Top 7 Sales Force Compensation Secrets

A reader asked an interesting question about the relationship between sales assessment performance and income.

“If someone does well on the assessment but never earned more than $100,000, should that set off some red flags since $100,000 is the high water mark of sales success?”

It’s a great question.

Sales income is all relative.

1. For instance, it means different things depending on whether the money was earned by an industry veteran of 30 years in the same territory, or a rookie who never sold anything before.
2. It means failure if the salesperson came from certain spaces in the technology business yet huge success if the salesperson came from industrial distribution.
3. It means different things depending on whether the salesperson was in a hunting role – cold calling for new business only – versus an account management role.
4. It means different things depending on whether it was earned in straight commission versus whether it was earned in salary.
5. It means different things depending on whether it was a high ticket complex sale with expected revenues of $5 million annually versus a low ticket transactional sale with expected revenue of under $500,000 annually.
6. The most important factor – it is most relevant when compared with what the other salespeople earned in the company the candidate was employed in.  Was the candidate among the highest, lowest or average performers?  It is all relative!
7. With all that said, there is one more thing to consider.  How much lower were the candidate’s earnings than what you would need the candidate to earn if employed by you?  If you need the candidate to make a jump in earnings of more than 25% in a single year, that might be unrealistic.  The size of the desired jump is a more important consideration than the sum of the best year’s earnings.