Getting sales incentives right is balancing act. No one would argue that providing just the right amount of reward – and opportunity to really rack up rewards – is a difficult art.
Every piece of a sales incentive plan must be in balance in order for it to work, from upside reward to the cost of the program.
At the core of any incentive plan’s balancing act, however, is the relationship between rewards and base pay. That relationship should be based in part on the importance of the sales person in closing the deal, said The Cygnal Group’s Donya Rose in a recent Xactly webinar.
To complicate things, it is an equation that changes as your brand and your selling changes. For example, as companies become better known, products can become easier to sell. It’s a moment when it may be worth shifting the percentage of variable pay a rep can earn. That balance can move the other way if your company releases a lesser-known product, increasing the importance of the sales person.
Clearly, the balance between variable and base pay is one worth revisiting whenever you examine your incentive plans.
Here are some signs that base pay should make a larger portion of sales salaries:
- Strong, well-know branding
- Great collateral
- Good support for the sales team
- Competitive pricing
Business environments where you may want to motivate sales higher incentives include situations where the sales person relies on:
- Their own network
- Nearly exclusively on individual skill
- Their own initiative and creativity
Want to know more about the balancing incentive plans, including how to make sure you have enough upside to inspire sales? Watch the webinar.