This article answers the following questions:
How do most companies see a return on investment (ROI) for their sales compensation costs?
What part of the cost of sales compensation management company does not specify an existing account compared to making a new account?
Are most companies expect their salespeople to develop new, more gross income each year equal to or greater than their salaries? One conclusion I have reached after working with various types of companies is that there is little similarity in the way they are building the desired return on investment (ROI) of their sales compensation investments. Every company is different situation, as a result, what constitutes acceptable ROI for a company is not deemed to be accepted by other company.Here some questions to consider when you specify the desired sales compensation ROI for your company, and how ROI is to be shared between accounts existing and new accounts:
What is the value of each dollar of sales PRODUCTION? This value is different if a sale is made the dollar an existing account versus a new account?
How the time and effort required to maintain (and counting) of existing customers to compare the time and effort required to bring new account?
Reckon pretty much operate on "autopilot" after they were brought on board, or your sales force must continue to invest significant effort (in terms of internal candidates qualifying opportunities, proposal development, relationship management, etc.) to maintain sales volume and profitability?
Once the account has been brought on board, ANY sellers can manage interaction, or is there something special about the relationship that exists between the seller and demand? I've seen cases in which management held the opinion that any person can manage and maintain the volume of business that produce basic account. They questioned why they should continue to pay high compensation for salespeople who manage some cases accounts.In management chose to reduce the commission rate, which led to the sales force that manages to leave the company account. In other cases simply switch account management tasks and provide more "expensive" (in terms of compensation) sellers in the main account.
Too often the result of either approach is the slow decay of profit eventually added up to millions of dollars in lost revenue achieved decay sales.Why Close inspection identified two main factors?:
The seller is actually replaced enjoyed a special relationship with key players in the accounts. Major player loyalty 'to the salesperson, not the seller employer. When the seller went, key players saw little reason to continue to support the (previous) employer sellers with their business.
The seller replaced quite responsive and provide outstanding levels of service. In some cases, sellers are usually not successful in exploring the informal networks that their employer. This allows them to solve problems and do favors for their customers with the timeliness of some sellers can not specify that some sellers match.If IS enough bandwidth to carry the new account, here's a question to consider when you set the "business New "their purpose:
What is your company's market penetration rate has been achieved to date?
Much more reasonable market penetration of your company can be expected to occur within a specified time period?
How many potential prospects that exist in each sales area?
How potential prospects compared with existing customers in terms of earning potential?
How many new prospects of sellers have to close to make a considerable difference in their numbers Here are a few final questions for you to consider?:
What is the percentage return on investment currently receiving compensation for your sales?
Are you a salesperson makes their compensation in terms of profits back into your company?
Is it really reasonable to expect compensation for the sale of your ROI grow every year? Conclusions The question posed in this article can help you determine the desired return on investment sales compensation, plus develop targets for ROI from existing accounts and new accounts. Do not let the fact that some sellers get compensated significantly higher ROI to set your goals too aggressive. Instead, focus on the question, "How much benefit do we receive sales compensation we pay?" Back solid on your investment means that you are completely justified in investing Copyright 2005-2008 -! Alan Rigg
