The art of B2B sales is far from simple.
Picture a puzzle with a million pieces; that's what each deal looks like, each one unique, shaped by a myriad of factors. Prospects vary, and so do the ways deals arrive - some knock on the door, others need to be chased down. Because of this variety, the idea of a universal commission plan seems almost quaint. Yet, believe it or not, many companies are clinging to the same old compensation schemes they've had for years.
Consider the wisdom found in a recent HBR piece that critiques the narrow focus on deal size, categorizing them simply as SMB, Mid Market, or Enterprise. This approach misses the mark. It’s crucial first to understand the role of the salesperson. Let’s dive into six typical roles and see how they stack up.
Starting with Inbound Sales Reps, the so-called 'order takers.' They thrive on leads that come to them; no leads, no party. Their compensation? It's a mix of a higher base salary with a sprinkle of commission - stable, but without the big windfalls.
Then there's the Outbound Sales Reps, the bold hunters in this scenario. They build their pipelines from zero, armed with phones and emails, fighting off rejection after rejection. They deserve a reward structure that reflects their effort and resilience, typically a lower base salary paired with generous commissions tied directly to their success.
Next up, Partner-Led Sales. Here, relationships are key. Sales reps working with partners need to leverage these connections effectively. Their pay structure usually consists of a comfortable base salary complemented by a modest commission, designed to reflect the nuances of partnership dynamics.
And don't forget about Event-Led Sales reps. These folks are on the front lines, often traveling, engaging directly with prospects at events and shows. They're the charismatic ones, closing big deals face-to-face. Their earnings? Primarily commission-based to acknowledge those big wins, supported by a solid base salary.
Then there’s the Community-Led strategy. Here, sales reps dive deep into niche communities, leveraging their specialized knowledge to nurture relationships that lead to sales. They typically enjoy a balance, with a solid base salary and attractive commissions to motivate their community engagement.
Lastly, we explore Product-Led Sales. This approach hinges on having an outstanding product. Sales reps here need to be part product experts, part salespeople, guiding prospects through the product’s features and benefits. Their compensation mirrors that of inbound reps but is adjusted to recognize their added product expertise.
Armed with this understanding, crafting a new compensation plan becomes a strategic exercise. You'll need to consider factors like market maturity and growth strategy, assess current performance levels, and ensure the plan motivates effectively. Yes, it's a challenging task, but essential for fostering a thriving sales environment.
Now, after unraveling all these details, do you think your company's sales compensation plan is ready for an overhaul?
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