Know Your Comp Plan & Write Your Own Paycheck
The thing I love the most about commissioned sales is the ability to write your own paycheck. By fully understanding your compensation plan and selling to it, you determine how much money you make. There are 4 keys you can focus on to make sure that you are exploiting your comp plan and earning the most you can. They are know the plan, understand the companies vision, set an income goal and monitor your results.
Know the plan ? what do you get paid for. (the focus here is on commission not base). You?d be surprised at the number of salespeople who have not looked at the comp plan document or do not know all that they get paid for. Get your comp plan document and scrutinize it. Answer the following questions: What pays you the most, what pays the least. What do you get paid for add ons, which add ons pay you the most. The objective here is to know everything you get paid for. This will be much more difficult if your company does not have a plan document. I worked for a large corporation once that did not have a plan document. It was all shared via word of mouth. Ask managers and other sales people to be sure you have the full picture. Your manager or district manager may be the best resource. Often times they will be compensated similarly to you, but based on the entire team's efforts. (The payroll department may be able to help as well).
Consider special incentives too - for Seasonal products or contests that may compensate you. The payoff may be cash or may be prizes or trips. No matter what it is, it adds value to your overall earnings.
Have a clear interpretation of your companies goals in compensation - Why is your company paying you more for selling one item versus another when both items are similarly priced. Why does an insurance company pay you more for new clients versus renewing existing clients. Why does the department store pay you just as much for acquiring a new credit card customer as they do for selling the actual product. Considering these questions may require knowing your companies vision or its strategic plan. It's important that you are in line with the companies vision because often it allows you to understand where a companies money is made. The company, normally will pay you more for what it earns the most on. Sometimes this may not be clear as to what the company's vision or goals are, discovering this though will allow you to provide the best quality solution for your customer and fulfill your customers total needs. A wireless company made more money on plans of 39.99 and higher so the reps were compensated more for selling these plans. The idea is to know your companies ?thoughts? so you can better set your personal selling plans and goals.
Set an income goal - So many salespeople and managers fail to set income goals. They go to work and simply take a stab at it, with no objective in mind. I have had my greatest management successes as a result of setting personal income goals. Win or lose, it gives you something to strive for. A good place to start is to use the figure given to you when you were hired. Most recruiters will have some estimate of how much sales people and managers typically make. Once you have this figure in hand, work backwards, converting it into the product sales necessary to achieve it. Break these down further into monthly, weekly and daily sales goals. This turns $25,000 in commissions into 5 sales a day. It turns a large commission goal into a much simpler and easily attainable - daily objective.
Monitor your results is the final step. This is one thing I wish I knew when I was a new manager. Pilots have dozens and astronauts have hundreds - of instruments used simply to monitor things. Speed, velocity, intensity. These are things you need to be aware of as your work towards your goals. I once had a teacher that used to say, "at the end of the term, you should be telling me what your grade is." He was right. Monitor everything. Sales per time frame, sales ratios and per cent to goal. Use this data and others you or your company have developed to keep you focused and informed. If your company does not provide this critical data, request it or make your own sales logs. Depending on what the results are you may need to get a mentor, seek training, apply more intensity or (hopefully) start thinking of ways to spend all the money you?ve earned.
Sales and management can be exciting and exhilarating. Its even more exciting and exhilarating when you know how to write your own paycheck.
Copyright 2005 - Darryl Gee, madmanager.com
About the Author: Darryl Gee has 18 years of sales and management experience. He shares his entrepreneurial and corporate management expertise on his website http://www.madmanager.com and his message board http://www.madmanager.com/forum. You can ask him your sales and management questions directly at http://www.madmanager.com/ask_now