In sales and marketing, there’s no greater motivator than money. With that in mind, here are a few ways to adjust your comp strategy so it energizes your workforce and sends revenues soaring:

1. Base commissions on net profit rather than gross profit or sales: A high percentage of companies have seen their net profits decrease over the past few years, despite the fact that sales remain consistent. Why? Because in this economy,  a lot more salespeople are willing to play Let’s Make a Deal — offering customers concessions that could be costing your company revenue. A lot of organizations avoid this problem by adjusting their comp strategy so commissions are based on a percentage of the net profit each sale delivers, rather than the overall price tag.
2. Ensure substantial rewards for closing repeat business: Loyal customers are the life blood of any organization. Still, most salespeople are trained to focus primarily on closing new business while “keeping an eye” on existing customers. Unless there’s ample incentive to hit certain levels of repeat business, some salespeople won’t pay much attention to existing customers. When that happens, the company loses out big time — remember, it costs much more to bring in a new customer than to keep an existing one.
3. Create bonus levels based on account potential: Salespeople need to have an incentive to press for more volume or longer-term contracts. If the comp strategy is set up to offer more substantial rewards for closing accounts that are more lucrative over a long period of time, salespeople will work harder to develop longer-term highly-profitable relationships with buyers.
4. Ask for feedback on non-cash rewards that would motivate salespeople to close more: With so many companies looking to cut costs, it may not be the ideal time to recommend major changes to the bonus plan (even if they’d end up making the company more money). Instead, it may be a better idea to collect feedback from salespeople about what types of non-cash incentives would motivate them to increase profits. Encourage them to get creative, and perhaps even set a team benchmark the entire department can shoot for and celebrate together.

Do you think these comp strategies would really work? Can you think of any creative comp ideas we missed here? Let us know in the Comments Box below.

Tags: bonuses, commissions, comp, Compensation, compensation strategy, incentives, marketing, rewards, sales