Compensation

Commission plans are designed to increase market penetration and sales volume for the planning period. Over the life of your company, you will likely have many different marketing plans, and therefore, different commission plans.

Sales goals for the planning period -- a month, quarter or year -- should be very specific. Break the company's revenue goals down into pieces of a pie with each piece representing a salesperson and/or territory.

Explain to each salesperson how their sales budget was determines, and show them how the company will help them reach their sales budget goal. Then show them how much money they will make when the commission structure you're using is applied to their budget number.

The best way to get salespeople to overachieve is to develop a bonus opportunity that pays higher commission percentages for all sales over their budget. If you want outstanding sales performance, you have to be prepared to pay outstanding commissions.