If you are running a business, you very well understand how vital it is to place your cards properly and in perfect places. You also understand that it is very important to maintain a healthy and favourable environment for your employees. It is of utmost importance to keep your employees motivated and stick to the job assigned to them. In a production-based business it is more vital to look after these aspects. This is why companies offer incentives to their sales reps, these incentives are called sales commission or is well known in the corporate world as SPIFF, an acronym for Sales Performance Incentive Fund- sales commission plan.
The prime cause behind why companies offer these sales cuts to their sales reps is that it motivates the reps to put in more effort into their work, it acts as a temporary boost for the business and hence offers a short-term boost to the business. Companies keep offering these sales commissions to the reps from time to time on the basis of their performance.
On what basis are these sales commissions offered to the reps
There has to be a certain parameter by virtue of which the commission has to be awarded to the reps, these parameters are specified in a plan, called sales commission plan. A sales plan is designed after a thorough consideration of certain aspects and key points. Earlier, it was done manually through a sales commission calculation spreadsheet but now there are some other alternatives available, which eases the work.
The reps are assigned a certain target or goal called the sales goal which they are supposed to achieve within a certain specified time period. On successful attainment of their target, they are then offered the pre-defined commission.
Points to ponder over and take into consideration while making a sales commission plan
Making a sales commission plan is a very crucial stage for the temporary thrust for a certain business which we talked about earlier. It must be ensured that the plan you are making must be flexible, easy to operate and flawless. Let us throw some light on what points one must take into consideration before making a sales plan.
- It must be ensured that the plan takes into consideration the flexibility. Flexibility, in this case, means that the one single plan must be suitable for all sorts of circumstances and it should be seen that a new plan is not needed whenever a new circumstance arrives. (maybach.com)
- Total accountability must also be ensured. If any error or miscalculation occurs eventually, it must be dealt with and looked after and the problem must be resolved.
- Transparency must be maintained and the plan must offer easy accessibility to the reps such that they can access the data regarding their performance. This would help them find out if they are keeping up to the target or are running behind, if they are running behind, they might hence try and put in more effort thereby helping themselves achieve the goals faster.
Apparently, you cannot expect manual sales plans to offer all these features but you can for sure expect a software, a sales commission software to offer these features altogether in a single plan. In addition, since it is fully digitised, it would also provide high accuracy which is very important for the calculation.
There are many software companies which provide such dedicated sales commission plans for businesses all around. Of all available you may consider ElevateHQ for the job. ElevateHQ offers flexibility, accountability, transparency and easy accessibility which thereby make up the best and most effective sales commission plan for the designated business.