Sales Rewards for `Real' Revenues

Compensating sales reps based on sales to consumers instead of distributors.

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"When we were a tiny, struggling company, we needed an honest measure of sales, not one based on false projections," says Gordon Eubanks, CEO of Symantec, a Cupertino, Calif., software-database company.

So from day one, Symantec paid sales reps not for what they sold to distributors but for what reached consumers -- "sell-through" rather than "sell-in." On the surface, Symantec's plan resembles many other companies' compensation schemes: the 60 salespeople receive a commission, equal to about half their salary, based on meeting a volume-based quota.

What's different, and difficult, about setting up a sell-through compensation plan, though, is getting distributors to share valuable customer data. Symantec asks its distributors to report each month how many Symantec products they delivered to retailers and to corporate accounts. (Symantec allayed distributors' fears by asking for sales data by zip code, not by name.) Because retailers usually order just "one to sell and one to shelve," products that reach them count as sell-through.

Since their pay rides on the retailers' success, Symantec's sales reps are quick to help stores solve problems. Perhaps most crucial, reps feel no pressure to push excess inventory on distributors to make quota. That gives Eubanks sales figures he can trust. -- Michael P. Cronin

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