When you think about it, it’s true in just about any sale that the sales person must be part of a team that has:

• the right offering (services staff, right skills, right organizational capacity, …),
• the right delivery system (tools, processes, methodologies, management structure, …), and
• the right business model (pricing, contracting/terms, contractors vs. employees, …)

to create perceivable value for both the customer and the company. So why do the sales people earn variable pay while the others vital to closing the sale (and delivering the value) not earn variable pay?

The answer may be that some of the others do earn variable pay. But more often the answer is that the sales person’s own individual value creation is reliably measured in terms of sales closed (order value, margin value, hours booked, etc.) than that of others on the team, AND the sales person is interested in placing a meaningful portion of their at-market compensation at risk (20% to 50% is typical) in exchange for the opportunity to double or triple the amount risked if they are able to put together a banner year. That’s the basis for much of “sales compensation” as we see it today.

So, even if “it takes a village” to make the sale, the hunter who finds the opportunities, identifies the decision makers, puts together a strategy to win the business, and coordinates the internal team often has both risk and upside in their compensation plan tied to the results they manage to produce in order to encourage and reward their success.

Many of the other vital technical or industry expert contributors may also see the value they help create and express an interest in sharing in the upside – but they often are not interested in putting a meaningful amount of their compensation at risk.So while you may choose to offer spot awards and/or recognition to those non-sales associates who make a great contribution to closing an important deal, that’s not the same as pay at risk, a structured incentive plan, and exciting upside for the “stars.”

Another consideration is the level of aggressiveness you want in your fundraiser – the more risk and upside you put into a comp plan, the more urgent and aggressive your fundraiser is likely to be. For small-donation type fundraising where the number of calls dialed (or doorbells rung) makes all the difference, it can be an effective strategy.

Those pursuing more substantial donations (thousands of dollars and up) often find more success with having some of their largest donors involved in securing additional donations on a volunteer basis. People with large amounts of money to give usually ask some tough questions about exactly where their money is going – and would like to know that almost all of it will go to support the cause to which they intend to donate (vs. the fundraising effort).

1. Be clear on how much and for what measures the managers involved can “move the needle,” with a direct effect on the company’s financial results. Product Managers could be measured on product line gross margin or operating income, with a similar measure for Program Managers, for example. But make sure the measurement and reporting systems will support robust measurement of their results.
2. Be sure you have enough incentive to actually motivate and drive behavior towards the results you want. Anything less than about 15% of target cash compensation may not be worth the cost of designing, reporting and administering the plans (in terms of the effect on results). This can be tricky if you are offering incentives for the first time as you probably don’t want to reduce base to fund them. If you can redeploy budgeted money from a broad-based employee incentive plan to help fund it, you can bring the pay mix in line over time through reducing the increases in base and putting them towards the variable portion.
3. Be careful with target setting. You need to aim for about 60% of your employees on variable pay plans to be at or above target, or it won’t motivate much.
4. Offer enough upside. If you are putting people in an at-risk pay situation, possibly for the first time, you need to be sure a few people really ring the bell and get a handsome payout (1.5-2.0 times the target incentive), and publicize and celebrate these successes — it helps motivate everyone.
5. Be sure the people in the role have the risk profile to find this motivating (or that that is the sort of person you want in the role, and are willing to make the needed adjustments). Not all solid employees are “coin operated.”

The roles you ask about (account manager, business development manager, technical sales support specialists, and sales engineers) are more in the gray area in terms of eligibility for “sales-type” incentive plans. I would need to know more about the exact job descriptions before I could give an opinion about whether or not the role should be on a sales incentive plan or a corporate-wide plan based on overall company performance as Account Manager (which is a very common selling role title with best-practices all its own in terms of incentive design) may not mean to your company what it means in other companies.

That being said, here is some general guidance that may be of help. If performance in the role is objectively measureable on an individual basis and the result of that performance has significant business impact then you should seriously consider investing the time and expense in developing a customized incentive program. If you can’t objectively measure individual (or small team) performance and/or the performance impact has limited business impact, then you are better off leaving them on the corporate-wide plan. Developing sales-type incentive plans (often referred to as customized plans for non-selling roles), takes significant time and effort and can be complicated to track and administer. You have to be sure that the resulting change in behavior that you may get from the plan is worth the added administrative expense.

If your Account Managers are individually responsible to manage and grow a defined set of accounts, with objectives such as upselling, retention, penetration, and growth of those accounts then this role should be on a sales incentive plan (but the plan would look very different than plan for a sale reps plan who is out selling widgets every day, and might not use a commission structure at all, but instead use a goal-based bonus approach).

Business Development Managers could be low level lead generators, or could be out closing really large new business deals on their own. My hunch is that it is likely this role would be on a sales incentive plan, but the exact nature would depend on the accountabilities and expectations of the role.

Technical Sales Support Specialists (if this role is similar to what I’ve seen elsewhere) are often paid using a less variable pay mix (80/20 or 85/15) and are paid based on the results of the sales reps they support. This is also the case for Sales Engineers, although these roles often support the entire sales organization w/o being directly aligned to a team of reps, so their individual contribution becomes even less clear. For these two roles, the line starts to blur between corporate plan and sales plan, and often you end up with a hybrid. Part of their plan is like the corporate plan, but there may be a portion that is tied to the overall performance of the sales team as a whole or the sales region or team they support. There can also be a small individual performance modifier, but this often based on subjective manager evaluation.

1. Offer a meaningful reward, but not one that will encourage non-sales people to focus so much on this earnings opportunity that they neglect their key accountabilities. For example, if the eligible employee has total compensation without the lead bonus of $50k/year, then an award of $100 – $200 for a lead that turns into business would be about right (assuming their opportunity to hand off these leads would come up only a few times per year, and the deal value is such that the referral fee is affordable).
2. Start the program for a limited time – six months or a quarter for example. This gives people a sense of urgency to find some leads, and also gives you a chance to adjust if it isn’t having the results you want. You can always declare success and extend it.
3. Only pay the award for results that hit your income statement. If you pay for leads, you may get a lot of leads. If you pay for closed deals resulting from leads, your lead quality will be better.
4. Watch for any pattern that would indicate that suddenly all leads have come from an eligible referral source. Some companies have had the experience that, when such an incentive is offered, it appears that there is an attitude that someone may as well get the referral bonus so let’s be sure to code someone to get it every time.
5. A few months into your program, check with your sales people about the quality of the leads they are getting. Be sure you are clear with your referrers about what constitutes a good quality (well-qualified) lead. It will make everyone’s efforts more productive and the whole program more satisfying.

If you are just starting out with a commission program for people already on an all-base plan, then funding the commissions will be an issue. For variable pay to really motivate behavior, a number of conditions have to be met:

1. The eligible employees need to have the ability to make the results happen themselves, or as part of a very small team (2-6 people).
2. You need to be able to establish a productivity standard — know how much you expect the employee to “produce” (/sell/retain/collect).
3. There needs to be true at-risk pay so that the eligible employee will not earn their full market value unless they meet the productivity expectation and earn the full target incentive.
4. There needs to be upside for over-performance. This is the counter-balance to the risk you are expecting them to assume in #3 above. Without the possibility of better-than-expected rewards, the risk isn’t worth it. This means that your top performers (top 10% or so) should earn a small multiple of what is earned by on-target performers (1.5 – 3 times as much, for example).
5. You need to have, or be willing to hire, people in the role with an appetite for the rewards and risks of such a compensation arrangement – willing to bet on their own ability to make a difference, and excited about the prospects.

Of course you can move to such an arrangement gradually over time, holding base constant, adding a few percentage points of base to the incentive at target each year (5% or so), improving your goal setting abilities, and learning to manage under a commission program.