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How is the economic uncertainty affecting pay mix?
Start by thinking about sales prominence. Has it changed? Do the sales people have more control over their own success, or less?
How should sales people be rewarded for sales quality?
As businesses grow, mature, and become more complex, the quality of the revenue increases in importance. This often comes up when the sales team has hit their assigned sales numbers, but the company is disappointed with the nature of those sales.
How do we design the right plan for an unpredictable year?
So many sales compensation plans depend on goals or quotas. Regardless of the type of plan you have, some kind of productivity expectation is embedded in your plans. So in a year when “expected performance” is very difficult to establish accurately, how can you manage your plans with this in mind?
How should we construct a referral incentive for “friends of the company” who help us find business?
Referrals are vital to many businesses. Setting up a referral incentive can be a great way to reward those who help create real value for the company. The keys to a value-creating referral incentive are…
What is the ideal quota attainment distribution?
This is a topic on which sales leaders and finance people have strong opinions. While I’ll discuss some of the nuances around the topic below, my bottom line is that most people should achieve or exceed quota.
Payment timing for multi-year deals
Our sales people sell long-term deals, most of which span several years. When should they be paid for these – upon signing, as invoiced, when revenue is recognized, at completion, or a combination of these?
Should a transportation/logistics broker be on 100% commission?
The term commission is often misused and burdened with connotations. Some of our clients will not consider paying brokers any other way than by using a commission, while others have started a design discussion saying, “We are not a commission organization and we will never be a commission organization!”
Paying for long-term contracts
If the sales person is expected to “account-manage” the account and ensure satisfaction throughout delivery (perhaps while also looking for opportunities to expand the business in the account), then payment over the life of the contract would be appropriate…
What is the difference between a commission and a bonus?
The difference is that the “commission” is communicated as a “piece of the action” (e.g., 2% of revenue, $5 per unit, 6% of margin dollars); whereas a “bonus” is a fixed incentive amount offered for achieving a specific objective, often with less offered for lower achievement levels and more for higher levels.
Commission payments following termination
What do we do when a sales person leaves the company before the last payment is made for a contract closed by the sales person? Do we still pay after termination?