MOTIVATIONAL COMPENSATION FOR REP FIRMS

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MOTIVATIONAL COMPENSATION FOR OUTSIDE SALES
SUPERSTARS
CPMR 201 January 13, 2009 Arizona State
University Bryan Shirley, CPMR President CEO
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Draw a pig
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Please..

• CELL PHONES
• EATING, DRINKING, CHEWING
• TALKING
• QUESTIONS -- PLEASE ASK !
• BIO BREAKS
• BREAK TIME ??
• WORKSHOPS

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BRIEF BIO NOTABLES

• COLRUD PAY PLANS
• STRAIGHT COMMISSION FOR YEARS
• POOL PLAN (AND VARIATIONS)
• COMMISSION W/RECOVER. DRAW
• COMMISSION W/NON-REC DRAW
• SALARY PLUS BONUS
• RepNet no-name Group SHARING!
• Consulting to Rep owners

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today

• SOME PRE-THINKING
• ONLY FIVE PLANS (5000 variations)
• PLAN STRUCTURES (the best way)
• IMPACTS AND INFLUENCES
• WHAT SHOULD YOU USE
• COMPENSATION PERCEPTIONS

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COMPENSATION

• AUDIENCE SURVEY TIME how many
  people think they use

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WHAT IS THE MISSION STATEMENT OF YOUR COMPANYS
PAY PLAN ?
BRIEF ONE LINERS
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WHAT IS THE MISSION STATEMENT OF YOUR COMPANYS
PAY PLAN ?

• WE WANT OUR SALES COMPENSATION PLAN TO
• ________________

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COLRUD-LOWERY

• EXCEED GOALS-ALL CUSTOMERS
• GROW PROFITS OF COMPANY
• MAXIMIZE FACE-TO-FACE SELLING AT THE HIGHEST
  DOLLAR, HIGHEST CONFIDENCE FACTOR NBOs (CLOSE
  ORDERS!)
• MOTIVATE AND COMPENSATE SALES FORCE TO
  PROACTIVELY AND VERY ACTIVELY DO INCOME
  GENERATING SALES ACTIVITY

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. Another idea TO MAXIMIZE

• Salesperson motivation, knowledge, ability and
  performance
• Customer satisfaction and service
• Principal satisfaction, service, principal
  management
• Company synergy, teamwork and mutual support
• Openness in communication and with financial
  information

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PAY (COMPENSATION) IS REWARDED FOR THE EXPRESSED
INTENT OF SHAPING A SALESPERSONS BEHAVIOR
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PAY PLANS ONLY FIVE(but 5000 variations !)

• STRAIGHT SALARY
• SALARY PLUS BONUS
• SALARY PLUS COMMISSION
• STRAIGHT COMMISSION
• POOL PLAN (PROFIT SHARING)
• OTHER PLANS.. ?????

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PAY PARAMETERS (all plans)

• OBJECTIVE
• TENURE
• EXPERIENCE
• COMMISSION
• REPORTING
• NBO CLOSURE
• FC ACCURACY
• LEADS (ALL)
• SALES CALLS
• SURVEYS

All are MEASURABLE
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PAY PARAMETERS (all plans)

• SUBJECTIVE
• TEAM PLAYER
• NON-SALES TASKS
• INPUTS-CUSTOMERS/PRINC.
• COOPERATION
• GROWTH/STRETCH
• CREATIVITY
• RAPPORT
• PROFESSIONALISM
• COMMITMENT

All are GUT FEEL
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STRAIGHT SALARY

• FIXED INCOME FOR ENTIRE YEAR
• SET BY REP FIRM OWNER/MGR
• SAME AMOUNT EACH PAY PERIOD

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STRAIGHT SALARYthe good stuff

• EASY/SIMPLE TO IMPLEMENT/MANAGE
• SECURE AND SAFE INCOME
• HELPS FACILITATE TEAMWORK SALES
• ACCOUNT/TERRITORY CHANGES EASIER
• PROMOTES MORE CUSTOMER SERVICE
• CLEAR AND UNDERSTOOD BY ALL
• MANAGER CAN DIRECT PRIORITIES
• NO IMPACT WHEN MAJOR CASH IN/OUT

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STRAIGHT SALARYthe downside...

• LIMITS SALESPERSONS INCENTIVE
• TOP PERFORMERS SUBSIDIZE TEAM
• SALES STARS MAY NOT COME/STAY
• WONT HAVE AGGRESSIVE SALES
• MORE DIRECT MANAGEMENT OF SALESPERSON ACTIVITY
  REQUIRED
• DOESNT MATCH FIRMS COMP PLAN
• CANT BE USED AS A TOOL TO SHAPE THE
  SALESPERSONS BEHAVIOR

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SALARY PLUS BONUS

• FIXED SALARY FOR YEAR
• USUALLY IS 70-80 OF W2
• SALARY SET BY REP OWNER/MGR
• BONUS PAID PERIODICALLY
• USUALLY ONCE PER YEAR
• SOMETIMES 2X, OR QUARTERLY

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SALARY PLUS BONUSthe good stuff

• FLEXIBILITY FOR OWNER/MANAGER
• BONUS AMOUNT VARIABLE (/-)
• ADJUST FOR FAST GROWTH (OR LOSS)
• SECURE INCOME FOR MOST OF W2
• ACCOUNT CHANGES EASIER
• MANAGER CAN DIRECT PRIORITIES TO BALANCE NEAR
  TERM/LONG TERM

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SALARY PLUS BONUSthe not so cool stuff.

• MORE COMPLEX TO ADMINISTER
• REP SUCCESS WITHOUT GROWTH
• CAN CREATE UNCLEAR GOALS
• DIRECT MANAGEMENT REQUIRED
• SOMEWHAT LIMITS INCENTIVE
• SALES SUPERSTARS GET SUSPICIOUS
• MAY SEE PERIODIC BEHAVIOR SPIKE
• SOMEONE IS PLAYING GOD (bonus)

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SALARY PLUS COMMISSION

• FIXED SALARY (NOT A DRAW)
• USUALLY IS 40-60 OF W2
• SALARY SET BY REP OWNER/MGR
• SALARY IS SAME RANGE FOR ALL
• COMMISSION FROM ACCOUNTS
• COMMISSION PAID PERIODICALLY
• MONTHLY, QUARTERLY, 2X/YEAR
• can be higher, with small comm.

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SALARY PLUS COMMISSIONgood because.

• PROVIDES BASE INCOME (LIVABLE)
• PAY FOR PERFORMANCE AT ACCTS
• AUTOMATICALLY ADJUSTS (/-)
• LESS DIRECT MGT REQUIRED
• INCENTIVE FOR ASSERTIVE STARS
• FOCUS ON INCOME GENERATION
• BIGGER CHECKS TIED TO SUCCESS
• FOCUS ON NEW ACCOUNTS
• ASSISTS WITH CASH FLOW (owners)

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SALARY PLUS COMMISSIONpotential bummers.

• MORE COMPLEX TO ADMINISTER
• NO SALES NO COMMISSION
• TOUGH TO CHANGE ACCOUNTS/TERR
• LESS TEAM SELLING ENVIRONMENT
• LESS ABILITY TO DIRECT NON-SALES ACTIVITIES BY
  (STAR) SALESPEOPLE
• GAIN/LOSS OF LINES AND
• GAIN/LOSS OF BIG ACCOUNT AND

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STRAIGHT COMMISSION

• PERCENTAGE OF COMMISSION GOES DIRECTLY TO REP
• DETERMINED BY ACCOUNTS
• PAY FOR PERIOD PRIOR 30-60 DAYS
• WE WILL ALSO INCLUDE PLANS THAT ARE STRAIGHT
  COMMISSION WITH RECOVERABLE DRAW
• draw monthly vs. commissions periodically

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RECOVERABLE DRAW

• PAY BTW 3000 - 6000/month (draw)
• FOR EXAMPLE 4000/month draw
• COMMISSIONS PAID 2x/year (6 mons)
• IF 6 Month commissions are
• exactly 24,000 --- ZERO (0) commission
• if they are 44,000 -- 20,000 check
• if they are 20,000 ? (-4000) ? To B.E.
• THIS IS TRULY A STRAIGHT COMMISSION PLAN (no
  guarantee)

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STRAIGHT COMMISSIONneat things...

• TOTALLY PAY FOR PERFORMANCE
• AUTOMATICALLY ADJUSTS (/-)
• LESS DIRECT MGT REQUIRED
• MAXIMIZES FOCUS ON INCOME
• GREAT INCENTIVE FOR STARS
• CAN CREATE REAL SUPERSTARS
• NON-PERFORMERS NEED NOT APPLY
• BIG CHECKS TIED TO SUCCESS
• FOCUS ON NEW ACCOUNTS

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STRAIGHT COMMISSIONwatch out for...

• LOSS OF MAJOR ACCOUNT (OR GAIN)
• LOSS OF MAJOR LINE (OR GAIN)
• NO SALES NO COMMISSION
• REAL TOUGH TO CHANGE ACCOUNTS
• ALMOST NO TEAM SELLING
• LITTLE ABILITY TO DIRECT NON-SALES ACTIVITIES BY
  SALESPEOPLE
• LONGEVITY/LOYALTY BY STARS
• ITS GREAT WHEN ITS GREAT !

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POOL PLAN

• PERCENT OF TOTAL COMMISSION GOES INTO THE
  POOL, OR
• IS TAKEN OUT FOR OWNERS CORPORATE SAVINGS,
  EXPENSES PAID, REST OF GOES IN POOL
• ALL EMPLOYEES (OR, OUTSIDE SALES) EACH GET A
  OF POOL
• OWNERS IN THE POOL/NOT
• SET ANNUALLY (OR 2X/YEAR)

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POOL PLAN EXAMPLE 1 kind of fuzzy, so pay
attention !
TOTAL COMM (monthly) X 40
POOL (IN THE POOL)
distributed to team Joe __ Jane __ Sally
__ Sam __ Patrick __ Patti __ Gina __
George __ percentages all different (based on
parameters) In this example, company pays all
expenses 60 to company, 40 to POOL
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POOL PLAN EXAMPLE 2

• TOTAL COMM X 75
• (Minus 25 to firm)
• TEAM COMMIION
• - ALL EXPENSES
• POOL
• distributed to team (8 emp)
• Joe __ Jane __ Sally __ Sam __ Patrick
  __ Patti __ Gina __ George
• percentages all different (exp info-share)
• 25 to company, 75 to POOL

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POOL PLAN VARIATION

• SET COMMISSION GOALS-monthly
• INCREASE TOTAL POOL PERCENT IF COMMISSION
  DOLLARS DO ALSO
• 40 to pool if commission is 100,000/month
• 42 to pool if commission is 110,000/month
• 45 to pool if commission is 120,000/month
• Baseline (expected/forecasted) is 100k
• What if it drops to 80,000 ?? 38 to pool ?

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PROFIT SHARING POOL

• COMBINES POOL PLAN WITH OTHER PLAN OF
  COMPENSATION
• TAKES A OF THE PROFITABILITY (CASH EXCESSES)
  AND DISTRIBUTES
• EACH EMPLOYEE GETS A OF THIS COMPANY PROFIT
• USUALLY SMALL(ER) AMOUNT

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POOL PLAN

• TO EMPLOYEE (OBJECTIVE)
• TENURE AND EXPERIENCE
• BOOKINGS/SHIPMENTS/COMMISSION
• NBO CLOSURES/NEW ACCOUNTS
• REPORTS ON TIME
• FORECAST ACCURACY/ACHIEVEMENT
• OTHER METRICS (MEASURABLE)
• CALLS MADE, LEADS FOLLOWED THROUGH, ETC

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POOL PLAN

• TO EMPLOYEE (SUBJECTIVE)
• GROWTH IN JOB/POSITION
• TEAMWORK AND COOPERATION
• INPUTS FROM CUSTOMERS/PRINC
• INPUTS FROM DISTY/DEALERS
• PRODUCT KNOWLEDGE (quizzes !)
• PRESENTATIONS TO PRINCIPALS
• DWYSYWD, INIATIVE, EXTRA EFFORT
• DEDICATION AND WILLINGNESS

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POOL PLANgoodies.

• CREATES STRONG TEAMWORK SALES
• SPREADS BIG WINS AND BIG LOSSES
• COMPENSATES NON-SELLING TASKS
• TEAM FOCUS ON INCOME GROWTH
• CREATES AWARENESS OF PL ISSUES
• CREATES PEER MANAGEMENT (esp new)
• ACCOUNT/TERRITORY CHANGES EASY
• CAUSES EFFICIENT ACCT COVERAGE
• EASY TO ADMINISTER UNDERSTAND

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POOL PLANbut, but, but ..

• CAN BE COMPLEX TO ADMINISTER
• SALES STARS MAY NOT FLOURISH
• STARS MAY SUBSIDIZE TEAM
• SOME GET SUSPICIOUS ABOUT
• MAY SEE PERIODIC BEHAVIOR SPIKE
• SOMEONE IS PLAYING GOD WITH
• RESETTING FREQUENCY AN ISSUE

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VARIATIONS TO ALL PLANS

• EXPENSES ! WHO PAYS WHAT
• CAR (ALLOWANCE 300-500)
• TE (SALESPERSON, COMPANY TRIP)
• HEALTH INSURANCE (HASs !!)
• CELL PHONE, HOME OFFICE, ETC
• COMPANY PURCHASE (STOCK ?)
• INFLATED/SPECIAL EXPENSES

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What is COMPENSATION

• EARNINGS yes, obviously (W2)
• HEALTH BENEFITS ?
• CAR ?
• EXPENSE ALLOWANCES ?
• ADDED VACATION/FLEX TIME ?
• Employee COST vs. Compensation

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1099 Independent Contractor

• not included in this talk (nor on exam!)
• NOT an employee of the rep firm
• sub contractor gets of commission
• 40 --- 50 ---- 60 (maybe 70)
• Independent contractor status
• should have their own company
• AUDIENCE ?? 1099 salespeople ??

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GROUP THINK !
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COMPENSATION

• AUDIENCE SURVEY TIME II DEFINE
  YOUR COMP PLAN

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GROUP THINK SOME MORE !
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DEFINING THE THREE TYPES OF OUTSIDE SALESPEOPLE

• FOR OUR PURPOSES TODAY
• STAR/VETERAN/TOP PERFORMER
• MID-LEVEL/GROWTH PERSON
• NEWER PERSON/LOWER LEVEL

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YOUR IDEAS

• FOR YOUR INDUSTRY
• FOR YOUR COMPANY (MARKET)
• OUTSIDE SALESPEOPLE (3 types)
• WHAT DO THEY EARN (W2)
• RANGE LOW to HIGH
• AVERAGE

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YOUR IDEAS what are the

• TOP SALESPERSON (STAR !)
• MID-LEVEL SALESPERSON (Grower)
• NEWER SALESPERSON (not entry)

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GROUP IDEAS ???

• TOP RANGE ______ AVG _____
• MID RANGE ______ AVG _____
• NEWER RANGE ____ AVG _____

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LETS DO SOMEc O m P L a I n I n G !! Those
_at_((__at_... principals customers
disty/dealers employees
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COMPLAINT DEPARTMENT

• STATISTICAL EVIDENCE
• TIME SPENT COMPLAINING ____
• DOUBLES EVERY 5 YEARS X 2
• TIME COMPLAINING 2014 ____ !
• YOU CAN INCREASE WITH HELP
• 32 of all statistics are made up

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Complaint Department
TAKE THAT COMPLAINING TIME and do
something useful CALL YOUR OUTSIDE SALES
FOLKS CALL A FRIEND THAT YOU HAVE NOT
TALKED TO IN OVER ONE YEAR CALL AND ORDER 19
FLOWERS HAND WRITE A NOTE TO SOMEONE
BRAINSTORM ABOUT A NEW COMP PLAN !
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FIVE EASY PLANS !!

• WHICH ONE IS THE BEST ??
• LETS LOOK AT SOME NUMBERS AND STRUCTURES

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EARNINGS SURVEYS

• ERA SURVEY
• 242 COMPANIES
• AVG 10.2 EMP
• AVG 31.6 MIL SALES
• Compensation paid out 60.3 (of total comm)
• Compensation to outside sales 44.7 (of total
  comm)

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EARNINGS SURVEYS

• Outside Sales 81,600
• Disty Sales 67,500
• Inside Sales 37,500
• Gen Office 28,600

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MY REP FRIENDS SURVEY

• 22 out of 29 responding
• TYPE OF COMPENSATION PLAN
• 8 SALARY PLUS COMMISSION
• 7 POOL PLAN
• 4 SALARY PLUS BONUS
• 3 STRAIGHT COMMISSION
• 0 STRAIGHT SALARY
• YOU can do this too !

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MY REP FRIENDS SURVEY

• 0 (ZERO/NONE) USE STRAIGHT SALARY FOR A PAY PLAN

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MY REP FRIENDS SURVEY

• 18 OF REPS USE SALARY PLUS BONUS
• Salary plus bonus 2X year performance
• Salary plus bonus from 40 of profit
• Salary plus bonus based on NBOs, etc..

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MY REP FRIENDS SURVEY

• 36 OF REPS USE SALARY PLUS COMMISSION
• Base 35-45k, and 40 of commission goes
  directly to the sales rep
• Base salary and 40 of all commission over
  10,000 per month goes to Rep, that being the
  monthly cost (bogey)

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MY REP FRIENDS SURVEYSalary plus commission

• Base salary guaranteed, then deducted from 33
  of total commission. Get paid 2x year
  (non-recoverable draw if negative, still get
  salary)
• Base (higher) plus 10 of commission
• Base and 25-35 of commission based upon
  hitting certain quarterly targets. More
  sales/comm, more earnings (variable )

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MY REP FRIENDS SURVEY

• 14 OF REPS USE STRAIGHT COMMISSION
• 40 to Rep after overhead is covered
• Salary draw, but then deducted (recovered) from
  commissions at 33 paid 2X year, company covers
  all exps
• 70 to Rep, pay all own expenses and portion
  of total company exps (own PL)

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MY REP FRIENDS SURVEY

• 32 OF REPS USE (declining) POOL PLAN
• 40 to pool, 10 of that by account to the rep
  who handles the account
• Base salary (40-45k), then pool
• 40 to pool paid monthly, to each

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MY REP FRIENDS SURVEYFor all plans, what is
the individuals earnings (W2) as a percent of
the total commission they generate ? W2
EARNINGS/THEIR TOTAL COMMISSION

• EXAMPLES
• if JoeRep generates 150k to the firm,
  and his W2 is 50k, the answer is 33
• if JoeRep generates 100k to the firm
  and his W2 is 40k, the answer is 40

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EXERCISE

• IN YOUR COMPANY, CALCULATE YOUR ESTIMATE OF THE
  C2W2
• ________ salespersons earnings W2
• then divide the W2 number by
• ________ commission annually
• ______ of C2W2

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CALCULATIONS EXAMPLES

• W2 Commih INDEX-ratio
• 50k 100k 50
• 75k 225k 33
• 100k 250k 40
• 150k 333k 45
• YOURS ???? ____

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W2 EARNINGS AS A OF THE REPS TOTAL COMMISSION

• AVERAGE 38.77 . SO .
• 100k should earn 38,770
• 150k should earn 58,155
• 200k should earn 77,540
• this is a great metric for your company to
  benchmark with other like rep companies (in
  association). Certain things skew craziness.

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W2 AS OF COMMISSION

• 1996 WAS 36
• 1997 WAS 38
• 1998 WAS 38
• 2002 WAS 39
• 2003 WAS 42
• 2004 WAS 40
• 2006 WAS 41
• 2007 WAS 39
• 2008 ?

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REP FRIENDS SURVEY

• OWNERSHIP AS PART OF PAY ?
• PENSION PLANS
• PROFIT SHARING PLANS
• INSIDE SALES COMPENSATION

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INSIDE SALES PAY PLANS

• ALL SALARY
• INCENTIVE PAY ON TARGETS
• INCENTIVE PAY ON PROFITS
• INCLUDE IN POOL PLAN
• SALARY AND POOL PLAN (SMALL)
• INCENTIVES ON SALES TASKS
• NORMALLY NO DOWN SIDE
• BE CERTAIN TO KEEP SIMPLE

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KEYSTONE Compensation Survey

• MULTI-ASSOCIATION
• 479 RESULTS
• MANA 183
• ERA 158
• NEMRA 90
• OTHER 48

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Compensation Survey

• WIDE TERRITORY RESPONSES
• YEARS IN BUSINESS - WIDE (11-30)
• GROSS COMMISSION (250-750k)
• NUMBER OF EMPLOYESS (4-6)
• MORE PURE DATA

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Compensation Survey

• HOW DO YOU PAY OUTSIDE SALES
• 44 SALARY PLUS BONUS
• 19 COMMISSION W/DRAW (non-rec)
• 17 STRAIGHT COMMISSION
• 9 OTHER
• 7 STRAIGHT SALARY
• pool plan NOT listed as option

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Compensation Survey

• HOW DO YOU PAY INSIDE SALES
• 54 SALARY PLUS BONUS
• 32 STRAIGHT SALARY
• 9 N.A.
• 2 STRAIGHT COMMISSION !
• 2 OTHER
• 1 COMMISSION PLUS DRAW

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Compensation Survey

• HOW SATISFIED ARE YOU WITH YOUR METHOD FOR
  OUTSIDE SALES
• 40 SATISFIED
• 28 VERY SATISFIED
• 19 SOMEWHAT DISSATISFIED
• 10 VERY DISSATISFIED
• 3 N.A.

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Compensation Survey

• WHAT PERCENT OF GROSS COMMISSION WENT TO EARNINGS
  (do not confuse with OS comm C2W2)
• 28 said 61-70
• 25 said 51-60
• 14 said 71-80
• 13 said 41-50
• 12 said more than 80
• 8 said 40 or less
• includes all earnings (owners too)

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Compensation Survey

• WHAT PERCENT OF GROSS COMMISSION WAS OUTSIDE COMP
• 22 said 31-40
• 19 said 41-50
• 17 said 21-30
• 16 said 20 or less
• 15 said 51-60
• 12 said 60 or more

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Compensation Survey

• What of total commission income they generated
  did OUTSIDE salesperson earn (W2). This IS C2W2
• 22 said 31-40
• 21 said 21-30 35 avg ?
• 18 said 41-50
• 17 said 20 or less
• 14 said 60 or more
• 9 said 51-60

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SURVEY INFORMATION

• NOT COMPLETELY ACCURATE !
• JUST TO BE USED AS IDEAS
• DONT BELIEVE EVERYTHING YOU READ. 32 STATS
  MADE UP
• PAY PLAN MUST WORK FOR FIRM
• INDUSTRIES AND COMMISSION PAYMENTS WILDLY
  DIFFERENT
• WE NEED MORE !

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WHATS THE BEST BEST ?

• WHATS THE RIGHT PLAN ?
• WHATS BEST FOR EMPLOYEE
• WHATS BEST FOR EMPLOYER
• WHATS BEST FOR BOTH (TEAM)
• WHICH ONE PLAN DO YOU LIKE.

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GROUP THINK AGAIN !Who likes what plan
??..EXPAND A PLAN..
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THE BEST COMP PLAN !

• LETS MAKE THE BEST OF EACH OF THE FIVE PLANS
  (PARAMETERS)
• BRAINSTORM
• THINK ABOUT EACH PLAN AS THOUGH ITS THE ONLY
  PLAN !
• WRITE FORMULA AND PARAMETERS

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WHATS THE BEST OF

• STRAIGHT SALARY
• SALARY PLUS BONUS
• SALARY PLUS COMMISSION
• STRAIGHT COMMISSION
• POOL PLAN

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BCS PICKS

• STRAIGHT COMMISSION
  (33 WITH KICKERS TO 40)
• STRAIGHT COMMISSION 75/25 SALESPERSON PAYS
  THEIR OWN EXPENSES AND EQUAL PORTION OF THE TEAM
  EXPENSES

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KICKERS

• STRAIGHT COMMISSION - TIERS
• 0-150K per year, OS GETS 33 OF TOTAL
• 150-200k, OS GETS 35 OF TOTAL
• 200-250k, OS GETS 37 OF TOTAL
• 300k, OS GETS 40 OF TOTAL

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PAY PLAN PERCEPTIONS

• YOU CAN HEAR A PIN DROP !
• VERY EMOTIONALLY CHARGED
• WERE CHANGING YOUR PAY
• DIFFICULT TO DISCUSS AS TEAM
• DIFFICULT TO PLAY GOD
• IMPOSSIBLE TO SATISFY ALL

83
EMPLOYERS AND EMPLOYEES
84
PAY PLAN PERCEPTIONSWHAT SALESPEOPLE WANT

• VERY REWARDING WITH LOTS OF
• MORE THAN FAIR (vs. FAIR !)
• PAID CONSISTENTLY TIMELY
• NEVER CHANGING (if above are true)
• EFFORTS WITHIN THEIR CONTROL
• EASY AND CLEAR TO UNDERSTAND
• OBJECTIVE PERFORMANCE REVIEW
• MOTIVATES THEM TO STRETCH/GROW
• ACCURATE ALE REPORTS/FEEDBACK

85
PAY PLAN PERCEPTIONSWHAT EMPLOYERS WANT

• SUPER MOTIVATING TO GROW SALES
• CONSISTENT (SAME PLAN) FOR ALL
• PROFITABLE FOR FIRM TO EXPAND
• LONGTERM CUSTOMER RELATIONSHIPS
• PROUDLY BRAG (TO POTENTIAL LINES)
• CREATES LONGEVITY AND LOYALTY
• CREATES WILLINGNESS, DEDICATION, AND
  COMMITMENT TO THE TEAM

86
PAY PLAN PERCEPTIONSWHAT EMPLOYERS WANT

• EASY TO MANAGE AND CALCULATE
• REWARDING WITH LOTS OF TO OSE
• FAIR (EQUITABLE TO ALL)
• CHANGES ONLY WHEN NECESSARY
• EASY AND CLEAR TO UNDERSTAND
• OBJECTIVE PERFORMANCE REVIEW
• CREATES PERSONAL MOTIVATION TO
  CHANGE/STRETCH/GROWTH

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PAY PLAN PERCEPTIONS

• 1 MOST IMPORTANT TO SALESPEOPLE
• 1 MOST CHALLENGING THING FOR OWNER(S) TO
  CREATE ACCEPTABLE
• 1 MOST IMPORTANT THING TO GET PROACTIVE
  COMMISSION GENERATION
• 1 THING THAT KEEPS GOOD PEOPLE
• 1 THAT YOU CAN TOUT TO OTHERS IF
  ITS SUCCESSFUL FOR TEAM

88
PAY PLAN PERCEPTIONS

• MUST COMMUNICATE COMPLETELY
• TRY TO KEEP IT EASY AND CLEAR
• DONT CHANGE UNLESS NEEDED
• RUN NEW PLANS ON PREVIOUS YEARS
• MEASURE COMMISSION DOLLARS
• NO TWO FIRMS HAVE SAME PLAN
• EMPLOYERS THINK LIKE EMPLOYEE
• EMPLOYEES THINK LIKE EMPLOYER

89
PAY PLAN PERCEPTIONS

• COMPLEXITY OF SALES
• DURATION OF SALES CYCLE
• NON-SALES FUNCTIONS REQUIRED
• ALIGNMENT WITH YOUR GOALS
• .. AND WITH YOUR PRINCIPALS !

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PAY (COMPENSATION) IS REWARDED FOR THE EXPRESSED
INTENT OF SHAPING A SALESPERSONS BEHAVIOR
91
PAY WAY ON PAY DAY

• BE SURE YOUR PAY PLAN IS
• CURRENT AND APPROPRIATE
• PAYS FOR RESULTS (performance)
• HAS FAIR AND REACHABLE GOALS
• QUANTIFIABLE, UNDERSTANDABLE
• EQUITABLE WITHIN FIRM TO ALL
• COMPETITIVE WITH OTHER REPS
• SUCCESS IS IN CONTROL OF REPS

92
YOUR BEST PLAN

• INVOLVE TEAM
• CONSULT W/REPS
• GET GOOD DATA
• TEST THE PLAN
• COMMIT TO IT

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Many thanks to many folks
Bill Allen Jack Berman Tim Coakley Alison
Cody Mark Conley Mel Daskal Gene Foster
Ray Hall Susannah Hart Scott Lindberg Gerry
Newman Glenn and Joan Shirley Bob
Trinkle MANA
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THANK YOU, ANDGOOD LUCK !
BRYAN SHIRLEY, CPMR bryan_at_MANAonline.org