Sales Manager Salary
Is sales manager salary based on the performance of their team? CSO Insight’s Sales Management Optimization 2013 Key Trends Survey studied 1,700 respondents. And guess what? According to most, sales companies should. Accordingly, I support the majority’s position. However, flaws exist within this paradigm. I don’t agree with most sales compensation modalities. Moreover, I don’t support what typically constitutes a sales manager’s compensation.
Of those people and companies surveyed, 62.6% of companies compensate sales managers based on their team’s attainment of quota. 51.8% of companies pay based on the individual quota attainment for each rep. 28.5% of companies compensate based on margins maintained.
I strongly disagree. Quota attainment, sales, and margins aren’t the only metrics that should be used for compensating sales managers. Certainly, they are the most obvious. Conversely, I submit there are other, far less obvious metrics that have a greater impact on sales production.
As the report references, there is a well-known sales adage. This belief states an organization elicits the performance it rewards. There is a better way to view this. Managers and organizations must elicit the behavior it rewards.
So what do sales managers manage?
Well, it certainly isn’t sales. Sales are not managed. Sales are the output of a process. Output can’t be managed. Quota attainment, sales, and margins can’t be managed.
In truth, companies want improved sales results. However, their salespeople and sales managers continue to do the same things in the same ways they’ve always done. If they do, the results won’t change. Greater results happen by changing the behaviors of the people responsible for producing them. Moreover, this leads me to another interesting survey finding.
Get this. Of the companies surveyed, only 9.6% compensated managers based on sales team training adoption. Only 8.5% of organizations reward managers for proactively assisting their staff.
Calculate sales manager salary thoughtfully:
The majority of organizations surveyed compensate managers for numbers and output. These things cannot be managed! Only a handful of forward-thinking organizations configure sales manager salaries with the goal of improving sellers’ behavior.
More options exist for compensation than sales process adoption and proactive coaching. There is so much more to consider. Only two behavioral performance metrics fail to properly judge a manager’s performance. I suggest organizations think differently about sales management compensation. There is no time to waste. In fact, revenue is on the line.
Switch gears, folks. Don’t wait. In fact, the time is now. Think about changing the behaviors that produce results. Stop compensating on sales and margins alone. Consider what actions and behaviors your managers and their teams require to achieve greater production. Build a well-rounded sales management compensation program that incents people for ideal management.
AXIOM Sales Kinetics is here to help:
AXIOM Sales Kinetics is one of the world’s leading sales training programs. Firstly, we strive to improve seller performance. Secondly, we offer world-class Salesforce integration. Thirdly, our team of sales experts knows how to drive both client and customer engagement. Thirdly, our founder, Bob Nicols, has over 30 years of top-tier sales experience. So, call us today. Revenue is our middle name.