How do you determine fair compensation for a sales rep? It’s a meaningful question for any company looking to expand their sales, because ultimately those sales reps will determine how much revenue you can generate. Finding that right number is a balancing act of base salary, incentives, the sales cycle and many other factors. It can be tricky to get it right.
In this episode, host and business coach Tom Ryan considers one example for creating optimized pay in a sales organization. As always, Tom is joined by co-host Jason Pyles. To catch up on the “Four Ps of Sales,” check out: Overview; “Process” (Part 1, Part 2, and Part 3); and “Performance”; and “Pay” (Part 1)
• Introduction, and recap of the Four Ps of Sales thus far
• Focusing on active sales models in this example
• Example: Inside sales rep
- After research, determine a base salary of of $36,000 and a $50,000 plan
- How much does this salesperson need to sell to pay for themselves?
- Determining the breakeven number of sales
- Impact of the sales cycle, training period and payment terms
• Sales never reach 100% of capacity
• How does compensation impact overall financials?
• Sign off, and ways to contact the show
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