Recruiting and Managing Sales Reps/Salesmanship

[DealMaker]

I figured it was about time I gave some value back to this forum, so I have decided to start a thread on recruiting and managing sales reps as well as overall salesmanship.

I've been in sales/sales management (I've even done some copywriting for some pretty big-named marketers) for over 10 years, and I've gotten pretty good at it. Unfortunately, it hasn't been fastlane for me, but I've consistently earned high fiver figures/ low six figures in multiple industries. Not too shabby for a guy under 30 and no college education, although again, not in the fastlane yet or anywhere near the level of MANY on this forum...

I started in the insurance world, and I'm currently managing a sales team of just under 20 reps in a completely different industry. Although I'm not happy about having a slowlane job, currently, I make good money, and I think many of the skills I've learned can be transferred to other arenas as I move into the fastlane.

I'm open to questions from any of you, and I hope I can provide some value here... I thought I'd kick things off and discuss sales rep compensation. I've talked to a few business owners that were looking to build sales teams to sell more of their products, and one of the biggest problems they had in regard to recruiting sales reps was unattractive compensation plans.

When designing a sales rep comp plan, you MUST make it lucrative enough to attract top talent... Unfortunately, you really do get what you pay for in most cases when it comes to sales people.

One of the rules of thumb I look at when evaluating or designing a sales rep compensation plan is to make $50k-$60k attainable with reasonable/par levels of productivity, but to give a better-than-average sales person the ability to earn in excess of six figures. Obviously, evaluating your COGS, OPEX, GM, etc. is crucial to determine what you can afford to payout without causing yourself issues, but $50k+ is about the minimum amount of annual income required to attract average to better than average sales reps.

Of course, this post is intended to be slightly generic in nature to appeal to many readers, but there are often industry-specific factors to consider when creating a pay plan that is solid enough to attract good sales talent.

In addition to looking at the total income opportunity for a sales rep, you must look at how you blend salary/commission.

I have the most experience with:

-Small salary and uncapped commission structure
-Larger salary and monthly/quarterly bonuses/commissions
-Commission-only

A big factor to look at when deciding how to structure your pay plan is your sales cycle... Short sales cycles of a week or less, can be very conducive to a small salary plus commission or a commission-only play plan.

Longer sales cycles of several weeks to several months generally will require a strong base salary to attract professional sales people. The other structures can work in a longer sales cycle, but commissions need to be very lucrative and plan on spending more time finding the right candidate as many people need/want some type of income while building their sales pipelines.

I have to run, but more to come later... Let me know what you guys are interested in, and I'll do my best to be helpful and provide some value.

 

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