| Acknowledgments | xi |
| Preface | xiii |
| 1. | Why Sales Compensation? | 1 |
| The Role of the Sales Force | 1 |
| Why Sales Compensation Works | 2 |
| The Power of Sales Compensation | 3 |
| Job Content--The Source of Sales Compensation Design | 5 |
| Sales Jobs and Sales Process | 5 |
| Sales Compensation--Paying for the Point of Persuasion | 9 |
| Sales Force Obsolescence and Sales Compensation | 9 |
| The Impact of Customer Relationship Management | 11 |
| Summary | 11 |
| 2. | Sales Compensation Fundamentals | 13 |
| Variable Compensation Models | 13 |
| Income Producers versus Sales Representative | 16 |
| About Sales Compensation Concepts | 20 |
| Sales Compensation Design Elements for Sales Representatives | 20 |
| Eligibility | 21 |
| Target Total Cash Compensation | 22 |
| Pay Mix and Leverage | 23 |
| Performance Measures and Weights | 26 |
| Quota Distribution | 28 |
| Performance Range | 30 |
| Performance and Payment Periods | 32 |
| Summary | 34 |
| 3. | Who Own Sales Compensation? | 35 |
| Sales Compensation Program Ownership | 36 |
| Program Accountabilities | 36 |
| Assignment of Program Accountabilities--Large Sales Organizations | 38 |
| Using Committees | 40 |
| Sales Compensation--The Process Manager | 41 |
| Summary | 42 |
| 4. | Why Job Content Drives Sales Compensation Design | 43 |
| Job Content Drives Sales Compensation Design | 43 |
| Sales Job Components | 44 |
| Sales Job Type Inventory | 47 |
| Job Levels | 55 |
| Job Design Errors | 56 |
| Sales Compensation Practices by Job Types | 58 |
| Summary | 58 |
| 5. | Formula Types | 59 |
| Illustration Formula Payouts with Sales Compensation Formula Graphs | 59 |
| Two Major Seller Categories | 59 |
| Seller Category: Sales Representatives | 66 |
| Starting with a Target Incentive Amount | 67 |
| Calculation Engines: Commission versus Bonus | 68 |
| Sales Representative Sample Plans | 70 |
| About Link Designs | 80 |
| Providing Equal Earning Opportunities When Territories Are Dissimilar in Size | 86 |
| Bonus Formula | 89 |
| Bonus Linked Designs | 95 |
| Formulas for Sales Teams | 100 |
| Dedicated Sales Teams | 100 |
| Opportunity Sales Team | 102 |
| Using Base Salary Only | 103 |
| Summary | 104 |
| 6. | Formula Construction | 105 |
| Fundamentals of Sales Compensation Formulas | 105 |
| The Economics of Income Producers | 108 |
| Advanced Thinking about Income Producer Commission Rates | 110 |
| Constructing Sales Representative Formula | 113 |
| Formula Construction Worksheets | 118 |
| Summary | 131 |
| 7. | Support Programs: Territories, Quotas, and Crediting | 133 |
| Territory Configuration | 134 |
| Quota Management | 139 |
| Sales Crediting | 145 |
| Summary | 150 |
| 8. | Administration | 151 |
| Administration Components | 151 |
| How to Avoid Unnecessary Administrative Burdens | 159 |
| Summary | 160 |
| 9. | Implementation and Communication | 161 |
| Implementation | 161 |
| Communication | 164 |
| Summary | 170 |
| 10. | Program Assessment | 173 |
| Strategic Alignment | 173 |
| Employee Motivation | 176 |
| Best Practice Variance | 177 |
| Return on Investment | 178 |
| Program Management | 178 |
| Summary | 180 |
| 11. | Sales Compensation Design | 181 |
| The Sales Compensation Design Process | 181 |
| Ten Steps to Sales Compensation Design | 182 |
| Summary | 186 |
| Closing Notes | 187 |
| Appendix A | Illustrative Sales Compensation Plan | 189 |
| Introduction | 189 |
| Section 1 | Plan Overview | 190 |
| Section 2 | 20xx Sales Compensation Plan Components | 191 |
| Section 3 | 20xx Sales Compensation Plan Policies and Definitions | 192 |
| Appendix | 20xx Sales Compensation Plan and Calculation Examples | 195 |
| Appendix B | Sales Compensation Surveys | 205 |
| Appendix C | Software Vendors--Sales Compensation Administration Software | 207 |
| Index | 209 |
