Just in time for compensation season, Hubtek and Prosperio Group are here to Tell You About the top 6 sales compensation mistakes that you definitely want to avoid.
Q&A
1) How often should numbers be given to sales reps to let them know their performance?
This one is pretty easy…as often as you possibly can. Weekly is the longest you should wait and daily would be better. In fact, if you had a dashboard that could show them the pay they just earned for the load they just booked…this is EVEN better. But, really…you want to show them the pay they will earn BEFORE they book the load. Because this is when they can change the deal to improve their pay. This is why it’s important to have transparent compensation plans, but don’t mistake this for meaning that I advocate transactional plans. Transactional plans pay for each load individually. Yes, this gives reps the ability to calculate the pay for every load, but it encourages only short-term thinking. They may only think about one load at a time rather than how they can build relationships to increase the aggregate volume of loads.
Ok, so you say your reps don’t have that problem. They know that building relationships with shippers means they will get more loads over time. They may also know that building a good relationship with their customers will decrease their price sensitivity and enable them to get higher prices over time. But if you are paying the same rate for the first load in a month that you are paying for the 200th load, then you are doing nothing particular to motivate them to get the 201st load or the 210th load. At some point, performance puts someone into a zone that few people will achieve, and they should be paid EXTRA when they get there. This also creates the motivation for other people to want to reach that level, because the payout is even greater when they get there.
You need both a transparent compensation plan AND an aggregated compensation plan that provides leverage – extra pay when performance gets to a level that would be considered “excellent.”