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

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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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