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Episode 54

It’s Really Hard to Out-Manage a Stupid Sales Compensation Plan

In Episode 54 Mike continues the series on Common Sales Leadership Sins, and this time he touches the “third rail” — compensation!

If you have complacent salespeople, Mike argues that the very first place to look is at the compensation plan… And he claims to be the very first person to discover and publicly declare that the words COMPensation and COMPlacency start with the same four letters!

As the sales leader, you may be the very best at selecting and developing talent, arming, equipping, and enabling your team, coaching on sales skills and deals, and even at holding people accountable, BUT if your sales comp plan is incentivizing the wrong behaviors and is not driving the desired results, then you have a massive problem.

Mike unpacks his three big pet peeves when it comes to comp plans:

1. Plans that are too flat (not enough difference between what top and bottom-performers “earn”)

2. “Commission Annuities” (commission in name only, commission that really isn’t variable, or paying people in perpetuity to service/renew accounts for deals that were sold years ago)

3. Not rewarding New Sales (paying the same rate/percentage in variable comp for renewing/servicing existing business as for the heavy lifting to develop true new business – major cross-sell/up-sell victories or acquiring net new customers)

Resources mentioned in this episode:

Mike’s Article:  4 Very Common Causes for Lack of New Opportunity Creation

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