Sales Commissions Blog | Blitz

What is a commission plan and why do I need it?

Written by Diana Ceballos | 11.09.2016

Understanding the commission plan definition in order to apply it successfully

We have said it and heard it many times, the sales force commission plan is an important driver of sales success. When well-designed, a commission plan attracts and retains great salespeople. But, is there a suitable commission plan definition? This is critical to understand, so let’s find out.

To have a commission plan definition, we need to understand that it represents a considerable source of sales force enthusiasm and inspiration. It is an energizer for salespeople because it represents a positive reinforcement for success. A commission plan is also a motivator to engage in activities and behaviors that will drive high levels of customer satisfaction.

Commission plan definition and its benefits

A commission plan is also a strategy to keep your sales team focused on the right customers. It adapts to new situations over time, so that it can always be that source of motivation. Commission plans are tools that help define a sales rep’s territory assignments, and the process to solve any disputes that may occur.

Knowing the suitable commission plan definition will allow you having a commission plan that will avoid misunderstandings and problems within your sales team. A commission plan relates directly to your sales reps personal goals, which leads to them being even more motivated!

A commission plan should not only be a tactical focus for your organization but a strategic one as well. The key is to create such an effective commission plan, that your sales reps will deliver the appropriate results that aid your company’s growth at a fast and steady pace.

Remember that commission tracking tools like Blitz can help you define and be transparent in your commission plan management. This also will spread an environment of trust and confidence in your sales department. Make sure to show your reps how to achieve their goals and build the foundation of why they are working with you in the first place.

Sources

Action Plan for Sales Management Success: Not Just What to do, But How to do it. Author: Susan A. Enns. 2010: B2B Sales Connections Inc.