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Research Outline

Prepared for Diego R. | Delivered August 10, 2020

Best Practices for Sales Commission

Goals

To determine the best practices of sales commission that a Principal company pays to outside Sales Agents to sell educational materials to universities in the United States, Europe, and India, with a focus on engineering and architecural schools.

Early Findings

  • Elite sales professionals expect to be paid a respectable salary- 21% of employees feel they are paid fairly, while 56% of employees leave their current company due to inadequate compensation.
  •  Commission structures vary from company to company, rep to rep, industry to industry, and ties a sales rep’s performance to the amount of money he or she will make. The different types of commission structures include straight commission, revenue commission, gross margin, draw against commission, tiered commission, multiplier commission, best pay rate only, and base plus commission.
  •  Straight commission (sales incentive compensation) is complex, with incentives based on encouraging specific sales behaviors that help organizations achieve sales and revenue goals.
  • Organizations set four sales compensation best practices that will motivate reps and encourage them to achieve and exceed their quota: set the quota bar at the right place, make incentives worth the effort, unlimited cap on commission plans, and give the commission plan structure time to work and then revisit to see if sales targets are being reached.
  • There are no one-size-fits-all sales compensation strategy- different incentive plans are required for each sales role, and each plan should be tailored to the individual roles’ parts in the sales process.
  • For instance, in the U.S., the current average rates per industry are as follows: Wholesale and Manufacturing Sales Representatives- $61,660 , Insurance Sales Agents- $50,600 , Advertising Sales Agents- $51,740 , Real Estate Brokers and Sales Agents- $50,300 , Securities, Commodities, and Financial Services Sales Agents- $64,120, Door-to-Door Sales Workers, News and Street Vendors, and Related Workers- $26,430, and Sales and Related Workers, All Other- $33,220.
  • Educational Sales Representatives execute institutional sales and rental services, within an assigned market, by maintaining and developing a successful and profitable network. The average educational sales rep salary ranges between $43,000 and $85,000 (salary+bonus+commission).
  • The average base salary for education sales reps in Europe is $56,478 annually. The national average salary for an Education Sales is $71,750 in United States. The average salary for India is based on the RM Educational Solutions company in India highlighting the company pays for inside sales agents at $2.2LPA-2.9LPA.