How To Compensate Your Sales Team

Screen Shot 2015-09-10 at 2.42.15 PMFiguring out the best compensation plan for your company can be really tricky. If you don’t compensate your team well enough, you risk high turnover. If you pay too much, your sales budget will be too high and your profit margins will decrease; it’s definitely a fine balance, and one that can be difficult to achieve.

The goal is to keep your salespeople motivated and encouraged, but what does that look like in reality? How do you begin to figure out the most effective way to compensate them? And how do you strike a balance between happy sales people and low sales costs?

The good news is that finding the right balance will benefit both your business and your sales team. On the business side of things, your bottom line is positively affected if your sales team is happy. Along with this, if you build a reputation for compensating your employees fairly, you increase your chances of retaining and attracting top sales talent. Overall, everyone benefits from a compensation plan that is well-thought-out.

There’s No One-Size Fits All Plan

Every business is different, just as all sales teams are diverse. Depending on your products and services offered, your compensation incentives will vary. Some companies only pay commission based on sales while others pay solely based on margin. Still, others create plans based on a bit of both.

There is one common thread that every successful compensation plan shares: it’s well aligned with your company’s overarching goals. In short, your sales compensation shouldn’t just be a tactical focus for your organization, but a strategic one as well.

4 Tips for Creating the Best Compensation Plan

  • Know your team. Inbound lead qualifiers need different compensation plans than outbound prospectors. The greater your awareness of your team’s talents and your company goals, the finer tuned your compensation plan can be.
  • Create a trial period. Use a discretionary bonus, stipend or flat bonus for the first 2-3 months—try this in place of a commission plan at first. See how it works and adjust as necessary after the trial period is over. Keep in mind that you want to have a reasonable ramp up for new team members.
  • Do your homework. By compiling data before you put together a plan, you avoid guesswork. Ask trusted connections, organizations you look to for best practices and a variety of online resources—from there you’ll have a much more comprehensive idea of what might work for you.
  • Be firm but fair. Set realistic sales goals. If the goals are too easy, your sales costs will be too high and you’ll end up having to jack up comp plans, creating chaos within your team. If your goals are too high and unrealistic, neither you nor your sales team will be happy; no one wins.

Fine-Tune Your Plan and Ask for Feedback

Once you have your new compensation plan in place, get feedback. Ask people with experience managing sales staff what they think. Whether it’s a mentor or a fellow entrepreneur, ask them to poke holes through the plan. You’ll also want to reach out for feedback from your sales team about any changes they’d recommend.

Remember, you want everyone to be happy and to work hard, so have an open mind when receiving the feedback—these individuals might raise points you never considered. Motivated salespeople can make or break your company, so be sure to include them in the process.

To learn more, download part 4 of The “Triple Guide” On Building an Epic, Scalable Sales Team.


How Do I Find My Niche? 8 Questions to Ask Yourself

As an account strategist, I often see clients with really great solutions that often go overlooked because they’re trying to talk to everybody instead of honing in on one vertical. Focusing in on a particular sector of a target market can help amplify your message to those that have a real need for your business.

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Regardless of what industry you’re in, you need to establish yourself as an expert in your field. In doing so, you’ll also define your niche, which is an essential part of your business’s growth. If you’re struggling to locate your niche (or you don’t know what a niche is) you aren’t alone—it’s something that many entrepreneurs and business owners struggle with. Here are a few tips on how to find (and continually refine) your niche.

What is a niche?

Your company’s niche is the specific area in your target audience where you position yourself as the expert. This is also where you focus the majority of  marketing efforts for your products and services — and where you can differentiate your company from your competitors. This is the space where you really shine—bringing value and providing something no one else can do as well.

Why is a niche important?

Nailing your niche is the best way to gain a competitive edge against other companies. Whether you are a consultant, a small business owner or an entrepreneur, there will always be competition. And the best way to beat your competition? Be the leader in your domain. Your niche (because of your expertise, unique skill set and services) is also the reason why potential clients should buy your products or services over someone else’s. Finding a niche also helps you grow your expertise in a specific area within your industry. Not only does this benefit your business, but it also helps filter out prospects that aren’t a good fit. Once your niche is defined, only relevant prospects come forward because it’s clear that your business is right for them.

How do I find my niche?

To discover your niche,  ask yourself and your team these key questions that help identify areas on which to focus; these will ultimately bring you closer to your niche:

  1. What are your use cases? List your products and service offerings to figure out in what ways your products can be used.

  2. What are your customers’ common pain points? If you have an idea of what your niche is, this is a great exercise to figure out exactly who your target audience is. Find out what frustrations your prospects have in common and use these pain points to define your niche.

  3. What are your key differentiators? Why should someone buy your products or services over your competitors? What sets you apart from the crowd of similar offerings? Distinguish and highlight these differentiators.

  4. What is your solution to the pain points? Once you understand the pain points in your market, it’s time to figure out the solution. Craft this message as simply as possible—your solution needs to be crystal clear. The clearer it is for you, the more clear it will be for a customer.

  5. What is the result of your solution? People love statistics and they love to quantify good results. Find concrete numbers and case studies to prove that your solution is what they’re looking for. For example, “We helped this company save X dollars, generate Y% more sales, and we deliver Z in under 7 days.” Make it memorable.

  6. Who are the decision makers and internal champions? Find out who the key contacts are that you want to speak with and determine what it is about your product that they should care about. Do you solve a personal or a business pain for them? If not, find new prospects. If so, contact these people and work to track down more similar leads.

  7. Where are you hitting home runs? Find out who your top customers are. Do they have something in common? Zero in on this community and learn everything you can about them. What are their pain points? What do they have in common? Is there a trend with your top customers?

  8. Why do your customers love/need you? Don’t just be a ‘nice to have’ company. You want to get to a place where your customers need your product to be successful. Find a way to refine your current offering so it’s a ‘must-have’. It may take some tweaking and refining, but the result will be worth it.

Once you have asked yourself these questions, take your responses and use them to help craft your niche. This will separate you from your competitors and make it easier for your potential customers to decide that you are a better fit for their needs.

During this process, you may hit a wall—but don’t worry, this will give you the opportunity to discover where your business can grow. Even once you feel you’ve nailed your niche, return to these questions and see if there’s room for even further improvement. A niche is specialized, but that doesn’t mean there’s no room to continually refine it.

9 Key Sales Metrics to Track

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When business owners and entrepreneurs ask themselves how they can increase sales, despite being proactive, many fall short of an actionable answer because they overlook the obvious: The secret to increasing sales is understanding your sales metrics. Having a good grasp of your metrics empowers you to recognize areas of improvement; crucial to increasing sales growth.

All aspects of your sales are important, but certain metrics give you more valuable insight than others. While it’s vital to have a handle on your weekly revenue, there are metrics you need to focus on in the long term to improve and reach your goals.

Here’s a look at nine critical sales metrics to track and why it’s important to track them.

Sales Metrics You Need to Be Tracking

  1. Cost per lead – What is the average cost per new customer or lead?

  2. Number of SQLs – How many sales qualified lead do you have per month?

  3. Sales cycle length – What is the closing ratio of all new prospects?

  4. Retention rate – What is your customer churn?How many customers are you losing?

  5. Total outbound emails delivered – How many net new contacts are coming into the pipeline?

  6. Positive responses to emails – How effective are your efforts? Focus on those who have expressed interest in order to determine this.

  7. Conversion rate – Are your emails converting? Figure out the number of qualifying emails to handoffs.

  8. New opportunities generated – How is your campaign performing? Figure out the handoff rate, specifically the number of handoffs for every “x” amount of emails delivered.

  9. New closed deals in the month – How much new revenue is generated each month?

Why metrics matter and how to track them

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By tracking the right metrics, you’ll gain an understanding of where to put your energy and what to adjust in your pipeline. Rather than always looking to the bottom line, you may be able to identify an area on which you can improve easily that will allow you to increase revenue more simply. Small tweaks to your sales process can have a big impact on your overall growth. Moreover, focusing on smaller components makes any increases or decreases easier to track and thus, easier to celebrate or remedy.

It’s also important to ensure that you’re tracking metrics for every campaign at both the team and individual levels. Doing so will give you greater insight into what’s working and what’s not and can also help with professional development, training and new hires.

Although having a handle on weekly revenue contributes to your business’s overall success, focusing on these nine metrics enables you to recognize and develop areas in need of improvement. Tracking them will help to ensure that you reach your goals and that you don’t miss any opportunities.