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Make sure compensation plans for sales teams are ready for 2014

By December 24, 2013June 11th, 2024No Comments

For companies looking to add to their lists of New Years resolutions, an improved sales compensation strategy should at least crack the top 10. Sales staffs are the driving force behind profitability and are generally the face of the organization to business partners, so it’s crucial that they’re fulfilled and feel like they have the potential for higher earnings. When sales teams succeed, so does the company.

Most people enter into sales positions because they’re self-starters who enjoy the challenge of nabbing a sale and receiving compensation in the process. In order to ensure the sales department has the best chance for success in 2014, here a few things to keep in mind when reviewing compensation strategies:

  • Diversify sales territories: A common complaint to incentive compensation strategies in sales is that employees may feel their odds of gaining higher pay may rely on someone else, which they may view as unfair, according to Sales Benchmark Index. However, it’s more likely that salespeople just aren’t spread out adequately in a territory. For example, a high performer may be assigned to a territory of salespeople who underperform, which may inspire the latter group to achieve. Make sure to diversity groups so there is a higher potential for earnings.
  • Make sure software is up to date: Advances in technology have changed the way sales forces conduct business for the better, allowing workers and companies alike to view performance measures and track compensation, according to The Kahle Way. Make sure these types of software, like incentive compensation management (ICM) platforms, are implemented in the workplace for maximum transparency and optimal compensation planning.
  • Don’t put a cap on earnings: The idea of being able to earn an unlimited income, while not particularly practical, is a key motivator for many sales professionals. It’s important to not place a cap on salary potential so salespeople continue to strive for higher pay through transactions that also benefit the company’s bankroll, Small Business Advocate suggested.

Companies that follow these tips should have happier and more competitive sales teams in 2014.

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Ballast Point Ventures

Ballast Point Ventures is a later-stage venture capital fund established to provide expansion capital for rapidly growing, privately owned companies in diverse industries, with a particular emphasis on companies located in Florida, the Southeast, and Texas. The BPV partners have more than 70 years of combined experience investing in and building high-growth companies in a number of industries, including healthcare, business services, communications, technology, financial services, and consumer goods. BPV has $200 million under management and seeks to make equity investments ranging from $3 million to $10 million.

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Harbert Management Corporation

Harbert Management Corporation seeks to generate superior returns for their investors by identifying and investing in the most promising early growth stage companies in the Southeastern U.S. HMC seeks to capitalize on what it believes are compelling regional dynamics, such as a strong and fast-growing economy, significant research and development activities, and an established entrepreneurial community. The HMC team combines substantial investment, advisory, and operating experience with capital and networking contacts to support great entrepreneurial teams in successfully executing their growth plans. With offices in Birmingham, Alabama; Richmond, Virginia; and Gainesville, Florida, it’s well positioned to partner with entrepreneurs throughout the Southeast.

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KBH Ventures

KBH Ventures was an early investor in Iconixx Software. KBH's investment philosophy plays a significant role in the firm's successful track record. KBH believes in running businesses to be cashflow positive and profitable every month. Startups and companies in a startup mode, such as one that has been purchased in distress, are expected to generate revenue within the first six months and reach profitability within the first 12 to 18 months. KBH also only invests in or acquires companies that are in the startup phase or have less than $20 million in revenues. KBH targets technology companies that offer business-to-business services.

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S3 Ventures

S3 Ventures is an early expansion and growth stage venture firm with $200 million under management. It’s focused on information technology solutions that solve large business problems. S3 also invests in medical devices that improve the human condition. S3 invests in category-defining opportunities. It partners with the team and help focus methodically on what it takes to build a successful company. S3 today helps talented entrepreneurs take their technology and market knowledge and form valuable businesses in a repeatable fashion. Investment sizes start at several million or more for Series A, B, and C financing.