Selecting Your Sales Commission Metric
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For companies that don’t have a self-service customer acquisition model, no other function ties more directly to financial results than Sales. Because of this, it is critical to have strong alignment between their sales commission plan and their desired business results. If the sales team makes a ton of money but the company isn’t also celebrating amazing results, there’s a problem. The foundation for this alignment lies in selecting the right sales commission metric.
The best sales professionals do whatever puts the most money in their pocket, given the rules you put in front of them (their sales commission plan) and within ethical and legal limits. Because of this, the best sales reps are often referred to as “coin-operated”, and it’s not an insult. In fact, they should do whatever puts the most money in their pocket as guided by their sales comp plan. This means that it’s up to you to make sure there is close alignment and synergies between that and your desired business results. If there is ever a situation where a sales rep makes a huge pile of money and you’re pulling your hair out in frustration (instead of also jumping for joy), you messed up somewhere – not them.
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Note: Some of the concepts described in this article are also covered in a video later in this same course module.