Best Practices for Compensating Sales and Marketing People

Best Practices for Compensating Sales and Marketing People

You can’t have a business without making at least one sale. Making sure your salesforce is appropriately incentivized to grow your business and land the right customers is crucial. So, what are the best practices for compensating sales and marketing people?

Best Practices for Compensating Sales and Marketing People

In this blog, we’ll highlight a few of the best practices for compensating sales and marketing people. If you would like to learn more, then click here to read our WikiCFO on Sales and Marketing Compensation.
Many companies struggle to compensate their sales and marketing employees because it’s critical (need sales), complicated, and oftentimes a sensitive subject. In today’s world, it is critical for every company to have sales incentives because it makes economical sense. More sales equals more ability to pay your employees. But, many companies have experienced mixed success when implementing incentive compensation programs. First, they work best with an already well-established performance management processes. In other words, if you aren’t tracking performance, then start to. Keep in mind, these plans require several things, including the following:

  • Careful design
  • Excellent administration
  • Constant communication

Understand Your Customer and Sales Model

Before you can develop an incentive compensation program, you need to understand your customer and sales model. Does your company rely on deep, long-term relationships? Have a long sales cycle? Then your program will look differently from a company that sells products to a mass or retail market.
NOTE: Your incentive compensation plan should reinforce your company’s primary sales model.

Determine Incentive Program Objectives

What does your company really want to accomplish with these incentives? Identify 2-3 things that help you accomplish your goals. It could be any of the following or something else:

  • Market share
  • Revenue
  • Asset growth

These 2-3 things will be the guideposts for the program.
If you are hiring, then determine which candidates are the right fit for your company using our 5 Guiding Principles For Recruiting a Star-Quality Team.
compensating sales and marketing people
[box]Strategic CFO Lab Member Extra
Access your Recruiting Manual Execution Plan in SCFO Lab. The step-by-step plan recruit the best talent as well as avoid hiring duds.
Click here to access your Execution Plan. Not a Lab Member?
Click here to learn more about SCFO Labs[/box]
compensating sales and marketing people
 

Related Blogs
Does your Accounting Department Produce Net Income?

Coaching the Entrepreneur: Learn how to know what you don’t know. How much should I spend on accounting for my company?     I have been in the accounting profession for 32 years, and for the last 6 years, I’ve owned my own consulting firm to assist companies with accounting challenges. There is one common theme that I

Read More »
Near Sourcing vs. Outsourcing: The Key to Cost-Effective Accounting Solutions

In this insightful interview, Dan sheds light on the critical role of accounting in business growth and success. Uncover the common pitfalls business owners face when overlooking accounting and how it can hinder access to loans and financial opportunities. Learn why good financial statements are vital for decision-making and attracting investors. With the NearSourcing model,

Read More »
Is Mexico the New China?

In the wake of the COVID-19 pandemic and escalating tensions with China, American companies are actively seeking alternatives to mitigate their supply chain risks and reduce dependence on Chinese manufacturing. Nearshoring, the process of relocating operations closer to home, has emerged as an explosive opportunity for American and Mexican companies to collaborate like never before.

Read More »
WIKI CFO® - Browse hundreds of articles
Skip to content