Compensating the Sales Force, Third Edition: A Practical Guide to Designing Winning Sales Reward Programs

Acknowledgments 

Preface 

Introduction 

1. Why Sales Compensation? 
The Role of the Sales Force 
Why Sales Compensation Works 
The Power of Sales Compensation 
Job Content—The Source of Sales Compensation Design 
Sales Jobs and Sales Process 
Sales Compensation—Paying for the Point of Persuasion 
Sales Force Obsolescence and Sales Compensation 
The Impact of Customer Relationship Management 
What Can Go Wrong?
Summary 

2. Sales Compensation Fundamentals 
Variable Compensation Models 
Income Producers versus Sales Representatives 
About Sales Compensation Concepts 
Sales Compensation Design Elements for Sales Representatives 
Eligibility 
Target Total Cash Compensation 
Pay Mix and Leverage 
Performance Measures and Weights 
Quota Distribution 
Performance Range 
Performance and Payment Periods 
Summary 

3. Who Own Sales Compensation? 
Sales Compensation Program Ownership 
Program Accountabilities
Assignment of Program Accountabilities—Large Sales Organizations 
Using Committees 
Sales Compensation—The Process Manager 
Summary 

4. Why Job Content Drives Sales Compensation Design 
Job Content Drives Sales Compensation Design 
Sales Job Components 
Sales Job Type Inventory 
Job Levels 
Job Design Errors 
Sales Compensation Practices by Job Types 
Summary 

5. Formula Types 
Types of Plans 
Illustrating Formula Payouts with Sales Compensation Formula Graphs 
Unit Rate Plans 
Target Pay Incentive Plans: Commission versus Bonus 
Target Incentive Plans: Commission Formula 
About Link Designs 
Bonus Formula: Providing Equal Earning Opportunities When Territories
Are Dissimilar in Size 
Target Bonus Plans 
Bonus—Calculation Basis 
Special Designs
Add-On Plans 
Base Salaries 
Summary 

6. Formula Construction 
Fundamentals of Sales Compensation Formulas 
The Economics of Income Producers 
Advanced Thinking about Income Producer Commission Rates 
Constructing Sales Representative Formula 
Formula Construction Worksheets 
Summary 

7. Plan Cost Modeling 
Modeling Objectives
Successful Plan Modeling Steps
Summary

8. Support Programs: Territories, Quotas, and Crediting  
Territory Configuration  
Quota Management
Sales Crediting
Summary

9. Employment Status and Pay Implications  
New Hires  
Lateral Transfers
Promotions
Involuntary Terminations
Resignations
Leave of Absence
Vacation Treatment
Temporarily Assigned Accounts
Summary

10. Difficult-to-Compensate Sales Jobs  
Channel Sales Representative
Long Sales Cycle Mega-Order Seller
Business Development Specification Seller
Strategic Account Manager
Pursuit Team
New Account Seller
Account Manager
Overlay Specialist
New Hire
Branch Manager
House Account Manager
Sell and Deliver Service Providers
Merchandiser
Summary
  
11. Small Companies, Big Companies—Sales Compensation Solutions 
Does Company Size Affect Sales Compensation?  
Small Business, Small Sales Force
Fast-Growing Start-Up Companies
Cottage-Style Growth Companies
Large Companies
Summary

12. Compensating the Complex Sales Organization  
Examples of Complex Sales Organizations  
Challenges for Sales Compensation
Preferred Sales Compensation Outcomes
Sales Compensation Rules for Complex Sales Entities
Summary

13. Global Sales Compensation  
The Philosophy of Internationalism versus Globalism
Sales Compensation—A Local Solution
Global Trigger Conditions
Global Sales Compensation Solutions
Trends in Global Sales Compensation Practices
Summary

14. Administration  
Administration Components  
How to Avoid Unnecessary Administrative Burdens
Summary

15. Implementation and Communication   
Implementation  
Communication
Summary

16. Program Assessment    
Strategic Alignment
Employee Motivation
Best- Practice Variance
Return on Investment
Program Management
Summary

17. Sales Compensation Design    
The Sales Compensation Design Process
10 Steps to Sales Compensation Design
Summary

Closing Notes 

Appendix A: Sales Compensation Design Principles 
Appendix B: Sample Sales Compensation Plan 
Appendix C: Sales Compensation Survey Companies
Appendix D: Sales Compensation Administration Software Vendors 

Index 
 

Leverage the full power of your sales force with a cutting-edge compensation program 

Salespeople are motivated by many things—and how they’re paid tops the list. Sales compensation is one of the best tools for motivating any sales force and thus maximizing business revenue. Do you have strategically aligned sales compensation plans or are your pay plans holding back your sales force? 

Compensating the Sales Force has helped thousands of business leaders worldwide create sales compensation programs that drive sales performance, increase revenue, and trigger business growth. Now, this new edition brings you fully up to date with new approaches for a business landscape where product/solution objectives and customer needs are in constant in flux. 

Sales guru David Cichelli provides everything you need to build an incentive plan that delivers real financial results. He takes you step-by-step through the process of setting target pay, selecting the right performance measures, and establishing quotas. You’ll learn everything there is to know about: 

• Why job content drives sales compensation design

• Methods for calculating formulas for payout purposes

• The roles of quota allocation, sales crediting, and account assignment 

• Compensating a complex sales organization and global sales teams

• Administering, monitoring, and measuring the effectiveness of the program

An indispensable resource for anyone involved in sales compensation—from CEOs and sales managers to HR personnel to IT professionals—Compensating the Sales Force provides all the tools you need to design and implement a sales compensation plan that increases profits?and drives the sales team to exceed sales targets.