The reps weren’t the only ones obsessed with the compensation system. The company liked to play around with the system’s components to try to find better ways to motivate reps and boost revenue, or to increase the return on the money it spent paying salespeople—a large part of its marketing budget. This company’s sales comp system was fairly basic: Reps earned a salary and a commission of around 1% of sales. The company worried that the system was too focused on outcomes and might over- or under-reward reps for factors outside their control. So it began basing compensation on their effort and behavior, not just on top-line sales. For instance, under the new system, a portion of compensation was based on customer satisfaction surveys, the number of prospective accounts visited (even if they didn’t buy), and the retention of existing accounts.
Largely because of this consulting assignment, I became so curious about the best ways to compensate salespeople that I began reading academic articles on the subject. Eventually I pursued a PhD in marketing at Yale, where I studied the theory and practice of how companies can and should manage and pay salespeople—research I now continue at Harvard Business School.