How to Change Commissions Paid Out to Sales Team

Introducing a new commission strategy to a sales force can be a daunting process, particularly when the business firm consists of a few hundreds of sales representatives. Changing commissions can result in a lot of disturbances. Here are some finest possibilities that will reduce any disruptions and motivate sales representatives to sell more:

Analyzing the competitive market:
Analyzing the competitive factors in the industry will help in figuring out the possible places of danger. It will also help in figuring out the potential for growth. The top way is to conduct a market investigation and update any information about the commission structures supplied by the competitors. A thorough analysis will undoubtedly make sure regardless of whether the demand for sales representative is affected or not.

Analyzing the requirements of the sales force:
Understanding the desires and concerns of the sales force is quite crucial. Have a casual and friendly method in questioning the demands of the sales force, sales managers and support staff. This will support to make any desired alterations in the current commission structure.

Analyzing the monetary structure:
Economic analysis in terms of income, costs and profitability will figure out the commission structure of a certain business. A detailed interview with the top management will make certain what is the aim of a company.

Designing new compensation plans:
Right after analyzing just about every data obtainable, the next approach is to style a compensation strategy making use of a what-if analysis tool. A what-if analysis can be conducted with the support of software such as MS-Excel. Bear in mind, the new compensation plans should meet the desires of the sales force, should be competitive in the market, and meet the goals of the firm.

Analyzing the threat involved in introducing commission plans:

To analyze the danger involved, the sales force should really be divided into groups and analyze the impact on each group. You ought to also run some test transactions by means of your accounting systems.

Introducing structured commission plans:
The final and the most valuable plan are to introduce the commission structure to managers, sales representatives and support staff. This ensures a appropriate control in the compensation structures and outcomes in managing the whole method with utmost confidence.