Compensating Your Sales Reps

Is it time to update your sales force compensation plan? To keep your team selling with gusto, you need to continually review your plan to ensure that it furthers your selling objectives, attracts and retains solid talent and makes sense for your budget. Read on for practical ways you can research and implement a first-rate compensation plan for your selling squad:

Do your legwork. There are many free ways to clue in to the going sales compensation rates for your area of the country and your industry. Check out Salary.com and plug in the job title and ZIP code, or check the local paper for similar listings. Kelly Hayes, president and founder of Milum Corp., creator of the scheduling software Office Tracker, advises entrepreneurs to check out Monster and take advantage of the free business consulting services offered by SCORE.

Determine the base salary, commission and bonus blend. The right mix will benefit your bottom line and keep reps eager to sell. As an example, consider Hayes, who employs four sales reps at her Austin, Texas, company. Reps at Milum earn about a 70 percent base plus 30 percent in commission. And each month, the entire staff has a shot at a bonus equal to 1 percent of sales if the monthly goal is met.

Review the plan annually. You may need to overhaul or tweak it over time. Hayes adds that if a sales team isn't performing, there may be more to blame than just the compensation plan. "When you do go about reviewing your plan, ask the salespeople, one-on-one, how things are going," Hayes advises.

Create a total benefits package. In addition to the base salary, commission and bonus structure, think about the extra benefits that keep employees loyal. Fold flextime, paid vacations, holidays and even a retirement package into the plan. After all, says Hayes, "Monetary compensation isn't the only thing your sales reps are seeking."