Plan Mechanics.

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Presentation transcript:

Plan Mechanics

Tale of Two Reps

Plan rewards unprofitable sales GP Commission Plan Plan rewards unprofitable sales

NBC Commission Plan

(Operating Profit) + (Sales Comp Total) Sales Comp Rates Most companies pay an effective rate of 50% to 60% of NBC. (total pay) Self-check: (Sales Comp Total) (Operating Profit) + (Sales Comp Total)

NBC Commission Plan may have a monthly base salary component new reps / territories geographic differential may have a guarantee new reps new territories new business segment pays a fixed percentage based on rep’s NBC negative commissions are allowed

NBC Commission Plan (cont’d) should have a transition mechanism decrementing guarantee should be flexible to allow for unforeseen circumstances may incorporate territory realignment