Mar 27, 2024

After-the-fact modifications

Sales is a performance-driven arena. After-the-fact modifications under the guise of generosity will slowly kill motivation while adding risk of errors.

When talking to our clients, we've seen a critical aspect often overlooked in sales commission management: the ramifications of manual adjustments. Post-calculation! This blog post delves into why reliance on manual intervention, under the guise of fairness or generosity, will complicate and undermine the principles of a well-structured sales commission plan.

Sales is a performance-driven arena

The beauty of sales lies in its nature as a performance-driven field, not subject to assessments or personal favoritism. Introducing manual adjustments to an established commission model clouds the transparency essential for a motivated sales force. It shifts the focus from a clear set of objectives to navigate, to a murky terrain where the rules seem malleable based on subjective criteria or personal relationships.

Manual adjustments opens Pandora's box of administrative challenges

Manual intervention introduces practical complications. It adds administrative work not just in Sales management, but also in payroll processing by HR departments and oftentimes in Business control as well. This added layer of administration not only consumes valuable time but also increases the potential for errors, inconsistencies and reduced forecasting accuracy.

Say what you will about your CRM system, but they are designed to offer precise tracking and forecasting. When data integrity is compromised by manual adjustments, the utility of these systems is significantly diminished. Give it the chance it deserves!

Cultivating a Culture of Fairness and Transparency

The manual adjustment of commissions, while perhaps well-intentioned, will lead to perceptions of unfairness. When commission calculations are subject to after-the-fact modifications, it raises questions about the objectivity of the compensation process. This will erode trust in the fairness of the system and diminish the incentive for high performance.

A commission plan that prizes clarity, fairness, and efficiency not only simplifies administrative processes but also upholds the integrity and motivational power of the compensation system.

Customer retention is the key

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What are the most relevant factors to consider?

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Don’t overspend on growth marketing without good retention rates

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What’s the ideal customer retention rate?

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Next steps to increase your customer retention

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