Loading ...Here is the second installment in David Cichelli’s “Ask the Expert” series on this blog. The first post and David’s background information are here.
Question: What are in your opinion the biggest challenges in sales compensation. Is there a key to success?
Answer: Well, I could write a book on this subject. Sales compensation is a very noisy device. It is hard to establish, keep current and administer effectively. We find that sales compensation programs tend to fail due to:
1) Obsolescence. Sales compensation plans must be continually updated to help maintain strategic alignment with the company’s goals. Most sales compensation specialists consider an unchanging sales compensation plan as a failure of sales management.
2) Complexity. The sales compensation plans are an easy “mark” when sales management is looking to get the attention of the sales force. However, too many measures—more than 3—doom a sales compensation program as it becomes overly complex.
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