2012 Sales Compensation Trends Survey Results

-Executive Summary-

January 6, 2012

Survey Editor: David J. Cichelli Senior Vice President The Alexander Group 480.315.5828 dcichelli@alexandergroup.com
2012 The Alexander Group, Inc.

2012 The Alexander Group, Inc.

Table of Contents
Executive Summary ...................................................................................................................................... 2 The following pages are available to participants only: Survey Highlights .......................................................................................................................................... 7 Survey Trends ............................................................................................................................................... 9 Survey Findings Overview .......................................................................................................................... 13 Full Survey Results ..................................................................................................................................... 19 2011 Sales Outcomes and 2012 Sales Prospects ..................................................................................... 20 Sales Force Headcount Changes ............................................................................................................... 21 Sales Department Goals and Costs ............................................................................................................ 24 2011 Sales Compensation Program Outcomes ......................................................................................... 26 2012 Sales Compensation Program Practices ........................................................................................... 30 Key Sales JobSales Compensation Practices ........................................................................................ 34 Pay Practices by Country: Pay Mix and Teaming ....................................................................................... 40 Demographics ............................................................................................................................................. 43

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2012 Sales Compensation Trends Survey

Executive Summary Overall Observations
While not as robust as projected at the end of 2010, 2011 was a positive year for sales departments and their sales personnel. Revenue performance was 6%; two percentage points below the previous 8% projection expected for 2011. Overall, sales departments are moderately cautious about sales growth performance in 2012, expecting a 7.5% increase in sales results in 2012. And, sales department expense budgets will increase 5% in 2012. Sales personnel saw their incentive checks increase by 5%, exceeding the budget of 3% set at the beginning of the year. Editors Note: Responses to survey questions often exhibit a wide range of responses. Sales management should exercise judgment when interpreting and applying median and average survey responses.

Introduction
119 sales departments participated in this years 10 annual 2012 Sales Compensation Trends Survey . Participants provided data in December 2011 on what occurred in 2011 and what they think will happen in 2012. This survey represents practices affecting approximately 120,000 sales personnel.
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2011 Actual Outcomes

6% is the median sales increase in 2011 as compared to 2010. 53.04% increased sales staffing levels in 2011. 11% was the median 2011 turnover rate. 6.5% was the voluntary turnover in 2011. 4% was the involuntary turnover in 2011. 63.56% found their sales compensation programs effective. 57.63% made no changes to their sales compensation plans mid-year. 70.43% confirmed that the 2011 sales compensation program was aligned with the companys objectives. 81.20% reported that most to all incumbents understood their sales compensation plans. 78.26% said 2011 payouts either fully or mostly matched performance. 37.4% of the reporting companies paid above their incentive budget in 2011. 5% was the median incentive payout increase from 2010 to 2011. 90% median was the average quota performance in 2011 for all sales personnel in the primary sales job. 44.04% made no changes to quotas in 2011. 88% is the average portion of target incentive tied to individual performance.

2012 Projected Practices

7.5% is the expected median sales revenue increase for 2012. 10% is the median projected turnover rate for 2012. 5% is the median 2012 projected increase in sales department spending. 90.52% of the reporting companies listed sales results as the primary focus for 2012. 3% is the median increase in sales compensation costs for 2012. 74.79% plan to provide a base pay increase in 2012. 3% is the median planned base pay increase in 2012. 96.61% plan to make sales compensation program changes for 2012. 52.14% listed correct goal setting as the top sales compensation challenge for 2012. 3% is the median plan increase in total compensation for 2012 for the primary sales job. 47.86% listed performance measures as the most common plan change for 2012.

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KEY METRICS

2012 Median Revenue Expectations (Average Projected Revenue Growth: 11.1%)

10th Perc 0 25th Perc 4 50th Perc 7.5% 75th Perc 12.5 90th Perc 20

2012 Increase in Median Total Earnings for Primary Sales Job (Average 2012 Sales Compensation Program Costs: 4.8%)
10th Perc 0 25th Perc 0 50th Perc 3% 75th Perc 5.25 90th Perc 14

2012 Median Base Pay Increases (74.79% Plan to Grant Base Pay Increases Averaging 3.4%)

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50th Perc 3%

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Five-Year Trends
(Select Questions)

Comparison of 2008, 2009, 2010, 2011 and 2012 Sales Compensation Trends Survey Responses

2008 Survey Actual Projected 2007 2008

2009 Survey 2008 2009

2010 Survey 2009 2010

2011 Survey 2010 2011

2012 Survey 2011 2012

Last Year's Actual Actual Median Compensation Payout Change as Compared to Previous Year 4.0% 8.0% Effective Acceptable Not Effective Above At Budget Below 55.80% 26.00% 18.20% 35.20% 27.80% 37.00% 2.5% 6.0% 57.61% 29.35% 13.04% 31.86% 25.82% 42.31% -5.0% -4.0% 56.49% 31.30% 12.21% 19.85% 21.43% 58.73% 5.0% 7.0% 58.33% 29.55% 12.12% 31.49% 28.35% 40.16% 5.0% 6.0% 63.56% 19.49% 16.94% 37.40% 26.96% 35.65% Actual Median Revenue Performance Compared to Previous Year Actual Sales Compensation Program Effectiveness (% of Companies)

Actual Sales Compensation Budget Payouts (% of Companies)

Next Year's Projected Projected Median Increase in Target Compensation for Primary Sales Job 4.0% 10.0% 3.0% 5.0% 2.0% 6.5% 3.0% 8.0% 3.0% 7.5% Projected Median Revenue Increase for Next Year

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Survey Questions and Report

The 10 annual 2012 Sales Compensation Trends Survey is an in-depth survey featuring more than 30 questions. About 120 data sets represent a cross section of sales functions covering more than 120,000 sales professionals. Participants receive a full copy of the 51-page survey results with supporting graphics. The Survey contains the following sections: Sales Department Outcomes and Prospects2 questions Sales Force Headcount Changes2 questions Turnover4 questions Sales Department Goals and Costs2 questions 2011 Sales Compensation Program Outcomes7 questions 2012 Sales Compensation Program Practices5 questions Key Sales JobSales Compensation Practices7 questions Pay Mix and Teaming2 questions Demographics7 questions
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Data Collection/Methodology
The 2012 Sales Compensation Trends Survey represents responses from 119 participants. Multiple sales departments from the same company participate. Participants must have at least 20 full-time sales personnel. Participants provided data during the first three weeks of December 2011. The Alexander Group gathered responses via a web-based survey. For numerical response questions, we trimmed the top three and bottom three responses before the percentile and average calculations. Results were published during the first week of January 2012. Would You Like to Participate in Future Surveys Like This One? Please send an email to dcichelli@alexandergroup.com to join our Sales Effectiveness Survey Panel. Put Survey Panel in the subject line and provide your (complete) business card information. To be accepted as a survey panelist, you must meet the following criteria: 1) you must have at least 20 customer contact sales representatives; 2) you have no commercial interest in marketing/selling products or services to sales departments; and 3) you agree to fully complete surveys submitted to you. Survey panelists receive a free copy of the survey results. Being a Sales Effectiveness Survey Panelist is voluntary and you can opt-out at any time. We keep all responses in strict confidence and are not used for solicitation purposes.

About the Sponsors

The Alexander Group, Inc. Preferred Consultants to Premier Sales Organizations

The Alexander Group provides sales management consulting services to the world's leading sales organizations, serving Global 2000 companies from across all industries. Founded in 1985, the Alexander Group combines deep experience, a proven methodology and data-driven insights to help sales leaders anticipate change, align their sales force with company goals and make better informed decisions with one goal in mind to grow sales. The Alexander Group has offices in Atlanta, Chicago, San Francisco, Scottsdale and Stamford. To learn more about Alexander Group's services visit www.alexandergroup.com or call 480.998.9644.

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WorldatWork WorldatWork (www.worldatwork.org) is a not-for-profit organization providing education, conference and research focused on global human resources issues including compensation, benefits, work-life and integrated total rewards to attract, motivate and retain a talented workforce. Founded in 1955, WorldatWork has nearly 30,000 members in more than 100 countries. Its affiliate organization, WorldatWork Society of Certified Professionals , is the certifying body for the prestigious Certified Sales Compensation Professional (CSCP) and other professional designations. WorldatWork has offices in Scottsdale, Arizona, and Washington, D.C. About the Editor David J. Cichelli is Senior Vice President of the Alexander Group. He is author of McGraw Hills nd Compensating the Sales Force, 2 Edition 2010, and is a frequent speaker on sales effectiveness issues. He is a sales compensation instructor for various associations. He is a regular contributing author to professional and trade publications. He also recently published The Sales Growth Imperative, from McGraw Hill in 2010. To learn more about Davids recent book on sales compensation, visit www.compensatingthesalesforce.com. To learn about the Alexander Groups sales compensation services, visit www.salescompsolutions.com.

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Sponsored By:
SpSp

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