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Apr 09, 2022
In Unravel Ideas & Questions
We use the same principles we do for sales people. First, the commission program must be cost neutral to current spending-at plan. That is, what I'm spending for marketing people today, would be the same I would spend for them under a commission plan-at plan. (That's the way we design compensation program for sales people, let's do the same with marketing.). Presumably, we would take the current "budget" for marketing people and reallocate it, some level of fixed base pay and some level of variable-commission email list based pay. If marketing achieved their goals, they would earn the full amount-base plus the commission. If they failed to achieve their goals, they would receive base plus whatever commission they earned. If they overachieved, they would earn more-perhaps with accelerators. All of this is just like sales, except it would be funded out of the marketing budget, not sales. Now some of you might have pulled out your calculators and may be scratching your heads. "But Dave, what you are saying is we have to take a salary cut. This is just unacceptable, why should we do this? We want the upside of commission, why don't you just put that on top of our current salaries?"
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