One of the biggest challenges to manufacturers today is figuring out how to structure their compensation system. In a recent article published by Manufacturing Today, Mark Donnolo suggests some strategies centered on a sales performance management plan.
A challenge many manufacturers face is communicating “c-level goals”—the goals developed by company leadership—in a practical way to their front-line sales representatives. Donnolo recommends using a sales performance management plan, or incentive plan, to do so. Company managers should strive to set targets that are tough but realistic, and in areas over which their sales representatives feel they have influence. Consider involving your organization’s sales leadership in the incentive planning process.
Secondly, manufacturing managers need to find ways to keep their sales representatives motivated throughout the duration of the industry’s long sales cycle. Here are some options that move beyond the typical sales compensation plan:
- Used mixed incentives within the sales performance management plan—the longer the sales cycle, the bigger the base salary portion of the paycheck, relative to the commission portion.
- Implement some short-term incentives that reward progress towards a sale without requiring completion of it.
- Develop some incentives that encourage role longevity in order to decrease turnover.
- Consider other non-financial incentives to help you retain a happy sales staff.
The last challenge that Donnolo discusses is that of establishing accurate and achievable quotas. An important first step is attaining detailed metrics off of which to base your numbers. Use account planning and forecasting, and involve team members from various departments in order to develop thorough and accurate quotas.
For more details, read the article in full at Manufacturing Today.