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  • Writer's pictureJonathan Bullock

How to get more out of your start-up’s direct sales force

As the founder of a startup, your experience with managing a sales force is probably very limited. One of the key roles of a sales team manager is the design and creation of the sales compensation plan.

There is a lot of research to support the value that sales and marketing spend has on the growth of your startup. A well-constructed sales compensation plan is a key component of this. When designing your sales plan for your early stage startup here are what you need to consider.

Define the on-target earnings.

The first place to start is to determine how much your sales team should earn if they achieve their sales quotas. Use salary benchmarks and regional comparisons to set the right level for each of your sales team roles. Once set then determine what percentage of the earnings will be a base payment and what percentage will be a commission payment.

The best way to determine these can be to start with what the sales representative’s revenue targets will be and work backwards from there based on a percentage.

Allow for competition and advancement.

People that work in sales are usually highly ambitious and keen on a challenge or competition. This can be achieved through rewards for stretch targets or by providing incentives for achieving goals at higher levels of the sales funnel.

Be detailed.

Once you have the solid structure of a sales comp plan you need to consider some of the details. For example, do all individuals in the same role have the same incentives or is it impacted by experience or tenure? Further, should all sales be treated equally, longer-term contracts for example may be more valuable and therefore more desirable.

Keep it simple.

Finally, the sales comp plan needs to be simple. It should not be difficult for the sales reps to understand what they need to deliver for your business and achieve their earnings.

TAKEAWAY: Fundamentally, the sales compensation plan is a tool to guide your sales team to achieve your strategic objectives. A motivated and engaged sales force will be worth their weight when trying to sell and market your product. Remember the saying goes, ‘you get what you measure’, and it is even more true in sales… you get what you compensate for!


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