{"id":1623,"date":"2012-05-09T10:03:49","date_gmt":"2012-05-09T05:03:49","guid":{"rendered":"https:\/\/www.peaksalesrecruiting.comblog\/does-sales-compensation-plans-drop-when-markets-drop\/"},"modified":"2014-05-04T19:44:08","modified_gmt":"2014-05-04T19:44:08","slug":"the-markets-are-dropping-is-sales-compensation-dropping-as-well","status":"publish","type":"post","link":"https:\/\/www.peaksalesrecruiting.com\/blog\/the-markets-are-dropping-is-sales-compensation-dropping-as-well\/","title":{"rendered":"The Markets are Dropping.\u00a0 Is Sales Compensation Dropping as Well?"},"content":{"rendered":"

We get a lot of questions about whether sales compensation is sagging in light of the economy. The simple answer is no, sales compensation is not dropping\u2026for the reliable performers.\"\"<\/p>\n

The detail behind the answer involves looking at supply and demand. The model of supply and demand is the backbone of price determination in a free market. Demand refers to the amount of product or service that is desired from buyers. Supply represents the amount of products or services provided.\u00a0 The ensuing philosophy dictates that price is a reflection of supply and demand.\u00a0\u00a0 With high unemployment creating a large amount of candidates and low supply of jobs, it would make sense to believe that the price (salary) would be reduced as well.<\/p>\n

In the world of retail the example might look like this.\u00a0\u00a0 Your favorite band is having a special concert.\u00a0 Because there is a surplus of concerts, the supply and demand market has determined the acceptable ticket price among buyers is forty dollars.\u00a0 So you plan on paying forty dollars.<\/p>\n

In the job market overall, the same theory looks like this.\u00a0 With employers hurting financially and receiving hundreds of applicants for a single open position, hiring managers can offer lower salaries for available jobs.\u00a0\u00a0 You believe you can offer a lower salary too.\u00a0 It\u2019s a buyer\u2019s market for talent, right?\u00a0 Let\u2019s take a closer look.<\/p>\n

You go to buy a forty-dollar ticket to the concert and you can\u2019t find one.\u00a0 While forty is the standard price for most shows, this is an exclusive performance with limited seats, so these tickets are one hundred fifty dollars.\u00a0 With only a limited supply available, and demand high, the longer you wait for tickets the more expensive they will get, if you can get one at all.\u00a0 Demand has increased for the tickets and so has the price.\u00a0 Your choice is to pay less for a lesser show, or pay more and invest in the top performance you desire.<\/p>\n

Hiring the best sales talent is like buying a ticket for the concert. Overall, there are plenty of salespeople to employ, just like there are many concert tickets available to purchase.\u00a0 However, you don\u2019t want \u201cany ticket\u201d or \u201cany salesperson,\u201d you want the special one, the best.<\/p>\n

Twenty percent of all salespeople make eighty percent of all sales. Want cheap?\u00a0 Bargain hunt low performers, and get yourself a down-market deal. Want gold? Dig for the top twenty percent and pay what it takes.<\/p>\n

Don\u2019t be fooled by the economy.\u00a0 The market may be dropping, but the desire to hire talented sales performers is increasing.\u00a0\u00a0 Demand is high and supply is low. If you think you can offer a drop in salary, be prepared for a drop in sales.<\/p>\n

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