Josh Melick - Where Companies Go Wrong With Sales Comp Plans

Setting up your sales team with incentivized pay is critical to driving your staff on to reach their potential with regards to their sales. With this being said however, many companies are getting far too much wrong with their sales comp plans. This is certainly the opinion of Josh Melick, business and sales expert, who has written a fascinating blog post regarding where these companies are making mistakes regarding their sales commission plans.

If you have a sales-based company then these are the mistakes which you must avoid when it comes to setting up the commission plan for your employees.

Failing to Pay

Setting up a sales comp plan is one thing but those companies which are not paying their staff in a timely fashion are really scoring an own goal. This is actually going to do the opposite of what you are trying to achieve regarding your staff. If you have a sales team who are really working hard to earn as much commission as possible, and they are bringing sales into the business, you have to keep up your end of the deal. This means having a robust process in place which can ensure that the employees are paid what they are owed each and every month, is critical. Even if this means paying your employees the following month, once sales are fully processed. The key is delivering on what the staff have been promised. If you don’t do this, you cannot expect to have staff who are fully motivated to deliver, no matter what percentage you will pay them.

Failing to Accelerate Pay

A basic sales percentage is the very least that the business can offer employees, but thee is another area which companies need to focus on in order to help turn those good sellers into superstar sales people. What a business must look at is introducing an accelerator within their comp package, which deals with the very best sellers in the business. Let’s say that you are offering employees a 10% commission on all sales up to $50k, offering them 20% on everything sold above the $50k mark is a great way to drive them to be even better and to sell even more.

Training Pay

When you are bringing new employees into the company it is critical that you are not asking them to work on the commission system, at least for the first 3-6 months. If you do this then you are going to end up only paying them a basic wage whilst they cut their teeth, which is sure to be lower than what they could be earning if they are fully established and making actual sales. Starting these staff off on a higher basic wage with a lower commission percentage is the ideal way to give them the training and the confidence which they need, whilst still earning a good wage for the work which they are doing.

Avoid these mistakes and you can boost sales and increase staff happiness.