The right pay package for your salespeople
How to create the right pay package for salespeople, balancing basic pay, commission, and non-financial incentives to attract, motivate, and retain them.
If you're taking on salespeople for the first time, it can be difficult to know the right pay package. Sales roles are target-driven, so their pay packages tend to be based on results. Packages usually include lots of incentives.
You should spend time finding the right mix of base pay and incentives. Getting it right can help you to attract, keep, and motivate the right candidates, informing them of what is available from the start.
Pay structures for sales staff
The typical pay structure for a salesperson is composed of a relatively low basic salary with extra commission. However, at most levels of seniority, salespeople are amongst the best-paid employees in a business. Plan your recruitment strategy and budget accordingly.
Salespeople's standard pay package is usually called OTE or on-target earnings. This means if the salesperson meets their set targets, they are guaranteed that amount of money. A higher commission can be paid if the person performs beyond this target. Such incentives naturally help to instil a desire for sales.
You can customise pay incentives to align with your business goals. For example, if the company's future depends on the success of a new product, you might want to offer a higher commission for sales of that product. Linking sales with commission in such a way can boost your product's market success.
Non-financial incentive
Don't overlook non-financial incentives as these can be more effective. Securing an order provides its own sense of achievement for salespeople, but when orders are not so easy to secure you need to think of incentives to motivate your staff. Consider various motivational strategies to keep your sales team driven and engaged.