How to Compensate my Salesforce


One of the most critical plans in any organization and a very common question we receive is... “How should I craft a compensation plan for my salesforce?”

The salesforce represents your brand in the marketplace, makes or breaks your revenue and margin expectations, and serves to advance your company mission and vision. They are the ones in position to create incredibly strong and rewarding client relationships that deliver exponential lifetime value to your organization.

That is, if they are incentivized to stay. And stay engaged.

As an organization that specializes in both client and talent development, Butler Street understands exactly how closely related these two initiatives are; how talent (salesforce) engagement is the key to driving client results. Engagement defined is the relationship your sales professional has with their work. An engaged employee is one that gives tremendous effort to try and achieve organizational goals. This is quite different from the satisfied employee who shows up and just does his or her job.

The impact of this extra effort is measurable. Based on extensive research, companies with high engagement levels have:

  • Employee retention that is 50% higher

  • Customer loyalty that is 56% above average

  • Productivity that is 38% above average

  • Profitability that is 27% higher

So how do you create compensation plans that work? Here are four things to consider, we call them the 4Bs:

1. Basics: The salesforce has items fundamental to their success such as fair pay, a clear understanding of expectations, and the necessary tools to perform their work

a. Target your compensation salary bands commensurate with the market and ensure everyone with the same role/title and expectation is within the same salary band. Make it fair, consistent and trustworthy.

b. Onboard sales with appropriate product/service training and provide continuous access to reports and report cards that let them know how they are doing compared to others and compared to expectations.

c. Provide a commission/bonus structure that rewards them for the work you have asked them to do. For example, if the sales team sells and turns over the account, don’t heavily compensate them on margin in year 3 of the contract. Do however, compensate them for the positive impact the client has and will have on your organization which may be more than a one-time bonus.

2. Backing: The salesforce feels they have the management support they need to be successful.

a. Give each of your sales professionals weekly one on one time. Create a culture where every sales person is coached. Today’s generation cares as much if not more about their forward progress than they do about money. Your culture and processes need to reflect it.

b. Communicate how they can earn more and learn more and change the rules as little as possible.

3. Belonging: Sales feels aligned with the organization and the people on their team.

a. No one wants to work alone. Ensure that there is a team that can help each other find success. Whether you have a couple or hundreds of sales reps, they need to belong to the team.

b. Create opportunities to be recognized and rewarded in public ways. Whether it’s a rewards trip or dinner with the CEO, creating an emotional connection to the company will pay off in the market place.

c. Be sure that the salesforce understands the problems you solve for you customers and how because of that, you make the world a better place. Find ways to recognize when s/he advances that mission.

4. Becoming: Each sales professional feels they are being given opportunities to learn and grow.

a. Create a clear career path for the sales professional and honor the milestones.

b. Titles that reflect status, certifications that reflect performance and bonuses in the form of money and perks are critical here.

c. Special assignments that allow the rep to mentor others and be mentored by executives will not only add to the engagement level of your team, but will strengthen the skills of your organization

Much like Maslow’s hierarchy of needs, delivering on these 4 areas are all necessary to find and keep talented sales professionals. Studies show that the top three reasons people leave organizations are due to lack of trust, lack of a strong relationship with their manager, and lack of meaning in their role. Throwing money at your sales team without addressing these 4 areas will never lead to sustainable results.

If you are looking to build a highly talented, and engaged sales force that will deliver significant and consistent results, then understand this, it’s going to take more than a competitive salary and commission plan. It’s going to require that your plan provides both a financial and a psychological paycheck, drives engagement, and that each of the 4Bs are represented in full. Learn how to engage your sales force and begin to experience growth in less than 30 days. Butler Street’s approach grows businesses! Contact us to get the conversation started.