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SPECIAL REPORT VARIABLE DATA PRINTING -- Compensating Digital

October 2005
New equipment and processes can present a real challenge for employers because of the capital investment, training and installation they require. However, there are two other challenges that are often overlooked—revising your company's strategic plan and motivating employees to help maximize production and profit.

For printers that are getting into the digital/variable data arena, these two challenges are especially important. This article will address motivating employees to achieve specific goals through compensation plans.

First let's take a look at sales compensation plans. Sales commission and incentive plans have always been a challenge for the typical printer. And digital printers are no different. If your company has ventured into the digital arena from being a traditional litho shop, many of your salespeople may not be comfortable with or motivated for digital sales because the sales time is often longer and a single job is usually much smaller in price. "They're selling a service. . ." is usually how digital print shop owners describe print sales, "not a single job."

If your shop is 100 percent digital, the issues tend to be more traditional, such as consistent quota attainment and selling at (or above) target price in cases where competition is stiff. Below are a couple of methods both digital and traditional print shops have used successfully in their sales compensation plans.

To grow a business, obtaining new customers is critical. But what is the difference between a "new" client and an "existing" client? Do you pay a different commission rate for new business as opposed to old business?

Typically, the difference between commission rates for new and old business is about 2 percent.

It's an owner's dream come true—a sales force that hits quota each and every month in the fiscal year. Here are some ideas to consider:

1. Hitting monthly quotas requires extensive research and planning. The sales manager needs to work with each salesperson on his/her pipeline to ensure a steady stream of quality leads, month after month. A certain amount of time each month should be devoted to this task.

2. One type of sales compensation that encourages consistent quota attainment is the step method of increasing commission rates during the month. For example, if sales for Sally are below quota for the month, commissions are 6 percent, but if sales reach and exceed quota, then commissions from that point on are 7 percent. The key is to correlate the quota with the ideal commission rate.
 

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