Financial compensation is an important motivating factor for automotive industry salespeople, as it has a direct influence on their performance. So, where should the line be drawn between fixed and commission-based wages?
Several variables need to be weighed before finding the right formula. Studying the various formulas used by competitors in the local market is a good starting point. The next step consists of finding the right balance between a reasonable base salary and commission structure that will motivate salespeople to reach, and even surpass their sales objectives.
The challenge is to set the base salary at a level that leaves room for a progressive commission structure that will stimulate the desire to perform. This will motivate employees to adopt proactive sales habits and behaviour. This is a type of “profit-sharing” approach, as commissions will rise as sales increase. The formula requires monitoring to avoid overaggressive behavior that may be harmful to current and future customers.
In general, salespeople do not suffer from a lack of confidence. Success is important to them, as is the possibility of increasing their income. Their efforts need to be compensated with monetary incentives that are beneficial for them as well as the company.