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CompensationMaster Newsletter Article, May 2003 Are some members of your sales force subsidizing others?
In some companies, the top producers carry the burden. In
others, it's the mid-level or lowest producing members of the group.
Either way, it's not fair.
Consider treating each sales associate as a separate profit
center.
View each sales associate as if he or she were an individual
company. (Your firm as a whole is then like a big conglomerate.) Does each
sales associate bring in more revenue than it costs to have him or her on
board?
If not, what can you change to generate a profit?
You might want to create a commission structure designed
specifically for new hires that allows you to provide the training and
intensive support services they need to be successful—while ensuring that you
recoup those costs. When associates are ready, they can move up to a commission
structure designed for solid mid-level producers.
You can create another set of commissions for top-producing
sales associates who don't need a lot of support and want to do things their
own way.
When you set up commission structures like this, you can do a
better job of meeting the needs of the sales associates. You can provide a
higher level of support to those associates that want it, while offering
independence to others.
You're also virtually guaranteeing corporate profitability.
When you make a profit on each member of your sales force, it's hard not to
make a profit on all of them put together—which makes your company more
stable financially. But what's more important is that you are treating all
members of your sales force in a fair and consistent manner.
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