Facebooktwitterlinkedinmail

Inside sales compensation is major factor in sales performance management.

Inside Sales Reps’ teamwork can make or break your sales quarter. But, if you do not compensate the team piece of your inside sales reps’ performance, the team will not come together or support your goals.

Inside sales compensation – a group does not make a team.

A group of inside sales reps does not make a team. Calling the group a team and compensation alone do not make it a team.

Inside sales compensation plan must have personnel and desired goals aligned. Any arbitrary grouping does not constitute a team purpose nor does it possess team synergies, the certain magic that wins.

  • Team goals must differ from individual goals. If the goal can be reached by individuals, making it a team goal does not make sense.
  • Teamwork is an artificial social structure. So, management should not appoint teams until they have recruited team talent, candidates willing and anxious to work with competitive others.
  • Department structure and organization hierarchy must align with team tasks. For example, different product lines may have their respective managers, but all managers must work in common purpose.
  • Mentors can mentor, but they do not manage, so lines of authority and reporting should be clear.Inside sales compensation

Compensation pays base individual performance first.

  • Base salary precedes bonus. Every inside sales rep should have a base compensation scale at hire, say, $4- to $5,000 per month. No commission, no bonus is earned or paid until the individual sales rep revenue covers the base plus benefits, the base rate plus another 25 percent to cover benefits.
  • Pay big commissions early. Inside sales reps will respond quickly to big commissions paid up front – only after covering their base compensation. Sales management can pay a 10 percent commission, but a payment of 20- to 25- percent of the annual contract value provides a significant push and pull on performance. The commission structure can reward up-front cash, early payment options, favorable financing terms, and so on. If the entire team meets quotas, there is more money to disperse as commission.
  • Pay on receipt of cash. Withholding commission payment until cash is received is its own incentive. Among other things, it puts performers on same page as business interests requiring them to act as one.

Inside sales compensation and a team component.

It is not easy to develop and administer a team component that works and remains simple and achievable. Over any period, the individual reps will write different sorts of business. Product lines will vary; combinations will differ; and, individual compensation expectations will complicate things. Inside sales compensation must be flexible and teamwork oriented.

  • Assign markets. Inside sales reps are first responsible for the product line, combination, or territory they have been assigned. They should have clear quotas, caps, or thresholds to meet and be compensated for that performance.
  • Define a team model. Inside sales management must pair sales resources with inside sales talents to optimize teamwork. When team members know their respective and group responsibilities, they can pursue their goals on several performance planes. For example, specific inside sales reps may have accountability for small accounts in one product while large or non-performing products may be assigned to strategic cross-functioning sales reps. The cross-functioning team workers would share leads, mentor finders, and partner on presentations and closes.
  • Communicate clear metrics. Inside sales reps are typically responsible for booking new business. Their base and their commission reflects that performance as measured by key performance indicators like the number of calls made, leads generated, pipeline development and management, presentations made, deals closed, and the like. Other measures like upselling, selling above threshold, or maximizing deals benefit from internal partnerships and teamwork. All metrics require compensation.

Inside Sales compensation requires a strategy, reps’ teamwork, structure, and support to make it work. Once established, it will prove self-sustaining and lucrative for all stakeholders. Structuring team compensation that coordinates inside sales reps and field sales reps is another issue inviting your input and feedback.

Image courtesy of bplanet / FreeDigitalPhotos.net