Cichelli, senior vice president at the Alexander Group, offered his tips at WorldatWork’s Total Rewards 2013 Conference and Exhibition.
Diverse Product Mix
Here are the diverse product mix conditions that suggest the approaches below:
- Many product divisions, one sales force
- Balanced outcomes required
- Varying incentive value due to varying volumes
- Degree of sales difficulty differs by product
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Territory Rep |
Account Manager |
Key Account Manager |
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Bold |
Stand-Alone Rates for Each Revenue Modifier Based on Cross-Sell Ratio |
Modifier to Reward Preferred Strategic Revenue |
Account Portfolio Planning KSO Rewards Enhanced Credit for Diversity of Sales |
Growth in Flat Markets
Cichelli says that under the following conditions of flat markets, the approaches below will be feasible:
- Core product growth less than 10%.
- There are new account objectives.
- Retention of existing accounts is important.
- There is a new product push.
- There is new segment selling.
- There are new value propositions.
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Territory Rep |
Account Manager |
Key Account Manager |
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Bold |
Reward for Absolute Growth Commission on New Accounts Modifier for New Account |
Modifiers for:
Bonus Plan Flip to Commission for Above Quota Sales |
Reward for Revenue Growth/New Contracts only Reward for Longer Term Contracts—Declining Commission Formula |
Retention of Sales Personnel
Cichelli offers these conditions that might require the efforts below:
- Turnover is a problem.
- Training time is long.
- Seasoned sellers are an asset.
- Cost to replace is high.
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Territory Rep |
Account Manager |
Key Account Manager |
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Bold |
Career-to-Date Revenue Performance Base Pay or Incentive Steps |
Provide Certification Levels That Offer Higher Base Pay and/or Incentive Payout Rates |
Have Rolling 3-Year Payout Schedules Tied to Contract Performance |
If you don’t look at the base pay metrics for your organization, you run the risk of missing an opportunity to optimize your strategy to ensure that it fits in with your overall compensation philosophy.
There are many types of both internal and external compensation metrics that can be used to achieve the goal of improving an organization’s overall compensation strategy, including compa ratios and salary penetration ranges. It’s also important to take a close look at a number of factors, including annual payroll, average hourly rate, number of employees, and more.
Don’t miss our informative webinar on July 9, Compensation Metrics: How to Gather and Calculate Key Data so You Can Pay Appropriately, when we’ll discuss the key types of metrics to use when you’re trying to determine whether your salary ranges are appropriate for your organization.
Register now for this informative event risk free.
With the job market improving, retention is likely to become an issue for more and more employers, so it’s smart to be on top of this stuff now–before you start losing the best sales people.