It’s Really Hard to Out-Manage a Stupid Sales Compensation Plan

In Episode 54 Mike continues the series on Common Sales
Leadership Sins, and this time he touches the “third rail” —
compensation!


 


If you have complacent salespeople, Mike argues that the very
first place to look is at the compensation plan... And he claims
to be the very first person to discover and publicly declare
that the words COMPensation and
COMPlacency start with the same four letters!


 


As the sales leader, you may be the very best at selecting and
developing talent, arming, equipping, and enabling your team,
coaching on sales skills and deals, and even at holding people
accountable, BUT if your sales comp plan is incentivizing the
wrong behaviors and is not driving the desired results, then you
have a massive problem.


 


Mike unpacks his three big pet peeves when it comes to comp
plans:


 


1. Plans that are too flat (not enough
difference between what top and bottom-performers “earn”)


 


2. “Commission Annuities” (commission
in name only, commission that really isn’t variable, or paying
people in perpetuity to service/renew accounts for deals that
were sold years ago)


 


3. Not rewarding New Sales (paying the
same rate/percentage in variable comp for renewing/servicing
existing business as for the heavy lifting to develop true new
business - major cross-sell/up-sell victories or acquiring net
new customers)


 


Resources mentioned in this episode:


 


Mike’s Article:  4 Very Common Causes for Lack of New
Opportunity Creation 


 


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