Does Changing Compensation Increase Sales?

Posted by Dave Kurlan on Thu, Jul 31, 2008 @ 11:07 AM

Back on Wednesday, I was part of a panel, along with Lee Salz, author of How to Soar Despite Your Dodo Sales Manager and Mike McCue, editor in chief of Sales & Marketing Management Magazine, at the Incentive Marketing Association conference in Boston.

One of the attendees asked how she could change the compensation for her highly paid, salaried producers, in order to provide the incentive to sell more.

If that's all it takes, getting salespeople to sell more would be easy!  One of the many areas we analyze when we evaluate sales organizations is to what degree the salespeople are motivated to earn more money.  In a sales force like hers, we would likely find that the salespeople are not very motivated to earn more money and would likely rebel if the compensation were changed to pay less in salary and more in commissions.  There are two important points to understand:

  1. If a higher risk - higher reward plan would excite them, they wouldn't be working for this company in the first place.
  2. There is an enormous difference between wanting more money ("pay me more") and being motivated to go out and earn more (what must I do to earn another $50,000 this year?")

It all goes back to hiring the right people in the first place.  Salespeople who are looking for security will never be your top producers.

(c) Copyright 2008 Dave Kurlan 

Topics: recruiting, Motivation

Hiring Former Fortune 1000 Salespeople and Sales Managers

Posted by Dave Kurlan on Tue, Jul 01, 2008 @ 16:07 PM

Executives in small to medium sized businesses have a tendency to become ecstatic when they have the opportunity to hire someone who was with a Fortune 1000 company.  They immediately think, "Joe worked at Xorex" or "Suzie used to be at MBI" or "Phil was with Tfosorcim".  And they think, "If they bring some of that big company magic to YSTI-YSTIB, we'll do great!"

If you are considering a salesperson, sales manager or VP of Sales from a big, name brand company, there is a crucial point that executives from smaller companies usually miss.  You probably don't run a large, name brand company.  Your salespeople probably aren't automatically invited in with open arms. Your company probably doesn't have a reputation that precedes it.  Your company probably isn't the market leader. Your company probably doesn't have the lowest prices.

So how would one of these former big-brand salespeople or sales managers fare when they encounter the resistance, challenges, ambivalence and rejection that the rest of your salespeople endure?  They didn't have to deal with it before, and their success was more likely the result of the company they worked for and what they were selling as opposed to their own ability.

Lesson: If your company is the underdog, get excited when you find a candidate who had success as an underdog! If you want to know whether a salesperson will succeed in your business with your unique challenges, use Objective Management Group's Proprietary Recruiting Process for Hiring Sales Winners, built around its Sales Candidate Assessment.

(c) Dave Kurlan 

Topics: recruiting, assessment

How to Hire a Great Sales Team

Posted by Dave Kurlan on Mon, Jun 30, 2008 @ 17:06 PM

I was interviewed for the second in a series of podcasts for and today's topic was How to Hire a Great Sales Team.  Click here to listen to the 8 minute interview.

Topics: recruiting

Fact Based Reasons Why New Salespeople Fail - Data Points

Posted by Dave Kurlan on Sat, Jun 28, 2008 @ 12:06 PM

Did you ever have a new salesperson fail?  Did you ever have one who was highly recommended fail?

Depending on how effective your recruiting, selection and on boarding processes are, you may experience new salespeople that don't work out.  Let's explore some of the factors that impact short-term success.

  • Ramp-Up Time - an important factor in determining whether a new salesperson is succeeding or failing is your baseline ramp-up time.  When you don't know what your ramp-up time should be, you will be guilty of either not giving a salesperson enough time to succeed, or being overly patient, allowing too much time to pass before calling the newbie a failure.  My formula for calculating ramp-up time is to add your sale cycle in months to your learning curve in months and then add an additional 30 days.  So, if you have a six month sale cycle and a three month learning curve, your baseline ramp-up time will be 10 months.  Complicating the matter even more is the fact that some salespeople will not ramp up exactly as the formula suggests, based on three additional factors:
       So we can modify the formula like this: add 2 more months if sales experience is less than five years, add 2 more months if industry experience is less than 2 years, and add 3 more months if compatibility is less than 75%.  Depending on these 3 factors, ramp-up could take as much as an additional 7 months!
  • The Assignment - The assignment is a huge part of this equation.  If your new salesperson is assigned existing accounts, you'll probably be happy with his work unless he quickly loses some accounts.  On the other hand, if 80% or more of the assignment is hunting for new business, you may conclude that the salesperson is failing unless the pipeline gets filled rather quickly with new opportunities.
  • The Assessment - Clues abound here.  As long as you are using Objective Management Group's Sales Candidate Assessment (92% of recommended candidates that are hired wind up in the top half of their sales force within a year, while 75% of those who were not recommended but hired anyway fail within 6 months), the answers are at your finger tips.  Review these four sections:
    • Hunter Skill set - which attributes are missing? 
    • Conditions for Hiring - what are the conditions listed and did you follow them?
    • Likely Problems - are the issues your struggling salesperson is running into listed among the likely problems?
    • Skills - how many are there and are they representative of the entire selling process or just the front end, middle or back-end?
  • The Sales Manager - The sales manager is usually the biggest determining factor of sales success and the first place to look when it appears that salespeople aren't working out. 
    • Supervision - Are new salespeople being micro managed or at least closely managed?  They should be.  Are any of your new salespeople in a remote territory?   A sure fire formula for disaster is a remote salesperson that is not being closely managed. 
    • Expectations - Have expectations been set?  Do your new salespeople know what is expected of them in the first 30/60/90 days, how they will be measured and how they will be held accountable?
    • Support - When two seemingly identical salespeople with identical assignments and territories have opposite results, it's usually because neither of them got the attention, direction, guidance, coaching, support, motivation and accountability that was needed, but one of them was better when it came to figuring out what it would take to succeed (see The Salesperson). 
    • Key Performance Indicators (KPI's) - Sales Managers that manage results (history) are months behind when it comes to being able to impact a salesperson using coaching and accountability.  Sales Managers that manage activity (today) can see into the future and change it.
  • The Salesperson - New salespeople can figure it out when the right mix of these next 14 factors, all found in OMG's Assessment, are in place - The "Figure it Out" Factor:
    • 5+ years in sales
    • 5+ years in the industry
    • Strong Desire
    • Strong Commitment
    • No Excuse Making
    • Self Starter
    • Works well independently
    • Works without supervision
    • Will Prospect
    • Prospects Consistently
    • No Need for Approval
    • Recovers from Rejection
    • Greater than 75% Compatibility
    • Effective Time Management
  • High Turnover Factors - Depending upon these three additional factors, turnover could approach 150%.
    • Compensation - Turnover is higher in straight comission environments.  Straight commission with a long sale cycle will be even worse.  Straight commission with a long sale cycle and a salesperson without the financial stability to stick it out will exceed 100%.
    • Industry - Turnover in insurance (personal lines), telecommunications (long distance phone service) and automotive (car dealers) is very high because many companies in these industries don't have a selection criteria that extends beyond "breathing and willing" and don't invest time and money on development. 
    • Mindset - Companies that are resigned to high turnover and that are making a lot of money despite the turnover don't do anything to change it.
  • Psychological Factors - Every once in a while you'll get a new salesperson who is emotionally unstable and you won't know it until it's too late.  There is no better reason to use a psychological assessment at the time of hiring that to uncover this!
  • Liars - I've even seen salespeople who took one base plus commission sales job while holding down another.  The only thing better than getting paid for not performing one job is getting paid for not performing in two jobs!
(c)  Copyright 2008 Dave Kurlan

Topics: coaching, recruiting, accountability, leadership, assessment

Top 10 Ways to Drive Sales

Posted by Dave Kurlan on Wed, Jun 25, 2008 @ 07:06 AM

Let's assume that you have the right people, compensation, incentives, systems and processes in place.  Are you all set?  Hardly.  You still have to drive sales because in most companies sales don't happen by themselves. The companies that do that the best follow these steps:

  1. Evaluate their sales force 
  2. Set clear expectations
  3. Identify necessary behaviors required for the results
  4. Get buy-in and commitment from their salespeople and managers
  5. Support the effort with training, development and coaching
  6. Hold their people accountable for behaviors and results
  7. Frequently and clearly communicate the expectations
  8. Demonstrate top management's commitment to the expectations, behaviors, training, development and coaching through participation and communication.
  9. Replace non-performers
  10. Hire A players

(c) Copyright 2008 Dave Kurlan

Topics: coaching, recruiting, accountability, leadership, assessment

Landing the Candidate You Want

Posted by Dave Kurlan on Wed, May 07, 2008 @ 21:05 PM

One of my clients is recruiting and, despite plenty of quality candidates to choose from, had failed to hire anyone in a span of ten months, 1200 resumes and dozens of interviews. He loved 5 of the 20 final candidates but, for one reason or another, was unable to land them. The process was being conducted the right way, he was using the assessment at the right time, and the first live interview was conducted properly. In an attempt to rectify his problem, I identified two issues with his final interview.

1) Two much time was elapsing between the first live interview, the final interview and the decision to make an offer.  This was more than enough time for other companies to make offers and it was smart for the candidates to take the sure offers. Candidates are perishables and great candidates have a spoil date of tomorrow!

2) My client was not effectively selling his opportunity. Sure, he presented the company, described the job, showed the compensation package, etc.  Boring.  Not compelling.  I introduced him to my secret weapon.  The recruiting scene at the beginning of the movie Anti-Trust provides a fantastic example of how to sell your opportunity in a compelling way.  As my client said, "that was the missing link" that was preventing his company from generating three times his current revenue.

What are you doing to sell your opportunity?

(c) Copyright 2008 Dave Kurlan


Topics: recruiting

Sales Positions 5th Most Difficult to Fill

Posted by Dave Kurlan on Thu, May 01, 2008 @ 06:05 AM

The 4/30 Issue of Inside Training Newsletter, published by Training Magazine, lists Sales Representatives as the 5th most difficult position to fill.  But that doesn't really tell the story. 

If you have an ordinary sales position with average compensation, it's the 5th most difficult position to fill.  But, in my experience, if your compensation is below average ($96,000), it's significantly more difficult to fill. According to the most recent National Sales Compensation Survey, $67,000 is the average compensation for underperforming and entry level salespeople.  How difficult is your position to fill if the compensation falls below the average at any level of performance but your requirements describe someone better than that?

Chances are, the economy will loosen things up a little and there will be many more salespeople looking for positions as sales for products in their industries dry up.  But employer beware, the first wave of available salespeople will usually be those that are least effective so make sure you are using a world-class sales assessment to differentiate the performers from the actors.

(c) Copyright 2008 Dave Kurlan

Topics: recruiting, assessment

ISBM Sales Excellence Consortium

Posted by Dave Kurlan on Wed, Mar 26, 2008 @ 17:03 PM

On April 24, the Institute for the Study of Business Markets (ISBM) will hold an all day consortium on sales excellence.  The event, to be held at the Philadelphia office of Deloitte Consulting, should be a great day for attendees.  I will speak on the Keys to Recruiting STARS.  You can learn more about the event and you can register here.


(c) Copyright 2008 Dave Kurlan 

Topics: recruiting

Top 3 Mistakes Companies Make When Hiring Sales Managers

Posted by Dave Kurlan on Mon, Feb 25, 2008 @ 22:02 PM

Companies hire sales managers all the time and while some of those decisions are good ones, a lot more of them are ill advised.  Today I'll share the biggest mistakes that companies make when hiring sales managers.

  1. They promote their best salesperson - I won't get into whether the salesperson that manages the most revenue is really the best salesperson but this move is always bad.  First, they lose their best salesperson.  Then, they expect this new manager to transfer his/her skills to the rest of the sales force but that rarely happens.  The new manager knows how to sell, but not how to manage salespeople and to make matters worse, he is too friendly with those who now report to him, making it difficult to hold his salespeople accountable.
  2. They move another manager into the position - In this scenario, rather than promoting a salesperson, they take a marketing manager, HR manager, operations manager, even a technical manager, and put him in charge of sales.  Other managers have never had to deal with the external influences and internal demons that prevent salespeople from reaching their goals.  In most other departments, managers simply set expectations and their people do the work.  In the sales department, even salespeople with good intentions run into rejection, competition, and resistance, and that's only after they conquer their fears and discomforts. In addition, experienced salespeople will find that their new sales manager, who hasn't sold before, lacks credibility.
  3. They hire someone from the industry - In most cases, those who have succeeded are looking to move up into a position of more responsibility while those who have struggled make the lateral move from one company to another.  They often come with baggage and while they seem to fit, most of the time they don't provide the big change for the better that the company expected.

Ultimately, the sales manager must have prior success coaching, motivating and leading a sales force.  They must be effective holding people accountable and know how to select salespeople who will succeed.  This last skill is a challenge, even for experienced sales managers and those who lack experience will likely have all kinds of problems with hiring and turnover.

So, what if you hired one of these three sales managers prior to reading this great piece of advice?  All is not lost.  You may be able to develop managers one and three; and you can always return manager number two to his original role.  You can have your sales force evaluated which includes a look at the impact that your sales manager is having (for better or for worse), identifies the issues that must be addressed, whether or not the sales manager can be developed, and what the development should consist of.

(c) 2008 Dave Kurlan

Topics: recruiting, leadership

Top 10 Steps to Recruit Strong Salespeople

Posted by Dave Kurlan on Mon, Feb 18, 2008 @ 09:02 AM

If you're tired of hiring salespeople who take too long to achieve mediocrity and more often fail to achieve anything noteworthy, some best practices may be in order.

The following 10 Steps are the key to developing a process that yields consistency when hiring strong salespeople.  It takes 1-2 days to show clients how to apply these steps to their businesses so please understand that this article simply identifies the steps. 

1) Always Recruit - the worst time to hire a salesperson is when you need one. You'll be less likely to wait for the right salesperson and more likely to hire the first person who can cover the territory.

2) Ignore the Job Description - provide a job description to the salesperson you just hired, don't use it to do the hiring.  Instead, identify the challenges your salesperson must be able to overcome. To identify challenges, think about the market upon which your salespeople will call - things like size of company, title of the decision maker, number of competitors, pricing compared to your competitor, average size of your account, length of the sell cycle, etc.  These are crucial for filling your talent pool with the right candidates.

3) The Killer Ad - this should not be a description of the job, company or the opportunity. Instead you should describe the candidate you wish to hire by describing the experiences, from Practice #2 above, in which the candidate has already succeeded.

4) Sourcing - While the big job sites like and are proven sources of candidates, you'll get more of the right candidates if you learn how to use their sites.  The field in which you type the job title should always contain the words that candidates will use to search for available jobs. Make sure "sales" is in that phrase.  While your posting won't expire for two months, you must repost your ads every week to continue the flow of resumes.  You should also consider using, the source of the best sales candidates on the net.

5) Automation - use the Rules Wizard in Microsoft Outlook to create automation that will identify incoming resumes, place them in the proper Outlook folder, and reply with an automated message that explains your hiring process and instructs your candidates to take an assessment.

6) Filtering - Most entrepreneurs make a huge mistake when they make decisions as to whether they should include or reject candidates based on their resumes.  Resumes contain very little information that will help you predict whether or not a candidate will succeed in your particular sales position. The best way to filter out the candidates that won't succeed and identify the pool of candidates that will succeed is to assess them early in the process. The most accurate, sales specific assessment is Objective Management Group's Express Screen which does the dirty work for you. It predicts, with 95% accuracy, whether the candidate will succeed selling your specific product or service to your decision makers in your market against your competition with your unique challenges. For more on this you can request a copy of my Sales Recruiting White Paper, The Modern Science of Salesperson Selection.

7) Phone Screen - have a very brief, 3-minute, conversation with only those candidates that are deemed hirable by the assessment.  Purpose of the call is to determine whether they have the experience you specified in your posting, and to make sure they sound like someone you would want representing your company.

8) Face to Face Interview - the primary purpose of the interview is to challenge your candidate and watch how they respond. You should poke holes in every claim they make in their resume to make sure they own what they claim.

9) Final Interview - This is where you get to sell the opportunity to the candidates you want to hire.

10) 90-Day On Boarding - a 90 Day, structured orientation where you teach them, train them, educate them, coach them and prepare them for what it takes to succeed in your business. More detailed information on the on the 90 Day Ramp-Up Plan can be found by Clicking Here.

 Here's a link to a webinar where I speak about this in more detail.

(c) Copyright 2008 Dave Kurlan

Topics: sales recruiting, recruiting, salesperson selection, OMG Express Screen

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Best-Selling Author, Keynote Speaker and Sales Thought Leader,  Dave Kurlan's Understanding the Sales Force Blog has earned medals for the Top Sales & Marketing Blog award for nine consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016, this one earned a Silver medal for 2017, and this article earned Silver for 2018. Read more about Dave

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