation.)

If one of these elements fails, the whole plan is likely to fail. For example, if a commission system pays generous commissions, but the quotas are too high or not achievable, the sales staff will not be properly motivated. An effective scheme is one in which all three elements are in harmony.

In this article we will focus on quotas and how best to set them for maximum success.

Who Is Responsible For Setting Quotas?

Assigning quotas is…

Anyone who manages a sales team knows that sales activity must mirror the overall strategy of the company. The point of sales activity is to help the company reach its goals — and the clearer those goals, the easier it is to build a strategy that works.

Key Sales Objectives (KSO) are related to the overall goal of the company, but they are shorter and often more challenging in nature. If you use them correctly, KSO can guide your team in the correct direction.

What Is A Key Sales Objective?

A KSO is a goal that is separate from the…

When you hire a sales person you need to do your maths before; that means deciding how much you are going to offer to this person. And when we talk about offering, we mainly refer to the level of the OTE (on target earnings) the sales person will pocket in a year. This is the sum of the fixed salary and the variable part (as for example commissions) the sales person will get.

It is called on target earnings because the variable part will be granted in full only if the goals are met, whatever these are! …

Defining a sales role is one of the first to consider when designing a sales compensation plan. The individual program one decides to apply, for example a tiered commission plan, applies to a sales role and not (most of the times) to an individual.

Now that each role is defined and grouped, it’s time to decide whether each role is eligible for sales incentives.

This seems obvious. If a salesperson sells a product, they deserve an incentive, right? That’s true — no salesperson will sell for you if they don’t have an incentive to do so!

But many companies overlook…

The sales incentive scheme is key to the success of any company that relies on selling products or services. After all, the sales incentive scheme determines how much sales people stand to earn. The most effective sales incentive scheme is one that truly motivates sales staff to reach or exceed targets (depending on company aims) and keeps them engaged with their roles.

When sales management realises there is something wrong with their system, they blame the most visible factors for example the commission rate they offer. Often the reason lies somewhere else.

One of the first one needs to check…


Sales Compensation Plan for Sales

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