The Cost of Sales Compensation Problems

One of the greatest risks in poorly managing sales compensation plans is directly related to salespeople behavior and motivation. Learn how you can keep your sales reps happy and improve sales force and sales operations performance.

Good sales compensation plans should embody the strategy of your organization and help your sales force close bigger and better deals.

But sooner or later, plans drift off course and stop working their magic.

We analyzed over 100 large sales organizations to reveal the hidden costs of sales compensation problems.

From overpayments and errors, to misunderstood plans, and inconsistent processes — these issues cost companies hundreds of thousands of dollars every year.

Companies that mismanage sales compensation end up hiring more staff to handle the influx of disputes, inquiries, and changes…

IT needs to go the extra mile, as well:

  • correcting bugs in the sales compensation software
  • and ensuring it is synced and shares data with all required business systems.

Human mistake and technical glitches trigger another costly problem – overpayments and different kind of sales compensation errors.

According to Gartner, up to 8% of all sales compensation expenditures are commissions paid to reps by mistake.

Companies are struggling to keep their sales reps happy. The average turnover rate in sales organizations is 35%, an expensive problem since the average cost to replace a sales rep is almost $115,000.

Even reps who respond well to retention policy can easily become unproductive

Digging for data, updating records and documents manually, and emailing supervisors takes up half their time.

For most companies the greatest cost of poorly managed sales compensation plans is related to behaviour and motivation of salespeople.

Depending on the scale of operations, this lost selling time translates into lost revenue – hundreds of thousands to millions of dollars a year…

Closing your eyes won’t make these problems go away. On the contrary, they will only escalate, weaken your sales performance – and your bottom line.

Contact us to learn how we can help your company improve sales force and sales operations performance.

Privacy >