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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?
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.
There is a lot of press now about curbing incentives. Do incentives actually work?
A well designed incentive usually requires (1) a performance standard (some say quota, others say productivity expectation or goal); and (2) a good tracking and reporting system (have to keep up with it if we’re going to pay on it).
Should base pay for sales people be the same for everyone in the role, or should there be a range?
Not managing base is a relatively common practice.. It’s not a best practice in my opinion, but it’s not unusual. There’s a philosophy that says, “Make your own raise – sell more.”
Should there be secondary objectives in a sales comp plan?
Do companies achieve secondary goals like introducing new products or improving the product mix or the average unit price through comp plans? Is it advisable to pursue more than the number one goal of rewarding sales?
Other ideas for sales measures other than hitting sales quota?
I’m looking for ideas in revamping our sales comp to include metrics and pay for items other than just meeting a traditional sales quota. Perhaps a bonus for a close rate of XYZ, for example. Any ideas are welcome!
Tips on putting together an incentive plan for inside sales
Any tips for putting together an incentive plan for “inside sales” employees? We are trying to get our employees into a “value-added selling” frame of mind (instead of price-point) and want to provide an incentive.
Where are the sales comp plan samples?
Many people would like to find a book of sales plan templates — but there’s not one I know of. That’s probably because it’s sort of like asking for someone to provide a copy of their house plans for your consideration…
Do sales incentives actually motivate people for the long run?
Regarding whether or not incentives actually help at all, the best piece I’ve read on the subject is Rewards and Intrinsic Motivation by Cameron and Pierce. The key points relevant to sales compensation design from the book are…