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Privately owned companies have the flexibility to customize sales compensation plans that meet the demands of the candidate market. When hiring new sales reps, market your sales position with a compensation plan that attracts top performers. With a tight job market, sales candidates have many opportunities. To stand out in the crowd, you may need to create a compensation plan that attracts and rewards performance.
Here are four tips in creating sales compensation plans to attract top performers.
1) Don’t overpay a base salary, but don’t let sales reps die on the vine. You want sales reps who are hungry for success, yet you don’t want them starving at home during the initial ramp-up. If they are worried about paying their bills, they won’t stick around for long. Provide a safety net with a base salary or draw that correlates to the length of your sales cycle. The longer the sales cycle, the larger the safety net.
2) Tie incentives to the activities or results you desire. Almost 70% of sales and finance managers think their compensation plans fail to drive desired behaviors, according to a study by Synygy. In addition to commissions for closed sales, consider activity incentives. For instance, if you know that 50 cold calls per day generates five conversations that results in one sale, then provide your reps with a cash incentive to make the 50 daily cold calls.
3) There is no perfect plan. Be flexible based on the experience and track record of the candidate. If necessary, customize a sales plan for top producers. Your top sales rep may need higher upside potential to feed their hunger for success. Like a race horse, let them run and run fast. Don’t let processes and structured comp plans get in the way of star performer.
4) Be realistic about income potential. Honest numbers work. The “sky is the limit” or “earn a six figure income” is over played. Receive better quality candidates by painting a realistic picture of first and second year income achieved by your above average players. Look at industry comparisons to set realistic expectations.
Unlike large corporation, smaller company have the advantage of being flexible in your sales compensation plans and can quickly adjust to the demands of the job market. In the sales profession, compensation is the #1 way companies can attract and retain top performers.
If you would like to learn more about how to match compensation to your recruiting efforts, give us a call at 317-578-1310. Or email us at email@example.com