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Compensating the Sales Force: A Practical Guide to Designing Winning Sales Reward Programs
The classic guide to raising your bottom line with the perfect compensation strategy--fully revised and updated!
Sales compensation WORKS!
Nothing motivates a sales force better than a powerful compensation program. And when your salespeople are motivated, revenue soars. But how do you design a program ideally suited for your business strategy and organizational needs? It's a delicate balance that makes all the difference between profit and loss.
More and more sales leaders have turned to Compensating the Sales Force to help them discover problems in their present system and create a compensation program that works best for their needs. Now, in the second edition of this authoritative, jargon-free handbook, sales compensation guru David J. Cichelli brings you completely up to date on setting target pay, selecting the right performance measures, and establishing quotas. He supplies clear guidelines for building the right compensation plan for any type of firm, of any size, in any industry, and he offers step-by-step procedures for implementing each approach.
In Compensating the Sales Force, second edition, Cichelli has substantially expanded the book's popular formula section, and he provides brandnew examples of:
Income producer plans
Sales rep commission plans
Bonus plans
Incentive plans
Base Salary management plans
The book also includes all-new chapters for global, complex sales organizations and hard-to-compensate sales jobs.
Using the lessons in Compensating the Sales Force, you'll construct and calculate accurate formulas for payout purposes and establish highly efficient support programs, such as sales crediting and account assignment.
Complete with dozens of real-world examples that illustrate important points and demonstrate specific techniques and procedures, Compensating the Sales Force provides all the tools you need to design and implement a sales compensation plan that maximizes profits--and keeps them climbing.
With brand-new chapters on GLOBAL SALES TEAMS amd COMPLEX SALES ORGANIZATIONS!
Praise for the first edition of Compensating the Sales Force
"If your company is refocusing its efforts on sales revenue enhancement, you must read this book. If you want motivated salespeople and superior sales results, act on its content."
Noel Capon, R. C. Kopf Professor of International Marketing, Chair of Marketing Division, Graduate School of Business, Columbia University
"This book provides great guidance for any business leader who wants to capitalize on sales compensation as a tool for driving business results."
Rick Justice, Executive Vice President, Worldwide Operations and Business Development, Cisco Systems
"Dave Cichelli is the premiere sales compensation educator today. You will immediately find this work informative, helpful, [and] thought-provoking."
Mark Englizian, former Director of Global Compensation, Microsoft Corporation
Sales compensation WORKS!
Nothing motivates a sales force better than a powerful compensation program. And when your salespeople are motivated, revenue soars. But how do you design a program ideally suited for your business strategy and organizational needs? It's a delicate balance that makes all the difference between profit and loss.
More and more sales leaders have turned to Compensating the Sales Force to help them discover problems in their present system and create a compensation program that works best for their needs. Now, in the second edition of this authoritative, jargon-free handbook, sales compensation guru David J. Cichelli brings you completely up to date on setting target pay, selecting the right performance measures, and establishing quotas. He supplies clear guidelines for building the right compensation plan for any type of firm, of any size, in any industry, and he offers step-by-step procedures for implementing each approach.
In Compensating the Sales Force, second edition, Cichelli has substantially expanded the book's popular formula section, and he provides brandnew examples of:
Income producer plans
Sales rep commission plans
Bonus plans
Incentive plans
Base Salary management plans
The book also includes all-new chapters for global, complex sales organizations and hard-to-compensate sales jobs.
Using the lessons in Compensating the Sales Force, you'll construct and calculate accurate formulas for payout purposes and establish highly efficient support programs, such as sales crediting and account assignment.
Complete with dozens of real-world examples that illustrate important points and demonstrate specific techniques and procedures, Compensating the Sales Force provides all the tools you need to design and implement a sales compensation plan that maximizes profits--and keeps them climbing.
With brand-new chapters on GLOBAL SALES TEAMS amd COMPLEX SALES ORGANIZATIONS!
Praise for the first edition of Compensating the Sales Force
"If your company is refocusing its efforts on sales revenue enhancement, you must read this book. If you want motivated salespeople and superior sales results, act on its content."
Noel Capon, R. C. Kopf Professor of International Marketing, Chair of Marketing Division, Graduate School of Business, Columbia University
"This book provides great guidance for any business leader who wants to capitalize on sales compensation as a tool for driving business results."
Rick Justice, Executive Vice President, Worldwide Operations and Business Development, Cisco Systems
"Dave Cichelli is the premiere sales compensation educator today. You will immediately find this work informative, helpful, [and] thought-provoking."
Mark Englizian, former Director of Global Compensation, Microsoft Corporation
- GenresBusinessNonfiction
304 pages, Hardcover
First published August 18, 2003
85 people are currently reading
98 people want to read
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Displaying 1 - 8 of 8 reviews
December 28, 2021
Lots of great suggestions to be applied.
January 30, 2025
A useful primer on industry best practices for designing sales compensation.
July 5, 2021
This book is useful for ANYONE who is involved in designing incentive plans for sales people—whether you’re a sales manager, head of sales, compensation professional, sales operations, or HR. Compensation the Sales Force is a soup to nuts manual for creating and communicating incentive plans.
In Chapter 2, Cichelli covers important basic concepts, like pay mix, leverage, and quota distribution. One of the key concepts he explains is that sales compensation plans are based on the specific job. If you have 5 different sales jobs at your company, it stands to reason that those 5 jobs are unique—no 2 jobs do exactly the same thing. Each of those jobs needs to be compensated for the unique achievement expected for the job. So, the number of sales compensation plans should equal the number of sales jobs. There are ways to simplify sales compensation design and administration, but reducing the number of plans below the number of jobs is not the way to do it. Reading deeper, he explains why this is so. If you’re in an organization that struggles with proliferation of comp plans, this chapter will help you figure out where to consolidate and where not to.
Chapter 4 is about job content. The most impactful section to me is the Job Design Errors section. Incorrect plan design works at cross-purposes to the definition of the job, and this is often because a job is mis-documented. Here, Cichelli describes the most common errors and exhorts sales management to fix job design errors before the comp plan design process. This is a very useful starting point for compensation professionals to engage stakeholders—start at the very beginning, which is “what is the job?”
Assessing sales compensation programs’ effectiveness is covered in Chapter 16. Great ideas here to formulate goals and hypothesis, which can be measured once a plan has been in force for 6-12 months. If your sales compensation function is not 100% mature yet, but has the basics covered; implementing the ideas in this chapter will get you to the next level, especially with leaders.
I recommend this book for both beginning and seasoned sales comp designers. It makes a great addition to any HR library or business library (your own or your companies).
In Chapter 2, Cichelli covers important basic concepts, like pay mix, leverage, and quota distribution. One of the key concepts he explains is that sales compensation plans are based on the specific job. If you have 5 different sales jobs at your company, it stands to reason that those 5 jobs are unique—no 2 jobs do exactly the same thing. Each of those jobs needs to be compensated for the unique achievement expected for the job. So, the number of sales compensation plans should equal the number of sales jobs. There are ways to simplify sales compensation design and administration, but reducing the number of plans below the number of jobs is not the way to do it. Reading deeper, he explains why this is so. If you’re in an organization that struggles with proliferation of comp plans, this chapter will help you figure out where to consolidate and where not to.
Chapter 4 is about job content. The most impactful section to me is the Job Design Errors section. Incorrect plan design works at cross-purposes to the definition of the job, and this is often because a job is mis-documented. Here, Cichelli describes the most common errors and exhorts sales management to fix job design errors before the comp plan design process. This is a very useful starting point for compensation professionals to engage stakeholders—start at the very beginning, which is “what is the job?”
Assessing sales compensation programs’ effectiveness is covered in Chapter 16. Great ideas here to formulate goals and hypothesis, which can be measured once a plan has been in force for 6-12 months. If your sales compensation function is not 100% mature yet, but has the basics covered; implementing the ideas in this chapter will get you to the next level, especially with leaders.
I recommend this book for both beginning and seasoned sales comp designers. It makes a great addition to any HR library or business library (your own or your companies).
Read
January 12, 2023Atypical conversation between the first-line supervisor and his or her sales charges would sound something like this: “Now, ladies and gentlemen, we are on the line here to achieve this month’s sales objectives. I have a commitment from each of you to reach and exceed your monthly quota. It’s important to me, and it should be important to you. At our next sales meeting, we will put the numbers up on the board to see whom we cheer and whom we lovingly sneer! If you are having any trouble closing a deal, I can help you. Call me, and we will schedule joint sales calls. Remember, your success is my success!”
Before concluding that the sales compensation plan is overpaying, you might want to look at the cost of sales. Ahigh cost of sales might be a result of overstaffing and not overpayment to individuals. If actual payouts are too high, then examine the quota system first. Perhaps quotas are too easy.
Follow industry practice only if your company is identical to your competitors and if they have found the ideal sales compensation solution.
salespeople are ideally suited to be at the point where customers have risk and uncertainty—the point of persuasion.
“a culture of winning,” “a culture of sales results at all costs,” or “a culture of beating the competition.”
Sellers who are income producers create business revenue. Their value is not in the products they offer, but the relationships they manage. In many cases, they sell commodities. What is unique is their relationship with their customers; they often have the power to take their customers with them when they change employers.
The average pay mix for business-to-business territory sales representatives in the United States is approximately 65/35.
best performers is defined as the 90th percentile of performance among all job incumbents.
Quota distribution establishes the desired difficulty of quotas. If quotas are too easy, the sales compensation plan might overpay. If quotas are too difficult, the sales compensation program could underpay. Apreferred quota distribution target is to have two-thirds of the salespeople reaching and exceeding quota and one-third not.
Before concluding that the sales compensation plan is overpaying, you might want to look at the cost of sales. Ahigh cost of sales might be a result of overstaffing and not overpayment to individuals. If actual payouts are too high, then examine the quota system first. Perhaps quotas are too easy.
Follow industry practice only if your company is identical to your competitors and if they have found the ideal sales compensation solution.
salespeople are ideally suited to be at the point where customers have risk and uncertainty—the point of persuasion.
“a culture of winning,” “a culture of sales results at all costs,” or “a culture of beating the competition.”
Sellers who are income producers create business revenue. Their value is not in the products they offer, but the relationships they manage. In many cases, they sell commodities. What is unique is their relationship with their customers; they often have the power to take their customers with them when they change employers.
The average pay mix for business-to-business territory sales representatives in the United States is approximately 65/35.
best performers is defined as the 90th percentile of performance among all job incumbents.
Quota distribution establishes the desired difficulty of quotas. If quotas are too easy, the sales compensation plan might overpay. If quotas are too difficult, the sales compensation program could underpay. Apreferred quota distribution target is to have two-thirds of the salespeople reaching and exceeding quota and one-third not.
February 6, 2021
Excellent! It’s a must read
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Hey guys. Allow to introduce short comments!
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Precise, great, comprehensive
Hey guys. Allow to introduce short comments!
March 30, 2013
A must-read book on sales and selling techniques for knowledge workers, managers, executives, and entrepreneurs.
October 21, 2015
The best I've found, especially for services sales.
October 26, 2023
Best book on sales compensation. Clear, well organized.
Displaying 1 - 8 of 8 reviews