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    Compensation: Driving the Right Sales Behaviors

    I am often asked how we are able to attract and keep such great talent at Marco. Certainly, it takes a good culture. But, in a sales driven organization like ours, an effective compensation strategy is a critical component to success and growth.

    I started my career as a salesman so I have a pretty good understanding of what motivates individuals to perform and achieve industry-leading results. I also have developed numerous compensation plans over the years and found that some had more staying-power and were more effective than others.

    When it comes to sales comp, the carrot or the stick debate often ensues. While sales compensation is traditionally driven by the carrot (if you do this, you get that), I’ve also experienced that sometimes you need the stick (holding back a percentage of compensation until specific goals are met).  Here are some key elements I have used to develop effective comp plans:

    1. Top Income Potential
    At Marco, our sales comp plans are designed to pay in the top quartile of our industry. If you’re willing to pay more, you should expect more. The strategy is to provide some of the best sales positions in our markets and to attract and retain top talent. I believe this has been a significant contributor to our high-performing financial results.

     2. Increase Strategic Solution Sales
    Comp plans will be more productive – and profitable – for the company when the sales goals are aligned with the company’s goals. This may involve paying a premium for strategic activities or holding back a portion of compensation until a certain goal has been achieved. An example of this at Marco is that our salespeople are paid a premium for new business development in specific areas.

    3. Reward Systems
    A significant part of our reward system at Marco is our annual sales quota trip. For the past 20 years, we have organized a trip for the reps who achieved their quotas to attend with a guest. The quota trip has become such an important part of our sales culture, that for many reps (and their guests), missing it is not an option.

     Before any individual can earn the quota trip, we must attain our company profit goal.  As an employee-owned company, we want to make sure we’re not celebrating individual performance without first achieving our overall company results. This month, we will be taking about 80 people to Jamaica for a trip that never disappoints. We make a significant investment of time and dollars in our quota trips, but I believe it’s proven its worth.

    4. Team Player Incentives
    Often times specialists may be required to win complex sales. Obviously this can increase the cost of the sales process.  What we’ve done at Marco to encourage team selling is to incentivize  both the specialist and the account rep to fairly recognize their combined efforts for winning the sale. In most cases, this means Marco is paying a premium to promote collaboration and to improve our odds of winning. We’re well aware that there is no prize for second place, so increased compensation for team selling makes sense to us.

    5. Be Open to Dynamic Compensation Plans
    I recommend you review your commission plans at least annually and  be OK with changing them if necessary. Sometimes organizational strategies change mid-year.  Don’t be afraid to realign your compensation plan with the new goals.

    Another driver to promoting the right sales behaviors is keeping score.  Our sales reps know they live in a “glass house.”  Each week, our sales team receives an e-update with stacked rankings of their performance. In addition, each month those rankings are publicized company-wide.

    Our scorecard for effective sales compensation plans can be measured by our performance related to the growth of  our strategic initiatives. For example, last year Managed Services revenue grew 45% from $6.1 million to $8.9 million. Production Print was another successful initiative last year growing over 50%. This was very intentional and yielded the results we were looking for in these important strategic growth areas.

    Sales compensation is such a significant component in the growth equation that if you haven’t dusted off your plans for a while, I suggest you do so. It is well worth the time spent evaluating their effectiveness and how it can relate to your business goals.  

    Topics: Leadership, Sales Behaviors