Hanging on to
Good Sales Reps
(June 2001)
Quote by Mitchell Roye

According to Mitchell Roye, managing director for The Cambridge Group in Newport Beach, Calif., there is no definitive model for handling compensation issues in an integrated supply environment. In many such arrangements, he says, the sales rep is but one of several people responsible for creating and managing the deal on an ongoing basis.

"This must be factored in to how much a rep should make," says Roye, adding that in many integrated supply contracts the focus is not to simply push more product onto the customer at higher prices, a factor that leaves the rep on the full-commission plan at odds with the nature of the selling model.

As for the Internet, all of the hype about disintermediation has yet to come to fruition. At this point, Roye says many distributors are still trying ot understand the Internet and how it will impact their business and their salespeople, along with how to compensate them in the digital environment. He calls the Internet an "evolving topic" for distributors, and says it will continue to get more attention as the medium becomes more pervasive in everyday business applications and processes.

When designing compensation plans for the digital age, Roye advises distributors to first differentiate whether the Internet is performing as a stand-along sales channel - with little or to no sales rep involvement - or if it's performing as a tool the sales rep uses to facilitate an electronic relationship with a client.

"This also has a significant impact on a sales compensation plan," says Roye. "Many companies view those that sell and close deals very differently from those that service deals others have sold. To this end, the compenstation plan structure and payout levels will be measurable different, depending on the situation."