A Publication of Lighthouse Consulting Services

Sales is the easiest part of the business model to incentivize. Despite this apparent ease or maybe because of it, it doesn’t take much experience to see that sales is the business function that most decision makers incentivize poorly.

The dynamics of sales continue to change even faster than changing times. With a global economy, technological advances, business expansions and mergers, the sales function is constantly adapting to new ways of operation. Cell phones, point of sales computers and telemarketing improve the sales effort and require new ways of doing business.

The sales function does not operate as independently as in the past. In fact, the sales function must work in close relationship with customer service, market research, engineering and advertising. A good salesperson knows how to expedite products and has important relationships with the company.

Client/Customer relationships have become key to the sales function. The emphasis in many businesses has shifted to a relationship sell. The sales person must nurture relationships with existing customers who aren’t ordering at the same time he or she is working with the customers who are ordering.

How Do You Compensate Sales Performance?

Clearly stated objectives are critical to developing sales team compensation. Do you want the compensation plan to encourage increased volume, specific products, profitability, new business, relationships or retention? The objectives of a sales plan should change at least yearly based on market opportunities, competition, new products and technology. Prior to developing any sales team incentives, the objectives must be clearly identified and agreed upon by all key executives.

(Continued on page 2)

Lighthouse Consulting Services 
3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403 (310) 453-6556