Keeping an eye on Sales - Association of Independent Corrugated ...

Working Towards A Total
Sales Compensation Pl<strong>an</strong>
By George A. Moretti
Building a comprehensive
Compensation Pl<strong>an</strong> is not
easy. The most import<strong>an</strong>t thing to
remember when creating one is, as
always, Start With The End in Mind!
What outcome do you hope to
achieve with the compensation pl<strong>an</strong>
you are offering?
I would like to suggest a pl<strong>an</strong> that
includes three components:
• Base Salary = calculated on
sales, msf or <strong>an</strong>y other historical
values your comp<strong>an</strong>y has used
• Commission = calculated on
sales dollars, contribution dollars,
margin dollars, msf or profit.
• Focused Sales Objectives =
this is where you pay for certain
services provided that are in
alignment with your goals <strong>an</strong>d
objectives no matter what they
are. These sales objectives do not
last forever but are established
<strong>an</strong>d paid out until the goal or
objective is obtained.
Because of the space limitations of
this article, I am going to look at the
third component only, The Focused
Sales Objective.
This piece of the puzzle is often
the one most often overlooked yet
it c<strong>an</strong> prove to be the component
of compensation that c<strong>an</strong> bring the
greatest return.
To implement this compensation
strategy effectively, it must be tied
to specific comp<strong>an</strong>y objectives.
For inst<strong>an</strong>ce – In order to speed up
payback on a new piece of equipment
you might choose to incentivize new
sales run on this machine at a rate of
<strong>an</strong> additional 2% for a period of
12 months.
Illustration: New sales (from existing
accounts as well as new business)
brought in by sales person, Cindy,
run on the new Bobst: Total –
$300,000. 2% commission = $6000
paid out for 1 year only.
The total sales compensation
increases – as it should – for
rewarding the “services provided”,
which is selling new business for the
new machine!
continued on page 27
ABC Box Comp<strong>an</strong>y Total Sales Compensation Pl<strong>an</strong>
bOXSCORE
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