Cours 6 Flashcards
Sales compensation plans
Salary
Incentive payments
Sales contests
Benefits
Non financial incentives
Salary
Fixed sum of money at regular interval
Motivate effort on non selling activities
Adjust for differences in territory potential
Reward experience and competence
Incentive payments
Commission
Bonus
Encourages sales success
Commission
Payment based on short term results
Dollar or unit sales volume (quotas)
Can change according to sales volume : progressive
Bonus
Surpassing set level of performance
Achieve a certain level of their sales quota
Sales contests
Encourage extra effort for short term goal
Benefits
Satisfy security need ans match complementary offers
Non financial incentives
Opportunities for promotion or various types of recognition for performance
Straight salary
Task not directly result in immediate sales outcome
Long cycles
Junior sp
Sales results from quality and comm
Advantages straight salary
Easy to compute and administer
Can be used when difficult to measure actual impact on sales (team work(
Require sales people to spend time on activities that don’t result in sales
Disadvantages straight salary
Pay is not tied to any job performance
Not direct incentive to improve sales relations performance
Advantages commission
Strongly motivated to improve productifs
Easy to administrer and compute
Compensation cost vary directl with sales volume
Limitations commission
Management has little control over the sales force
Difficult to motivate sp to build relationships with clients
Little motivation to engage in market analysis (activités away from selling activities)
Compensation plan
Mix plan
Combination plan et
Selling approaches related to short term sales
Large incentive component should be offered
Customer service and non sales objectives
Incentive component should be small
When is the mix plan used
When a sale is a sale
Contract signed
Saler accept the payments
Buyer receive products
Products are shipped
Successful sales contest
Clearly defined Exciting theme Reasonable probability of reward for all Attractive rewards Promotion to maintain interest during contest
A good compensation plan
Compare the actual distribution of promotion to the distribution expected when sales leaders created the plan
Performance management
Objective measures
Subjective measures
Objective
Reflects statistics from internal data
Quantitave measure
- outputs
- inputs
- ratios of output and input
Subjective measures
Personal evaluations by sales managers
Qualitative measures reflect behaviors
Bias : refers to performance evaluations that differ from objective reality : halo effect, inter person bias
Role of performance management in the sales system
Influence salespeople and their activities
Sales process
Goals—> plans —> actions —> measurement —> evaluation and consequences
Must be synchronized with regular feedback coaching
Level of competencies
Basic
Expériences
Advanced
Type of competencies
Product and market knowledge
Sales process
Planning and territory management
Relationship management
Engagement rate
What percentage of sales force received incentive pay
Excitement index
At what rate do salespeople earn their last incremental incentive dollars ?
Publishing ranking of sp
Can generate a lot of internally focused competition
Runs counter to the supportive culture
Can be demotivating
