Channel Sales Enablement: Part 3 Compensation

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Channel Sales Enablement: Part 3 Compensation

Compensation is one of the top topic I get calls about. Compensation plans are a double edged sword. On the one hand, it is money out of revenue. On the other hand, it is the carrot that keeps your sales people selling and your revenue coming in.

All too often management takes a line in the sand approach to compensation because the sales team is making too much money. I have seen this in direct sales and through the channel. The C-Suite likes the revenue but hates to pay for it. They look for any way they can to cut the corners on compensation.

One thing to note: When you change the comp plan, you lose trust from your sales team. Without trust, the relationship is broken. Think about that next time you decide to change the comp plan without input from the people whose very bank account will be (usually adversely) affected. Capeesh?

Comp Plans should be designed to incent the sales team to sell the high margin products, long term contracts, and new products. It doesn't have to be all money either.

I have seen some pretty complex plans. See my last blog post: Keep It Simple.

The biggest challenge today is that hardware sales are declining. Cloud service sales have low monthly recurring, which in turn commonly means lower commissions. So how does a salesperson used to selling $10K of hardware, still make ends meet when selling $2K of services?

One last thought for you: Just because there are agents/channel partners willing to sell your stuff for a commission, doesn't mean that anyone can make a business out of just selling your stuff. It might be that you have to settle for scraps because you are just the dessert or toppings that are being sold after the salad and main course. Don't get mad about it. Understand it - and either change it or live with it.

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