effective sales force mgt
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SALES FORCEEFFECTIVENESS MANAGEMENT ccelerate Sales Force Productivity and Improve Your Sales Results by
ligning Sales ctivities with Company Objectives
Origin Source by David CichelliSenior Vice President The Alexander Group, Inc.Author of ‘Compensating the Sales Force’
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Comprehensive Framework for Sales GrowthComprehensive Framework for Sales Growth
Sales Management System
1Sales
Segments&
Objectives 2Coverage
Model 3Sales
Process 4Job Design
&Organization
Structure 5Resource
Deployment 6Sales Talent
&Supervision 7
PerformanceMetrics 8
Quotas&
SalesCompensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Predictable Pattern of Business GrowthPredictable Pattern of Business Growth
Base
Low
High
Phase IStart-Up
Phase IIVolumeGrowth
Phase IIIRe-
Evaluation
Phase IVOptimization
Grow
GrowReally Fast
Grow; Keep
Customers
Launch NewProducts
ControlPricing
ReduceCost
Re-ThinkProduct & Market
Strategy
Reposition
GrowSelect
Markets
Top Line Growth
• Territory Sizing• Quotas
Revenue Mgt
• Get NewCustomers
• Keep Customers• New Products
Price Mgt
• Protect Base• Price Mgt• Reduce Costs
Segment Gowth
• New ValueProposition
• New Markets• Specialization
Objectives
Issues
Sales
Growth
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Success Can Lead to ObsolescenceSuccess Can Lead to Obsolescence
BusinessStrategy
Start-Up
Any Business
MarketingStrategy
One Product
SalesStrategy
Survive
O b s ol e s c en c e
O b s ol e s c en c e
Volume Growth
More Business
Big Market
Lower Costs
O b s ol e s c en c e
O b s ol e s c en c e
Re-Evaluation
WhatBusiness?
Many Products/Markets
Hold Share
O b s ol e s c en c e
O b s ol e s c en c e
Optimization
CertainBusiness
SegmentManagement
Optimize for Returns
O
b s ol e s c en c e
O
b s ol e s c en c e
SBUs
Insufficient
Customer Coverage
Insufficient
Customer Coverage
Failure to
Support Multi-ProductStrategy
Failure toSupport Multi-
ProductStrategy
Price ErosionPrice Erosion
Too Many
Dissimilar Products andCustomers
Too ManyDissimilar
Products andCustomers
Phase IStart-Up
Phase IIVolumeGrowth
Phase IIIRe-
Evaluation
Phase IVOptimization
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Dimensions of Excellence by PhaseDimensions of Excellence by Phase
BusinessStrategy
Start-Up
Any Business
MarketingStrategy
One Product
SalesStrategy
Survive
T r an s f o
r m a t i on
T r an s f o
r m a t i on
Volume Growth
More Business
Big Market
Lower Costs
T r an s f o
r m a t i on
T r an s f o
r m a t i on
Re-Evaluation
WhatBusiness?
Many Products/Markets
Hold Share
T r an s f o
r m a t i on
T r an s f o
r m a t i on
Optimization
CertainBusiness
SegmentManagement
Optimize for Returns
RecruitingOn-boardingMessagingExecutingTesting
RecruitingOn-boardingMessagingExecuting
Testing
Acct StratificationMultiple Messages
Acct Mgt SkillsHunters
New ProductsMarket Share
Acct StratificationMultiple Messages
Acct Mgt SkillsHunters
New ProductsMarket Share
Customer SegmentsMultiple Channels
Sales SpecializationRules of EngagementMargin Maintenance
Customer De-selectionProductivity
Customer SegmentsMultiple Channels
Sales SpecializationRules of EngagementMargin Maintenance
Customer De-selectionProductivity
Fewer SegmentsSimpler Channels
Intense Customer FocusHigh Productivity
Low ChurnGood Margin/ Cash Flow
Fewer SegmentsSimpler Channels
Intense Customer FocusHigh Productivity
Low ChurnGood Margin/ Cash Flow
Phase I Phase II Phase III Phase IV
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Destination: Sales Excellence - ThemesDestination: Sales Excellence - Themes
Start-Up Volume Growth Re-Evaluation Optimization
Phase I Phase II Phase III Phase IV
New Market
Access Selling
New MarketNew Market
Access Selling Access Selling
Successful GrowthScaling
Successful GrowthSuccessful GrowthScalingScaling
Core-Market Sell ing
Proficiency
CoreCore--Market SellingMarket Selling
ProficiencyProficiency
Multi Segment/
Solut ion Selling
Multi Segment/Multi Segment/
Solution SellingSolut ion Selling
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Sales Segment & Objectives
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Sales SegmentsSales Segments
Sales must do marketing…
Sales Segments
Product
Customer Channel
… to organize selling resources.
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Principles of Effective Segmentation and
Targeting
Principles of Effective Segmentation and
Targeting
• Actionable: determines sales strategy, coverage and
account targeting• Simple: easy to communicate and understand
• Customer focused: based on buying process and
buyer needs• Sales potential focused: customers and prospects
grouped on potential and current revenue
• Ranked by attractiveness: segments are evaluatedand ranked in term of buying processes revenuepotential, profitability and past success
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Segmentation and Targeting ComponentsSegmentation and Targeting Components
How should the market be divided into meaningful, actionable groups and which should be targeted?
Buyer ProfileBuyer Profi le Identification of significant differences in how buyers make theirpurchase decisions
Buyer Group
Attractiveness
Buyer Group
AttractivenessDetermination of attractiveness of buyer groups based on current andpotential revenue, profitability, strategic fit, operational fit, loyalty, etc.
Targeted and
Actionable Segments
Targeted and
Actionable Segments
• Matching segment buying criteria (based on how buyers want to buy)with the attractiveness of segment to the company
• Segments must be identifiable and actionable
Value proposi tionValue proposi tion• Alignment of value proposition with buying preferences
• Delivery of a unique value proposition
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Coverage Model
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Channel Strategy EvolvesChannel Strategy Evolves
BusinessGrowthPhase
Start-Up Volume Growth Re-Evaluat ion Optimizat ion
I II III IV
SBUs
V
DeploymentModel
Geographic-based coverage
Customer Size/Value
Specialization
Vertical Marketand Product
Specialization
•Channel•Specialization•Channel BusUnit
•Field Bus Unit•Market Bus Unit
•Channel•Specialization•Channel BusUnit
•Field Bus Unit•Market Bus Unit
StrategicBusiness Unit
Action Plan AccountStratification
• Size• Value
AccountSegmentation
• Product• Industry
• Channel
BuyerSegmentation
• New Access• New Buyer
Access
MarketSegmentation
• New Market Access
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Illustrative Sales Coverage ModelIllustrative Sales Coverage Model
Coverage Resource Coverage Comments
Worldwide AccountsTop 500 Accounts: Over S10M in Potential
Annual Revenue
Team Selling Model
Corporate Accounts Local Sales Through Central AM
Major Accounts Channel Management
Field Sales Accounts Geographic Sales Coverage
Channel SupportInside Sales Accounts Assigned Accounts
Field TeamingOutbound/ Inbound
Inbound only Customer Service
E Commerce E-Channel
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Sales Process
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Types of SellingTypes of Selling
• Select accounts• Narrowly defined• Large account list• Geographic• GeographicDeployment
• Engages in jointplanning withcustomer; lead theirthinking
• Establishesexclusivepartnership withcustomer
• Value addedthrough applicationexpertise
• Justifies higherprices throughsuperior productand/or ability tomeet “needs”
• Price/ performancecomparison
Selling Technique
• Articulates visionregarding whereindustry andcustomer are goingand can go in thefuture
• Guides customertoward solutionswith long term
implications
• Focuses oneconomics ofcustomer’soperation
• Proactively identifiesways to improvebusiness results
• Sell solutions thatimprove market
share, profitability,customer retention,etc.
• Focuses on use ofproduct incustomer’senvironment
• Engineers product tofit customer’srequirements
• Typically repetitivesolutions to
standard, recurringissues
• Differentiates onbasis of productcharacteristics
• Mathes products tocustomer’s “needs”
• Overcomesobjections
• Adds value throughproduct knowledge
• Responds to RFPs
• Submits bids
• Differentiatesproducts based ondelivery, price
Salesperson’s
Activities
• Leads customertoward solutions thatresult in attainmentof volume and profitgoals
• Establishes andgrows long-termrelationships
• Meets growth goalsin volume andprofitability
• Maximizes grossmargins
• Obtains/ retainstarget accounts
• Maximizes volumeand price
• Achieves desiredproduct mix
• Obtains “approvedsupplier” status
• Maximizes volume
Primary Objectives
“Visionary Selling”“Consultative selling”“Design-in selling”“Need satisfactionselling”
“Vending” Also Known As
Product FocusSelling
Feature/ BenefitSelling
Appl icationsSelling
SolutionSelling
ThoughtLeadership
Selling
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Close/Fulfill
Identify Sales ProcessIdentify Sales Process
GenerateLead
QualifyLead
Conduct
Needs
Analysis
DesignSolution
Propose/Negotiate
Steps of the Sales Process
Attrition (hit rates) 10 8 6 4 3 1
Effort (hours) 1.5 4 3 6 6 8
Total Effort (hours) 15 32 18 24 18 8 = 115
Duration 3,5 months
Avg. Sales Value $ 90K
Return on sales effort = $90,000/115 = $780/hour
How can we minimize attrition late in the sales process?How can we increase speed to close?How can we improve the close rate and pipeline yield?
How can we increase transaction size?
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Cross Industry Benchmark Cross Industry Benchmark
TotalTotalTimeTime
SellingSellingTimeTime
5050--60%60%
NonNon--
SellingSelling
TimeTime4040--50%50%
OnOn--SiteSite
ContactContact
33%33%
Other Other
SellingSelling
22%22%
ServiceService
1010--20%20%
Administ ration Administ ration
1010--20%20%
TravelTravel
1515--20%20%
World ClassWorld Class
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Sales Personnel Survey - Benchmark Sales Personnel Survey - Benchmark
8%
12%18%
15%
9%
9%
10%
9%
7%
3%
Market Development/ Prospecting
Account/ Opprtunity Planning
Account Development
Opportunity Pursuit/ Close
Order Entry and Delivery
Implementation Problems
Customer Service
Admin. / Reporting
People Development
Travel and Other downtime
S
a l e s T i m e
S
a l e s T i m e
N o n
N o n - - S a l e s
T i m e
S a l e s
T i m e
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Job Design & Organization Structure
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Existing ADC North America Sales Force StructureExisting ADC North America Sales Force Structure
Large Accounts
National Accounts
C o n n e c t i v i t y
I P C a b l e
W i r e l e s
s
Other Accounts
• Verizon• AT & T• Qwest
• SBC• Bellsouth
• Sprint• Level 3
• Cisco• Nortel• Others
VPVPVP
WirelineDedicated Resource
WirelineDedicated Resource
ConnectivityDedicated Resource
ConnectivityDedicated Resource
ServicesDedicated Resource
ServicesDedicated Resource
Field Sales
Director
Field Sales
Director
Sr. AMSr. AM
AM AM
AM AM
For Each Large Account
VPVPVP
HQHQ OEMOEM EntertainmentEntertainment GOVGOV
Sr. AMSr. AM
AM AM
AM AM
Sr. AMSr. AM
AM AM
AM AM
Sr. AMSr. AM
AM AM
AM AM
Sr. AMSr. AM
AM AM
AM AM
VP ConnectivityVP Connectivity
VP IP CableVP IP Cable
VP WirelessVP Wireless
Sr. AMSr. AM
AM AM
AM AM
Sr. AMSr. AM
AM AM
AM AM
Sr. AMSr. AM
AM AM
AM AM
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Resource Deployment
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Resource Development – 7 StepsResource Development – 7 Steps
Assign accounts to account managers:
Industry/ account knowledge, skills experienceStep VII
Build territories/ segment of equitable size:
Run the sales capacity model for all territories/ segmentsStep VI
Refine sales capacity model:
Based on market testStep V
Develop resource deployment recommendations:
Review for “reality check” with test market.Step IV
Develop sales capacity model:
Build model based on productivity benchmarksStep III
Determine territory/ segment definition criteria:
Consistent relationships, geographical deployment, match skills with opprtunity,coverage of accounts in multiple location, segment issues.
Step II
Determine the optimal territory/ segment size:
Define the average anticipated capacity for each sales roleStep I
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Sales Talent & Supervision
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Sales Talent & SupervisionSales Talent & Supervision
Competency ModelCompetency Model
Assessment Tools Assessment Tools
Skil l AssessmentsSkil l Assessments(Implementation)(Implementation)
Training CurriculumTraining Curriculum
Ongoing DevelopmentOngoing Development
PlanPlan
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Performance Metric
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Return on Sales EffortReturn on Sales Effort
Close/FulfillGenerateLead QualifyLead
Conduct
Needs Analysis
DesignSolution Propose/Negotiate
Steps of the Sales Process
Attrition (hit rates) 10 8 6 4 3 1
Effort (hours) 1.5 4 3 6 6 8Total Effort (hours) 15 32 18 24 18 8 = 115
Duration 3,5 months
Avg. Sales Value $ 90K
Return on sales effort = $90,000/115 = $780/hour
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Sales Compensation
Sales Management System
1
Sales
Segments
&
Objectives
2
Coverage
Model
3
Sales
Process
4
Job Design
&
Organization
Structure
5
Resource
Deployment
6
Sales Talent
&
Supervision
7
Performance
Metrics
8
Quotas
&
Sales
Compensation
Strategy Structure Management
S A L E S O P E R T I O N S A N D T E C H N O L O G I E S
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Why Sales Compensation is Different…Why Sales Compensation is Different…
• Powerful and effective but noisy and difficult to manage• Derivative design process – matches unique job content
• Multi-parties must be involved – sales, marketing, finance, HRand IT
• Best solution is a consensus• It produces positive results and sometimes unexpected negative
outcomes• Most litigated compensation program• Requires constant attention – communication, administration,
interpretation• Not an HR compensation program
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Management: What Drives Sales?Management: What Drives Sales?
• Base Pay• Benefits Stock• Incentive Compensation
• Cash• Security Programs• Incentives
IV. Remuneration
• Career Progression• Recognition Programs• Training
• Individual Goals andNeeds
• Personal Achievement
Programs• Affiliation/ Team
III. Self-Accomplishment
• Appraisal Process
• Program Execution• Reporting
• Measurement
• Engagement Management
II. Accountability
• Speeches
• Learning• Orientation• Leadership Conferences
• Corporate Vision
• Communication
I. Leadership
MethodsDescriptionFactor
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Types of Variable Compensation PlansTypes of Variable Compensation Plans
TargetTarget
TotalTotal
CompensationCompensation
Types of Variable Compensation PlansTypes of Variable Compensation Plans
GainsharingGainsharing Add Add--OnOn 2x Capped2x Capped 3x Uncapped3x UncappedStraightStraight
CommissionCommission
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Two Categories of Sales JobsTwo Categories of Sales Jobs
Income
Producers
Sales
Representatives
Value Created by
Account Owner
Basis of Pay
Examples
Seller
(Relationship)
Sales
Person
Percent of Revenue
(Unlimited)
Real Estate
Traders
Independent Agents
Multi Tier Marketing
Company
(Product/Services)
Company
Manage to Target Pay
Terri tory Rep
Account Manager
Chanel Manager
Product Specialist
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Market Pay – Volume Versus EarningsMarket Pay – Volume Versus Earnings
HighHigh
LowLow
WW--2 Earnings2 Earnings
LowLow HighHigh
Sales RepresentativesSales Representatives
Income ProducersIncome Producers
Sales Terri tory VolumeSales Terri tory Volume
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Managing Pay – Sales RepresentativesManaging Pay – Sales Representatives
HighHigh
LowLow
WW--2 Earnings2 Earnings
LowLow HighHigh
Sales RepresentativesSales Representatives
Sales Terri tory VolumeSales Terri tory Volume
Terri tory RepresentativeTerri tory Representative
Senior Sales RepresentativeSenior Sales Representative
Account Account ExecutivesExecutives
Senior Account Manager Senior Account Manager
Global Account Manager Global Account Manager
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Job Categories – and Pay PlansJob Categories – and Pay Plans
Income ProducersIncome Producers
• Own the accounts – Portable
• Relationship Selling
• Straight Commission
• Target Rate - Unlimited
Sales RepresentativesSales Representatives• Company Accounts• Promote Solution/ Value
• Bonus Plus Incentive• Target Pay – Managed
• Significant Risk
Sales SupportSales Support• Support Company’s Sellers• Extend Solution/ Value
• Base Plus Incentive• Target Pay – Managed• Moderate Risk
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Target Pay – Target Cash CompensationTarget Pay – Target Cash Compensation
Consistent with your company’s:
• Labor Market Rates
• Job Scope
• Budget Dollars
• Internal Equity
Target Total Cash Compensation is the preferred annual pay for achieving
goal: lower pay for less than goal; higher pay for exceeding goal.
Target Total Cash Compensation is the preferred annual pay for achieving
goal: lower pay for less than goal; higher pay for exceeding goal.
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Manage All CompensationManage All Compensation
SalesExpenses
Benefits
Salary
TargetIncentive
Pay
OvertargetIncentive
Pay
Contests
Recognition
Reimbursement
Secur ity Needs
Retention/Non-Sales Pay
At Risk Pay
Outstanding Pay
Focused Efforts
Intrinsic RewardsSpecial Compensation
Sales Compensation
Fixed Compensation
Performance- BasedCompensation
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Upside EarningsUpside Earnings
9070
50
10
30 50
Extent of Upside PotentialExtent of Upside Potential
LowLow HighHigh
120
0%0%
100%100%
TargetTarget
T a r g e t C
o m p e n s a t i o n
T a r g e t C
o m p e n s a t i o n
Influence ofInfluence of
SalespersonSalesperson
160
200
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Performance MeasuresPerformance Measures
Accountable
Assigned to a SalespersonObservable
Measurable AccurateReportable
Accountable Accountable
Assigned to a SalespersonObservableObservable
Measurable AccurateReportable
Bad Measures
Corporate Galactic MeasuresCompliance Measures
Input MeasuresCant Measure Measures
Bad MeasuresBad Measures
Corporate Galactic MeasuresCompliance MeasuresInput MeasuresCant Measure Measures
RequiredRequired
Avoid Avoid
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Types of Performance MeasuresTypes of Performance Measures
Sales Revenue: purchase, continuing, estimated
Profit: gross margin, contribution margin
Items: units, contracts, design wins
Sales Revenue:Sales Revenue: purchase, continuing, estimated
Profit:Profit: gross margin, contribution margin
Items:Items: units, contracts, design wins
Volume ProductionVolume Production
Products: balance, mix, launch, cross-sell, packages
Accounts: new, retention, penetration, growth
Orders: close rate, size, length, receivable
Price Management: discount, rebates, realization, percent
Products:Products: balance, mix, launch, cross-sell, packages
Accounts: Accounts: new, retention, penetration, growth
Orders:Orders: close rate, size, length, receivable
Price Management:Price Management: discount, rebates, realization, percent
Sales EffectivenessSales Effectiveness
Sales Satisfaction: surveys, complaints
Loyalty: persistency, share
Sales Satisfaction:Sales Satisfaction: surveys, complaints
Loyalty:Loyalty: persistency, shareCustomer ImpactCustomer Impact
Productivity: cost per order dollar, sales loading
Channels: partner success, outlet performance
Personnel: balance performance, turnover, ramp rate
Productivity:Productivity: cost per order dollar, sales loadingChannels:Channels: partner success, outlet performance
PersonnelPersonnel: balance performance, turnover, ramp rate
Resource UseResource Use
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Quota DifficultyQuota Difficulty
30% to 40%of Sellers
60% to 70%of Sellers
Bottom 10%of Sellers
Top 10%of Sellers
Minimum Target
100%
Excellence
Quota Performance
# o f S a l e
s p e r s o n
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Formula Types for Sales RepsFormula Types for Sales Reps
Target IncentiveTarget Incentive – –
Commission FormulaCommission Formula
Target IncentiveTarget Incentive – –
Bonus FormulaBonus Formula
TI - CFTI - CF
TI - BFTI - BF
Target Earning are Pre-Established
Expected Volume is Known – Same for Al l Terri tor iesCommission Formula Rate – Pay Percent of Productionto Achieve and Exceed Target Earnings
Target Earning are Pre-EstablishedExpected Volume is Known – Same for All Terri tor ies
Commission Formula Rate – Pay Percent of Productionto Achieve and Exceed Target Earnings
Target Earning are Pre-EstablishedExpected Volume is Known – Differs by Territor ies
Bonus Formula Rate – Pay Percent of Target Pay forPercent of Goal Achievement to Achieve andExceed Target Earnings
Target Earning are Pre-EstablishedExpected Volume is Known – Differs by Territor ies
Bonus Formula Rate – Pay Percent of Target Pay forPercent of Goal Achievement to Achieve andExceed Target Earnings
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Flat CommissionFlat Commission
Features
Illustration
Comments
Pay Mix: 0/100Payment for each sale: sales dollars, gross margin, units
Flat Commission
Rate on Revenue3%
Commission Graph
Commission
Dollars
Sales Volume
Simple, easy to understandSeller owns customersEarnings will vary substantially
3%
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Ramped CommissionRamped Commission
Features
Illustration
Comments
Pay Mix: 0/100Payment for each sale: sales dollars, gross margin, units
Commission
Volume RateTo $3M 2%$3M & Over 4%
Commission Graph
Commission
Dollars
Sales Volume
Simple, easy to understandSeller owns customersPremium paid for high sellers
2%
4%
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Bonus - StepsBonus - Steps
Features
Illustration
Comments
Pay Mix: 80/20Territories: dissimilar size
Earnings: equalized
I. Base Salary
II. Bonus Schedule
% to % of Quota Base<85% 0%85% 5%
90% 15%100% 25%105% 40%110% 55%
>115% 75%
(% of Base Salary)Bonus Schedule
Basis Choices: base salary, midpoint, target incentiveWeakness: steps
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Bonus – Dollar ScheduleBonus – Dollar Schedule
Features
Illustration
Comments
Pay Mix: 75/25Territories: dissimilar size
Earnings: equalized
I. Base Salary
II. Dollar Schedule
% to Dollar
Quota Amt
<96% $1,500
98% $3,000
100% $5,000102% $7,500
104% $10,000
106% $12,500
>108% $15,000
Dollar Payouts
Basis Choices: base salary, midpoint, target incentiveWeakness: steps
S i i
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Bonus – Supervisor MatrixBonus – Supervisor Matrix
Features
Illustration
Comments
Pay Mix: 75/25; base plus bonus matrix
Measures: volume and number of reps achieving goal
Linked: both measures must be excellent payout
I. Base Salary
II. Bonus Matrix
Effective: strong visual impact of results and pay-out
Application: channel manager, product overlay specialist
Weakness: double threshold and cap
Excellence 75 100 125 150 200 250 300
58 83 108 133 172 211 250
42 67 92 117 144 172 200
Volume Target 25 50 75 100 117 133 150
17 36 56 75 92 108 125
8 22 36 50 67 83 100Treshold 0 8 17 25 42 58 75
Treshold Target Excellence
Bonus Matrix (% of Target Incentive)
# of Reps Reaching Goal
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