Monday, June 02, 2008

Can you please share some of your "best sales compensation practices" for your typical Account Manager role?

Account Managers usually have responsibility for managing the relationship and growing the business with assigned existing accounts.

There are many possible compensation arrangements for Account Managers -- but here are some tips that may help guide the design process:

1. Account Manager roles are generally rewarded for growing their assigned accounts -- ideally growing account profitability if it can be measured.

2. Compared to the "hunter" job (what I think you're calling the Sales Department), they would generally have less pay at-risk (as a percent of total comp).

3. The Account Manager would be more likely to have a bonus type mechanic than a commission. (A bonus is an incentive that delivers a pre-established payout amount for hitting a pre-established goal, and less for under-performing, more for over-performing. A commission is communicated as a percent of productivity, like 3% of sales.)

And, as always, the measures and acceleration points in the comp plan should focus the Account Managers squarely on delivering the results most needed by the company -- which varies from one company to the next.

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