Compensating the Sales
Force by David J. Cichelli

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Read sales compensation questions—and responses—submitted to The Alexander Group.



Questions and Answers

You begin your book, “Compensating the Sales Force,” with an affirmation that “sales compensation works.” What are your thoughts on the pros and cons—the rewards and benefits versus the risks? If it is true that pay for performance works, why aren’t all companies adopting such a system?

What are in your opinion the biggest problems and challenges in sales compensation management? Is there a key to success?
How do you feel about using spiff bonuses? How many spiffs are too many? Is it possible to avoid encouraging an unwanted behavior of employees pushing spiffs at the expense of the customers?
Territory segmentation seems to be a very common question. I often see territories divided by geography, industries and products, as well as account size. The best territory segmentation strategy surely depends on individual circumstances, but what are your thoughts on different scenarios when a particular segmentation should be used?
Many companies often wonder what the Return on Investment (ROI) of incentive compensation system is. Most articles and research on the Internet are either sponsored or written by vendors and it is hard in most cases to truly measure the savings and improved performance as a result of that new system. In your experience, what could be the return expectations of well-designed plans?

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