Wondering how to calculate commission in Excel?
According to Google search data, hundreds of people enter this query every month. And since we know quite a bit about sales compensation/commission planning and design, we wanted to lend our advice to the list of resources you can find on this topic. Here goes…
How to Calculate Commission in Excel:
Step 1. DON’T.
Step 2. Explain to anyone who suggests it why Excel is a terrible solution.
In 2012, HBR heralded “the end of B2B solution sales.” In 2013, Forbes bit into the topic of sales force strategy for one of the world’s largest B2C brands. And today everything is on the table—as companies of all stripes look to succeed via sales strategy changes.
If you’re in the process of considering or planning a new sales force strategy, the following tips are for you…
The right way to structure a sales commission plan? It’s a question without easier answers. Business leaders have wrestled with the issue for centuries, as is evidenced by this New York Times article from 1914, How Should a Salesman Be Paid?
With Q1 sales behind us, it’s time to evaluate where you are against your annual goals. Is your sales force on target?
Ideally (if you’re on a calendar-year fiscal cycle), you should be tracking at 25 percent of your annual goal right now, or at 100 percent of your year-to-date goal.
Most companies aren’t quite there.
Have you seen the recent infographic from Cirrus Insight on how sales reps spend their time? While it’s scary to think more than one-fourth of the average rep’s day is consumed by email, we believe there’s an even scarier time expenditure missing from this visual…
Time spent calculating commissions.
Imagine, it is the beginning of your new year. Your sales compensation analyst is spending their time translating your new sales commission plans into formulas in their commission worksheets. Hopefully there is nothing lost in the translation as to what was in your head when you designed the sales compensation plans, how you expected them to work and what is being entered into the commission worksheet. Your sales reps will need to be paid their commissions soon and they will let you know if they were underpaid!
We work with many business owners and CEOs on their sales compensation plans, thus we hear a lot of the same stories from them. Here are the top 3 critical mistakes that they are making with their sales compensation plans:
1) Not viewing Sales Compensation as a strategic tool to drive revenue
2) Believing that their Sales Reps think and act like they do
3) Copying and pasting last year’s plan because “it works”
This is a common complaint I hear from CEO’s. At some point during the year they finally realize just how much they are paying their bottom performers and just how little sales these reps are closing. This mismatch in pay for performance is related to two underlying problems in the sales compensation plan structure.
To understand this problem better, first you must define what underperformance means to you. Is it 50% of quota, 60% of quota, 75% of quota.