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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):

2013

  • 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

2014

  • 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.

sales compensation 2014

 

Click here to read the full study: 2014 Sales Compensation Trends Survey©.

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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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