Does your business depend on salespeople? If the answer is yes, you probably rate and compensate them based on quotas.
While that method of determining compensation is obviously fundamental and hard to dismiss, it's also important to consider other measures of success.
To encourage sales efforts that get results and help grow your company, it's worth paying attention to three other factors:
Tracking these measurements is harder than setting quotas and adding or subtracting. If salespeople don't understand your measurement plan and it affects their pocketbooks, they'll either leave or do their best to thwart your system. Neither is good for business.
So if you're going to adopt a reward system that is anything but simple math, be prepared to devote time to make it work properly. Talk regularly with both customers and salespeople or the plan will fail.
Here are two verifiable measurements of sales success. Each can be reduced to a ratio based on company records. To do the most good, a salesperson has to achieve high marks in both areas.
Leads to sales. How many prospects did a salesperson approach in a given time period? And how many of them eventually turned into sales? Reward the highest ratio.
Leads to dollars. What was the value of each sale? High-dollar sales are worth more than low-dollar ones, although growing the business over time may require a balance. Still, rewarding the sales efficiency of those who bring in the most money from the fewest prospects is a possibility worth considering in some circumstances.
Get in touch today and find out how we can help you meet your objectives.