What Do I Owe You? A Sales Compensation Philosophy
This month's newsletter was originally posted on the Talentfoot Executive Search Blog. It is part one of a special edition sales compensation series brought to you by Alvarez & Marsal, a Talentfoot Executive Search strategic partner.
Did you know the “Sales” page on Wikipedia doesn’t mention anything related to Sales Compensation? Go ahead and CTRL+F for just the word “compensation” (you can try “commission” as well if you want to be thorough), I can wait… You see! Something so fundamental to sales itself, compensation, is completely overlooked and undocumented on one of the world’s leading sources of information.
This leaves the rest of us asking three questions:
The last question, why, is what will define you as an organization. Compensation is the number one reason we all work; our market-based economy requires it.
But why pay differently for sales? Why sell your specific product? Why work for your leaders? Without any way to answer these questions you, your team, your organization, your customers, are all one competitor price change, feature update or leadership churn away from irrelevance.
Sales Compensation Philosophies
I will preface by saying that every person and organization is wholly unique. Philosophies cannot be taken up overnight. This is something all people and organizations have to come to with experience and knowledge gained through personal soul searching and interacting with diverse groups of individuals throughout the world.
That being said, here are a couple of examples we’ve helped organizations develop or bring to the surface to ensure their sales compensation plans are rooted in a strong foundation.
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Every company is unique and should tailor their compensation philosophy accordingly, however, and it can’t be said enough, compensation is more important than any other reward you can offer a sales professional.
When your sales team views compensation favorably their propensity to also feel more favorably toward the key drivers of engagement such as productivity, relationships with executives and internal career trajectory skyrockets.
Building On The Foundation
Once the Sales Compensation philosophy is established, there is no shortage of options one can take to designing a plan. These items will be covered in later articles but there are two best practices that should always be considered:
People don’t buy what you do, they buy why you do it. Truth is the only foundation solid enough to stand on, and if your compensation philosophy is rooted in half-truths, you are doomed from the start.
If and when you are ready to build upon your current sales compensation philosophy, or need help shaping one, Talentfoot and A&M is here to help.