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Key Indicators for Changing a Sales Compensation Plan

The case study question was:

Assume you take over a company and look to change the sales compensation plan. What are some key indicators you will need to review and implement for success of your new plan?

Key indicators, such as sales volume and type of sales (recurring business or new accounts) are key indicators to monitor before changing a compensation plan. Other indicators are market conditions, such as competition in the area.

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Solution Preview

Thorough review and analysis will need to be conducted on the composition of sales for each of the company's associates whose primary job functions are in this arena. If the majority of sales occur with established customers, on a fairly routine basis, this reflects that the sales associates are likely performing more in a customer service role - ensuring that current customers continue to purchase ...

Solution Summary

This solution is over 250 words and provides several questions which should be answered before changing a compensation plan for sales-based personnel. The questions will help to define key indicators on whether a change will be successful. The solution also explains possible changes, such as "flat pay" or commission.