“In most companies, Sales is the only revenue-generating function. Everything else is a cost center.”
The importance of Sales is thus indisputable. For such an important function, it becomes equally as important to design an appropriate Sales Compensation Plan.
Sales Compensation is often simplified to a discussion between fixed-salary vs. commission-based systems. However, to design an effective Sales Compensation Plan requires a much more holistic and nuanced understanding of the dynamics of Sales Compensation.
To better understand the dynamics of Sales Compensation, we should familiarize ourselves with the Sales Compensation Cycle (SCC). The SCC framework captures the interplay among compensation, motivation, and evaluation—and how these elements drive both effort and results (i.e. sales).
There are 5 key elements which comprise the Sales Compensation Cycle (SCC):
- Compensation Plan
- Motivation
- Effort
- Results
- Evaluation
When designing an effective Sales Compensation Plan, Dawgen Global Team dive into each of these areas in detail to better understand the process, implications, considerations, and interrelationships among the elements. This process results in a Sales Compensation Plan that is a win-win for the organization and the sales team
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