The Alexander Group surveyed 100+ sales organizations with at least 20 reps and published its 12th annual sales compensation trends in 2013 and 2014 report. It is a useful report with some interesting observations (see link to full report below):
- sales departments experienced 6% growth in revenues (vs. 8.4% expected)
- median increase in sales compensation was 5% in 2013 (vs. 3% expected)
- most companies felt their sales compensation programs were effective, aligned with company objectives and well understood by sales personnel
- staff turnover was 10%
- 55% percent of companies intend to increase staff
- median quota performance was 95% with 49% reaching quota (companies indicated a preference for having the average quota exceed 100% of objective with 60% – 70% of reps at or above quota)
- 13% was the median cost of the sales function
- 70+% of companies expect to increase base pay with a median increase of 3%
- more than 90% of firms will make adjustments to their sales compensation plans with about 10-15% making major changes
- most plans will be based around revenue performance relative to quota with 3 or fewer other compensation measures
- most common ratio of base and commission at target will be 60/40
- MBO incentives are atypical
- a minority of companies will have a pay cap
- 60% of companies will not over-assign quotas
- 2/3’s of companies use either a top-down and bottom-up approach to setting quotas with the former being more typical in companies where there are a greater number of accounts
Generally positive and consistent with stable marginal growth Peak has seen across the market in recent years.
Click here to read the full study: 2014 Sales Compensation Trends Survey©.
Eliot received his B. Comm. from Carleton University and has been honored as a Top 40 Under 40 Award winner.
He co-authored Sales Recruiting 2.0, How to Find Top Performing Sales People, Fast and provides regular insights on sales team management and hiring on the Peak Sales Recruiting Blog.
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