ABSTRACT
This chapter provides a framework that helps to decide between centralization and decentralization of pricing authority and between bonus and commission payments. In addition, the chapter expresses that the high-performing and low-performing sales representatives need to be compensated differently. Sales force compensation and price delegation are two sides of the same coin. The chapter offers straightforward and actionable ways to improve these areas, relevant for managers in charge of the sales force, sales managers, and those involved in the sales process. Centralized pricing seems to contradict the spirit of simplification for which pricing delegation was created in the first place, since it was designed to create flexibility in individual negotiations. In spite of this, the manager in charge of sales force compensation can make an educated guess and increase commissions if the company needs fresh business, or increase bonuses if the accounts show the potential for growing sales.
