{"id":2150,"date":"2013-11-11T21:32:15","date_gmt":"2013-11-11T21:32:15","guid":{"rendered":"http:\/\/somametrics.com\/clone\/?p=2150"},"modified":"2021-10-18T17:54:43","modified_gmt":"2021-10-18T17:54:43","slug":"the-perfect-compensation-plan","status":"publish","type":"post","link":"http:\/\/somametrics.com\/clone\/the-perfect-compensation-plan\/","title":{"rendered":"The Perfect Compensation Plan"},"content":{"rendered":"<p>Driving Sales Funnel growth, meeting revenue objectives, and getting sales teams to meet or exceed sales metrics are among the many challenges faced by our clients. Quite often, these problems are self-inflicted. Large salaries and commissions provide little incentive for sales teams to achieve the metrics that drive Sales Funnel and revenue growth.<\/p>\n<p>In order to meet your targets, you need to introduce a compensation plan that encourages the appropriate behavior and provides the right incentives for your team to work towards their goal. Key Performance Indicators (KPIs) are the activities that drive Sales Funnel and revenue growth. \u00a0KPIs that fail to be established or met, will result in a loss for your target revenue. Example KPIs for Inside Sales might include:<\/p>\n<ul>\n<li>Key conversations with prospects that establish pain &amp; fit. Without frequent conversations with prospects, there will not be enough activity to grow the sales funnel.<\/li>\n<li>A Sales funnel that is in excess of 3X the revenue objective. \u00a0We suggest that clients analyze the sales funnel activity from the past 3-6 months to determine their closing ratios. \u00a0Some of our clients have only required a sales funnel of 1.5X their revenue objective, while others have needed a funnel of 5X, to ensure that their targets were met.<\/li>\n<li>A pre-established number of demos. \u00a0We suggest that our clients determine the ratio of demo presentations to closed deals, to establish this metric. \u00a0One of our clients found that 75% of demo presentations generated closed deals. \u00a0For this specific client, demos were very important and became a top metric for their Inside Sales team.<\/li>\n<\/ul>\n<p>What is the best way to ensure that team members meet or exceed their KPIs? Fifteen years of experience and association with over 100 companies, has led us to this answer. The answer: Build a compensation plan with three distinct components: Base Pay, Performance Bonus, and Commission.<\/p>\n<h2><strong>Three Components of a Perfect Compensation Plan<\/strong><\/h2>\n<ol>\n<li><strong>Base Pay: <\/strong>Companies with a high base salary often have poor performance within their sales teams. Base salary should accommodate a decent quality of life within said region. Base Salary should not be able to provide \u201cluxury\u201d items, keeping incentive for the team to meet their established KPIs.<\/li>\n<\/ol>\n<ol start=\"2\">\n<li><strong>Performance Bonus:<\/strong> Compensation plans must provide a pay-for-performance component to encourage appropriate team behavior.<\/li>\n<\/ol>\n<p>For example: if the monthly KPIs include a specific number of Key Conversations, Sales Funnel growth, and Demos, the representatives should receive a monthly performance bonus for meeting or exceeding these established KPIs. Performance bonuses work very well to ensure that KPIs are met.<\/p>\n<ol start=\"3\">\n<li><strong>Commission:<\/strong> Commission should reflect the achievement of KPIs.<\/li>\n<\/ol>\n<p>For example: suppose that 5% is the highest commission rate given at 100% of quota. \u00a0If a team member has met 100% of quota and 100% of their KPIs, they should receive the highest commission rate. \u00a0If not, the commission rate should reflect their achievement of quota and established KPIs.<\/p>\n<p>Appropriate \u201cSelling\u201d behaviors develop when compensation plans are structured around KPIs and Sales Funnel growth.<\/p>\n<div class=\"elementor-element elementor-element-atxutf5 elementor-widget elementor-widget-ae-post-content\" data-id=\"atxutf5\" data-element_type=\"widget\" data-widget_type=\"ae-post-content.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"ae-element-post-content\">\n<p>You can find more information like this on the SOMAmetrics website under <a href=\"http:\/\/somametrics.com\/clone\/resources\/\"><strong>resources.<\/strong><\/a>\u00a0Or\u00a0<a href=\"https:\/\/calendly.com\/eskinder\"><strong>click here to schedule a call\u00a0<\/strong><\/a>if you would like to speak with one of our associates regarding creating a perfect compensation plan.\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Driving Sales Funnel growth, meeting revenue objectives, and getting sales teams to meet or exceed sales metrics are among the many challenges faced by our clients. Quite often, these problems are self-inflicted. Large salaries and commissions provide little incentive for sales teams to achieve the metrics that drive Sales Funnel and revenue growth. In order &#8230; <a title=\"The Perfect Compensation Plan\" class=\"read-more\" href=\"http:\/\/somametrics.com\/clone\/the-perfect-compensation-plan\/\">Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":447,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"generate_page_header":""},"categories":[57],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Perfect Compensation Plan - SOMAmetrics<\/title>\n<meta name=\"description\" content=\"The Compensation Plan for Sales and Teleprospecting Team should reflect the company&#039;s targets in order to provide incentives and drive desired behaviours.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/somametrics.com\/clone\/the-perfect-compensation-plan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Perfect Compensation Plan - SOMAmetrics\" \/>\n<meta property=\"og:description\" content=\"The Compensation Plan for Sales and Teleprospecting Team should reflect the company&#039;s targets in order to provide incentives and drive desired behaviours.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/somametrics.com\/clone\/the-perfect-compensation-plan\/\" \/>\n<meta property=\"og:site_name\" content=\"SOMAmetrics\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/SOMAmetrics\/\" \/>\n<meta property=\"article:published_time\" content=\"2013-11-11T21:32:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-10-18T17:54:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/somametrics.com\/clone\/wp-content\/uploads\/2017\/09\/coins-currency-investment-insurance.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1280\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@eskidt\" \/>\n<meta name=\"twitter:site\" content=\"@eskidt\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Alicia Assefa\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Organization\",\"@id\":\"http:\/\/somametrics.com\/clone\/#organization\",\"name\":\"SOMAMetrics\",\"url\":\"http:\/\/somametrics.com\/clone\/\",\"sameAs\":[\"https:\/\/www.facebook.com\/SOMAmetrics\/\",\"https:\/\/www.linkedin.com\/company\/somametrics?trk=ppro_cprof\",\"https:\/\/twitter.com\/eskidt\"],\"logo\":{\"@type\":\"ImageObject\",\"@id\":\"http:\/\/somametrics.com\/clone\/#logo\",\"inLanguage\":\"en\",\"url\":\"http:\/\/somametrics.com\/clone\/wp-content\/uploads\/2018\/04\/SOMAmetrics-Logo.png\",\"contentUrl\":\"http:\/\/somametrics.com\/clone\/wp-content\/uploads\/2018\/04\/SOMAmetrics-Logo.png\",\"width\":1605,\"height\":226,\"caption\":\"SOMAMetrics\"},\"image\":{\"@id\":\"http:\/\/somametrics.com\/clone\/#logo\"}},{\"@type\":\"WebSite\",\"@id\":\"http:\/\/somametrics.com\/clone\/#website\",\"url\":\"http:\/\/somametrics.com\/clone\/\",\"name\":\"SOMAmetrics\",\"description\":\"Drive Predictable Revenue Growth\",\"publisher\":{\"@id\":\"http:\/\/somametrics.com\/clone\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"http:\/\/somametrics.com\/clone\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/somametrics.com\/clone\/the-perfect-compensation-plan\/#primaryimage\",\"inLanguage\":\"en\",\"url\":\"http:\/\/somametrics.com\/clone\/wp-content\/uploads\/2017\/09\/coins-currency-investment-insurance.jpg\",\"contentUrl\":\"http:\/\/somametrics.com\/clone\/wp-content\/uploads\/2017\/09\/coins-currency-investment-insurance.jpg\",\"width\":1920,\"height\":1280,\"caption\":\"predictable revenue growth\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/somametrics.com\/clone\/the-perfect-compensation-plan\/#webpage\",\"url\":\"https:\/\/somametrics.com\/clone\/the-perfect-compensation-plan\/\",\"name\":\"The Perfect Compensation Plan - 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