Sales compensation plans — One size does not fit all

Abstract

This paper considers the state of variable pay compensation plans for sales people in business-to-business markets and, in particular, reviews proposed methods for rewarding key account managers. The authors suggest that, rather than have one instrument to determine rewards for all professionals involved in selling, the reward mechanism should be determined by the type of prospect or customer and the level of skill involved. The authors argue that only companies that have a portfolio approach to sales pay, with pay reflecting the type of customer and the skills required to manage the relationship, will achieve appropriate motivation and productivity.