This is the most common question asked by sales managers. It’s a self-created conundrum by introducing ‘you get paid if you do this and that’. Instead of ‘You earn good money for doing a good job.
By introducing performance pay schemes, sales managers create a game and commission agents optimize their playtime to achieve maximum outcome.
However, no matter how the rules are tweaked, it always ends up with exploitation of one side or the other.
Sales manager realize that “If they pay same commissions for repeat sales, they could end up paying money for doing nothing after a while. If they don’t pay for repeat sales, agents will try to attract customers who may not have long-term interest.”
At this point sales manager try to change the rules, add exceptions and introduce new bonuses.
Our advice! Tread this path carefully depending on your target market, customer segment (B2B or B2C) and long term objectives; there is no one size fits all.
Happy selling!