2 Ways To Compensate Sales Reps

Summary

• Think about compensation in two parts: money and non-money. Money includes closing deals, while non-money includes recognition, praise, attention, approval, perks, and status.

• Recognition and praise can be powerful motivators. Publicly acknowledge achievements, use leaderboards, offer more training and skills, and give positive reinforcement like "great job" or "awesome day."

• Use status symbols like parking privileges or special hats for achievements (e.g., reaching 100 sales) to boost motivation and create a sense of accomplishment.

• Non-money incentives improve job value and motivation, contrary to what some may say.

• On the money side, compensating both Setters and Closers is crucial. Think of your sales process as a funnel where increasing show-up rates is just as valuable as increasing close rates.

• Compensate Setters to incentivize them to get people to show up, even if setting is easier than closing. Both roles are equally important.

Video

How To Take Action

I would suggest focusing on both money and non-money compensation to motivate and inspire your team. Start by introducing non-money incentives, like public recognition and praise. A simple way to do this is to create a leaderboard showing top performers or to publicly acknowledge achievements with a sincere "great job" or "awesome day." Little things like this can go a long way in boosting morale.

A good way of increasing motivation is by incorporating status symbols. You could offer special privileges, like parking spots or unique items like hats with stripes for milestones, such as reaching 100 sales. These symbols create a sense of pride and accomplishment among your team members.

When it comes to money compensation, remember the importance of both Setters and Closers in your sales process. Treat them as equally valuable by rewarding contributions fairly. For instance, offering commissions to both roles can encourage them to improve show-up and close rates, ultimately benefiting your business.

Employ a balanced approach to spark motivation and boost job satisfaction. Mixing these non-monetary and monetary strategies can enhance your team’s performance without breaking the bank. It's all about creating a rewarding environment where people feel valued and engaged.

Full Transcript

you can think about compensation in two columns you've got money and not money all right this very complicated system I don't want to get into the specific a lot of physics behind this so you've got the money you give them for closing deals and then you've got other and so that's recognition praise attention approval perks status things like this if you publicly recognize them if you have a leaderboard if you give them more attention you get you actually train them more you give them more skills you say hey out a boy awesome job great day today you say hey the guy who closes the most gets to park in the nice parking lot and then status like maybe when they close a 100 sales they get a hat with a stripe on it when they close a th sales they get two stripes so when you guys come on the team they're like I want one of those hats right there's all these things that you can do to increase the value of the job outside of money and as much as people sales guys included will be like that doesn't motivate me as sure as does all right it totally does because it makes your life better on the money side there's a couple ways to do this now one of the big decisions we made up front was that we were going to comp Setters and closers the funnel is throughput if I can increase my show up rate by 20% it's just as good as increasing my closure by 20% it makes no difference the business all right and so they were just as equally weighted in terms of their value but again it's easier to set than it is to close just as important but easier but Setter still got commissions as well to incentivize the fact that they would get people to show