2013 Sales Compensation TrendsBy: David Cichelli Sales Compensation, Sales Leadership, Sales Strategy
What do companies plan for their 2013 sales compensation programs? How much will incentive budgets increase? Will base pay increases be provided to sales personnel? Will headcount grow? What will happen to sales expense budgets? To learn the answers to these questions, be sure to participate in The Alexander Group’s “2013 Sales Compensation Trends Survey.” (See criteria below for participation.) Now in its 11th year, this is the go-to survey for 2013 sales compensation planning answers.
What Are the Recurring Trends in Sales Compensation?
Every year, more than 90% of the participating companies make changes to their sales compensation plans. Although most changes are minor, between 12% and 15% of the surveyed companies perform a full revamp of their incentive plans for sales personnel. With over 10 years of data, the “Sales Compensation Trends Survey” provides some interesting insights.
Over the years, the change in incentive payouts has followed general economic market trends.
Managing incentive budgets is not an exact science, with companies varying their ability to anticipate payouts against budget expectations.
Program effectiveness also demonstrates a continuing challenge with some plans working effectively and others needing improvements.
These trends suggest that sales compensation programs need continuing attention and oversight.
Why Do Sales Compensation Plans Change?
Interestingly, pay programs for income producers, such as real estate, manufacturing agents, traders, life insurance sales and sellers of financial investments seldom see their pay programs change. However, sales representatives—those representing a company’s value proposition—often see their pay programs change on an annual basis. Why?
Sales representatives are not representing themselves (as income producers do); instead, they are representing a company’s products and solutions to existing and potential buyers. More than 90% of all companies with sales representatives change their sales compensation plan on an annual basis. As the company’s objectives change and as buyers’ behaviors change, the role of the sales person changes, too. Sales compensation is an “alignment tool” and therefore changes when the objectives and expectations of the job change. The most common change on an annual basis to incentive plans for sales representatives are the performance measures as confirmed by the Sales Compensation Trends Survey.
What Are the Expectations for 2013?
Last year confirmed the return of base pay increases for sales personnel; on average, about 3.4%. Meanwhile, total earnings were expected to grow almost 5% featuring an uptick in incentive payments. These projections were recorded at the start of 2012.
We are looking forward to seeing how much incentive budgets are expected to increase in 2013. With survey data collected in December 2012 and results reported in early January 2013, we will find out soon!
As suggested by former survey participants, the 2013 survey will feature additional questions on quota performance and the use of long-term incentives.
How to Participate in the 2013 Sales Compensation Trends Survey
There is no fee to participate in the survey. By participating, you will receive a full copy of the survey results the second week of January. Participate now in Alexander Group’s 2013 Sales Compensation Trends Survey. The survey is open until December 21, 2012.
Please note that survey participation criteria include the following:
- You have at least 20 full-time sales representatives.
- You agree to answer all questions.
- You do not sell services or products to sales and marketing entities.
- You will provide your contact information and your e-mail address has a corporate extension