Dave Kurlan is a top-rated speaker, best-selling author, sales thought leader and highly regarded sales development expert.
No doubt about it now. This has to be my lucky week. on Tuesday I got to take on the Harvard Business Review, it was Selling Power and Caliper on Wednesday, and today the New York Times! I also learned that my Blog, Understanding the Sales Force, has been nominated for the 2010 Top Sales Blog Award. Of course, my three negative commentaries from this week will assure that I won't win...
On to the New York Times. They ran this article which gets two sides of the story right...
They wrote that you should let your salespeople earn all the money they can. Perfect. They said you shouldn't be concerned if your salespeople earn more than the owners, CEO, management team, etc. OK! Their only warning is that you don't tell your spouse...
As always, there is a third side to this story. The previous compensation strategy works, only if you have very money motivated and very self motivated salespeople. But only the top 6% fit that description. Yes, there are many self motivated salespeople and money motivated salespeople but only the top 6% have both of those attributes and consistently remain that way! Of course Objective Management Group has the data to back that up!
The problem with the rest of the sales population is that they become complacent, and stop motivating themselves to sell, sell, sell.
You shouldn't limit the income your salespeople can earn although many companies cap their sales compensation programs at salary plus up to x% of salary in commissions. It is more important that you know who you have working for you. Yesterday I spoke with a couple of executives who it seemed were paying their ineffective (selection problem) salespeople NOT to sell. High base, probably more than these salespeople required to live on, and their salespeople weren't leaving their houses! If you don't have extremely money and self motivated salespeople on your team, then what combination of salary and commission will keep them motivated enough to continue selling? In that case, less is more.
Compensation is tricky and one size never fits all.
