Is Your Sales Compensation Plan Killing Your Sales Performance?

It’s no secret that most salespeople don’t work purely for the love of selling. Compensation is important, but there’s more to it than just promises of high payouts. The way you structure your sales compensation and incentive plans can have an immense impact on your sales performance and culture.  Having a well-defined compensation plan is key to creating a high-performance sales environment that promotes competition and aligns reps’ behaviors with your company’s goals.

So the question is, how do you create a sales compensation plan that works?

Align Targets and Company Goals

What is your company’s top priority? Is it product sales? Acquiring new customers? Profitability? Your sales compensation plan should be designed around your top goal(s). Sales reps that meet or exceed their goal should be awarded appropriately. Set pay levels that attract and retain sales talent in your industry.

Then take it another step forward. Align performance metrics with incentives. It’s not always just about the percent of revenue or the number of closed deals. If you have metrics or KPIs tied to appointments, new business versus existing business or other activities, it’s important to incorporate those metrics into your compensation plan to drive the right behaviors.

Balance Salary and Incentives

Your company will need to determine the right mix of salary and commission that each sales rep will be paid to establish your on-target earnings (OTE). The proportion of earnings that come from salary and from incentives determines the riskiness of the plan. The proper balance varies by industry and is often based on the degree of certainty that sales reps’ efforts will directly influence sales.

Ultimately, the proper pay mix will depend on factors like your industry, the rep’s experience level and role, the average length of your sales cycle and average deal size.

For example, a 50/50 split, may include a base salary of $100K with the potential to earn another $100K in variable commissions if targets are achieved. 

When attracting top sales performers, it’s important to provide an uncapped compensation plan that doesn’t limit the rep’s earning potential.

Establish Fair and Attainable Goals

Your company’s compensation plan should reward sale reps based on aggressive but achievable sales goals.

What you need to avoid, especially companies in the early stage of building a sales force, is just setting a random goal based on no past track record of success. This sets reps up for failure.

Establishing realistic goals with a clear path to success will create a high level of motivation across your team while also challenging your reps to push their performance to the next level. 

Keep it Simple

One of the most important rules when it comes to creating a sales compensation plan is to keep it simple. If it takes advanced knowledge of Excel and two hours to explain your compensation plan, it’s probably overcomplicated. Having a simple and easy to understand compensation plan not only makes it easy for the company to manage, it helps sales reps perform better when they understand what they need to do to get paid.

Pay On Time

The frequency with which your company pays incentives is another important sales compensation design decision. Timely measurement of results and prompt payment of rewards for performance are critical for success. Motivation diminishes significantly when there is a long lag between performance and payout.

A well-designed sales compensation plan should align with company goals and sales targets to encourage, recognize and reward exceptional performance by sales reps. Curious as to whether your sales compensation plan needs tweaking? Revecent can complete an analysis of your current sales compensation plan to identify areas of opportunity for accelerating sales growth and empowering your sales force. Request a consult now and start seeing powerful results. 

Revecent is a national sales recruiting and consulting firm specializing in helping technology and professional service companies recruit, build and optimize high-performance sales teams. Our approach centers on four principles proven to maximize sales performance: deploy an effective sales system, hire and develop the right talent, empower teams with the right tools and drive accountability with effective sales leadership.

Contact us today to see how we can help your organization’s sales team exceed expectations.

Sales Recruiting and Onboarding Success Tips.

Did you know that more than half of all employees who left their job during the 

past year did so within the first twelve months, according to a recent Workforce Insights study by Equifax? That’s employees overall. The average sales force loses one-third of its reps each year. That’s a pretty chilling stat brought to us by Hubspot, a stat we see our clients being affected by directly.

To help rectify this issue, organizations are moving away from the old school new-hire orientation classes and are focused on creating a strong onboarding process for new employees. But onboarding is more than simple new-hire training. It is a process of acclimating new employees to the organization’s culture and team, aligning expectations and performance and providing tools and information to ensure a quick ramp-up and long-term success.

Key Components for Onboarding Sales Reps

A recent statistic from O.C. Tanner shows that 69 percent of new hires are likely to stay with the company for at least three years if they have a positive onboarding experience. So how do you ensure you have a solid onboarding process to keep your sales reps from becoming a negative statistic? Let’s review some key components:

  • Proactive Engagement  Successful onboarding begins prior to your new sales employee’s first day of work. Engage sales candidates early to begin fostering excitement around their new role and to build enthusiasm for the company. Have a plan…30-60-90 days with a defined agenda of what information or training you plan to cover. Pair new-hires with successful sales reps that can demonstrate what makes them successful to get reps excited about the possibilities.
  • Present Goals – Share your organization’s roadmap, goals and objectives. Explain how the new sales rep’s role fits into the overall direction of the organization. Make sure your goals are realistic and provide insights on past goal achievements. Build incentives and incorporate gamification to make it fun while bringing out the competitor in your reps.
  • Introduce Culture – Provide an overview of your organization’s culture in terms of the overall, then the specific sales culture. Offer guidance to new employees to ensure their success. Discuss unwritten guidelines or rules that may not be found in the handbook. Help your new sales reps to navigate the organization, their team, and the environment. Introduce them to the entire organizational culture so they understand the entire business. This will give them a better understanding of the mission and vision of the organization, which will help them sell better. Introduce them to marketing, product development, operations, delivery etc. so they can understand the behind the scenes of what they’re selling.
  • Provide Training – Deliver functional training on your organization’s products, services, and target customer demographics. Provide training on any necessary tools or systems. Ensure new hires have access to relevant sales or product content. Sales rep training should be an ongoing and structured process. This should not be a one-time event. It should be part of continued coaching. It’s important to understand the strengths and weaknesses of the individual and their learning style to customize the training to their needs. Implement accountability measures to reinforce behavior change and ensure tactics and strategies are being deployed.
  • Clarify Objectives – Initiate on-the-job coaching to build confidence and reinforce sales reps’ goals and objectives. Address priorities, expectations, and deliverables during these one-on-one discussions. Track and measure goals and objectives in the CRM for customized reporting and analytics. This also emphasizes to the rep the importance of maintaining updated data and activities in the CRM.
  • Establish Mentors– Partner new sales reps with seasoned sales professionals who will provide coaching and mentoring. Mentors can introduce new hires to cross-functional team members, other divisions, and organizational executives. An organization that demonstrates the investment in its sales reps garners loyalty. Have new reps ride along and shadow experienced reps on live calls, demos, and meetings. Training is a great way to prepare reps for the sales process, but there’s nothing like getting real-world experience.
  • Give Continuous Feedback – Ongoing communications with sales reps ensures they are receiving the training and support they need to excel in their new role and that they are digesting and acting on what they have learned. Set a cadence and agenda for period meetings with reps as a team and individually. Have a well-defined agenda and always review activities and metrics.

Okay, great. These are the basics. But the devil is in the details, right? For one thing, who will be included in the onboarding process? Who “does” the onboarding? The best answer is, those who have knowledge and influence who are deeply invested in whether or not a new sales rep stays on and succeeds. These members of the organization should include:

Human Resources – Among other things, HR reps are doing the hiring. The last thing they really want to be doing is the firing. HR reps have a vested interest in keeping sales reps long-term. Who better to initiate onboarding? HR will acclimate sales reps to the organizational culture i.e. rules, regulation, etc. not their job to focus on selling.

CEOs – Yes, we know CEOs are busy, but company culture, goals, objectives and vision stem from the desk of the CEO. Who better to be involved in onboarding than the person setting the tone for the organization? The CEO’s involvement will depend on the size of the company. The bigger the organization, the less likely the CEO will have to allocate to each new hire. To help alleviate this problem, hire in “classes” if you can. For example, bring on five or more reps at a time and onboard them all together. Involving the CEO will help reps to sell with the long-term in mind versus their wallet.

VPs of Sales – These folks have the vision, too, but they also lead the charge in meeting goals, objective and numbers. Who better to motivate? VPs have vested interest in ensuring the successful and accelerated onboarding of new reps. After all, it’s their job on the line if goals are not achieved. They definitely should be hands-on in the process and direct high-level strategies to ensure goals are achieved.

Investing in structuring your organization’s onboarding process for new sales hires will result in a positive ROI in terms of employee retention and satisfaction. And that translates into revenue generation.

Interested in a thorough evaluation of your sales rep onboarding process? Revecent can complete an analysis of your organization’s onboarding strategy to identify what’s working well and areas for improvement. Request a consult now and start seeing powerful results. 

HireDNA is a national sales recruiting firm specializing in helping technology and professional service companies recruit, train and manage high-performance sales teams. 

Our approach centers on four principles proven to maximize sales performance: deploy an effective sales system, hire and develop the right talent, empower teams with the right tools and drive accountability with effective sales leadership. Contact us today to see how we can help your organization’s sales team exceed expectations.

Sales Recruiting Tips to Attract and Hire Top Sales Talent

Learn how to recruit and retain top sales talent to grow your business. 

Sales has never been more popular, successful recruiting practices never more needed.  Here’s why we can say that with such confidence. According to the latest U.S. Department of Labor’s Job Opening and Labor Turnover Survey, there are more job openings each month than new hires. This is great news, right? Yes, but we know that growing workforce requirements have companies competing to recruit and land top sales talent. This need, combined with the knowledge of the high cost associated with sales turnover (an average $97,690 per employee loss, according to DePaul University’s Center for Sales Leadership’s Sales Effectiveness & Sales Acceleration Survey), has companies focusing on improving their sales recruiting practices for good reason. Here are some insights we’ve learned over the past ten years of recruiting sales professionals at all levels.  

How Do You Find Top Talent?

Talented salespeople are crucial to any organization. They help build the brand, grow the business and establish a positive company culture. We can all agree that finding the right sales talent is important for ensuring long-term business success. Recruiting top talent, however, requires more than just posting ads to job boards. You need a current, multifaceted, proactive approach to attract, engage and hire the best candidates, and your competitors know this. Here are some ways to draw the sales talent your organization needs.

Solicit Referrals – You won’t get the right candidates if no one knows you are hiring and what you are looking for. Ask your networks, live and online, to refer candidates. Your top employees can also be a good resource for finding new candidates, as they know your company and the skillset required. You can reward your sales team for referrals that result in a successful hire.

Network Creatively – You don’t have to get your next employee referral at a networking meeting. Highly motivated people attend seminars, training classes and other events to advance their knowledge and careers. Participate in these events, as they provide a wide pool of talent. Request business cards from professionals who impress you. Even if they are not currently searching for a position, they might be in the future, or they might know someone who is.

Harness Social Media – According to LinkedIn, socially engaged companies are 58 percent more likely to attract top talent. So use social media to promote your company brand and build professional relationships. LinkedIn in particular is a potential goldmine of talent waiting to be discovered and professionals eager to give referrals. Do your contacts have any sales reps that they would recommend based on their professional or customer experience with them? You won’t know until you ask.

Maximize Your ATS – Your applicant tracking system (ATS) is a powerful ally. Tools such as Bullhorn and iCIMS can help you manage a talent acquisition process that works. Create a database of salespeople you’ve met through business interactions or networking that can be accessed whenever there are job openings. The database should include not only candidates you’ve previously spoken to, but also ones you wish to contact in the future. FREE HIRING MISTAKE CALCULATOR

How Do You Recruit Top Sales Talent?

The best way to hire and retain sales talent is to provide a company culture where employees want to work and where they feel valued. Sales reps are drawn to companies that value their sales force and provide the critical tools and resources needed to be successful. Over and over, we’ve seen that the recruitment process makes the first impression when it comes to a company’s culture and values. We know that developing a structured and efficient recruitment process that enables companies to find the best fit for their job openings, as well as providing candidates with a positive experience with the company, is key in recruiting top sales performers.  

Be Specific – Candidates want to know what they are getting themselves into. Create a targeted job description with ideal criteria and essential qualifications. Be sure to include the kind of information that will entice top producers. Remember, hiring goes both ways – your candidates are going to interview you as you interview them. And don’t be shy about telling job seekers about your compensation plan – which means you need a structured one in place that you will be able to explain clearly.

Prioritize Motivation – Don’t limit your talent pool. Many companies limit their access to top talent with four simple words: “previous industry experience required.” An ambitious sales rep with a strong desire to succeed can be trained on product knowledge and soft skills regardless of industry.  

Measure Sales Capabilities – Use a sales-specific assessment to measure the candidate’s core sales skills and competencies to ensure they are the right fit for your organization and sales environment.

Communicate Proactively – Candidates should receive clear, consistent, timely and upfront information on their application status during the hiring process. Poor communication post-interview can create a negative company impression and lead to losing good candidates. Slow communication can have the same effect, especially if the lag is a result of slow decision making.

Share Onboarding Processes and Growth Potential – Discuss your company’s onboarding strategy. Let candidates know they will have resources and support during their initial time with the company. Talk about the candidate’s current skillset, along with a clear training and development plan for growth opportunities. 

You’re facing challenges as you build your sales team. We understand that. But they are not insurmountable challenges. With the right people on the job, your organization can find and hire the right sales force the right way. Get the support you need now to avoid scrambling for talent later.  

HireDNA experts recruit, train, equip and manage high-performance sales teams to accelerate revenue growth. Contact us today to see how we can help your organization’s sales team exceed expectations.