Sales Compensation Levels
If you' re considering hiring experienced personnel from other business segments, beware! Compensation increases as the margin for a product or service increases. When the cost of production is a small percentage of the selling price, variable compensation can be very high. Likewise, earnings can be great when the product/service being sold is "discretionary" or infrequently purchased. The chart below summarizes salesperson effectiveness ratings collected from 23,000 business decision-makers.
The effectiveness of the salesperson is not particularly related to the compensation level or "prestige" of the industry. Salespeople selling commodities like paper are rated higher than those selling software, even though those selling software typically receive higher compensation. This differential proves to be frustrating to companies that are hiring salespeople from a "glamorous" former position on the assumption that their previous compensation was a sure predictor of competence. The result is usually an expensive mis-hire. We can help you avoid a costly hiring mistake.
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How Customers Rank Selling Effectiveness in Different Industry Segments
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Rank
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Industry
|
Average Rating
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|
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1
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Paper Distribution |
89.50
|
|
|
2
|
Document Management |
88.65
|
|
|
3
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M.R.O. Distribution |
88.47
|
|
|
4
|
O.E.M. Auto Parts |
88.36
|
|
|
5
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Office Supplies & Products |
88.27
|
|
|
6
|
Chemicals |
87.97
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Key to Ratings
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|
7
|
Rubber |
87.87
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100 = Excellent |
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8
|
Primary Metals |
87.74
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90 = Very Good |
|
9
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Electronics |
87.70
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80 = Good |
|
10
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Office Productivity |
86.67
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70 = Average |
|
11
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Aftermarket Auto Parts |
86.52
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60 = Poor |
|
12
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Health Care |
86.10
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|
|
13
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Pharmaceuticals |
85.99
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|
|
14
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Computers & Software |
85.80
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|
|
15
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Delivery/Freight |
85.51
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|
|
16
|
Telecommunications |
82.54
|
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The article, originally published in Selling Power magazine, is available at www.chally.com/98bm_sum.htm
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