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How to pay for “sales” in a freemium model?
We have a sales role with the job of helping existing customers get better value from our service – but “success” will not result in a contract or a specific sales event. How do we comp for that?
If a sales person is retiring do we “buy out” their future commission stream?
Who really “owns” the commission stream? Did the sales person create it single-handedly, or was it the result of a great company offering, solid strategy, and a repeatable selling model?
Why is it important to set Target Total Compensation for a role?
Target Total Compensation (TTC) is the amount of pay that a role (not a person) is expected to earn at 100% of expected performance. This number is absolutely essential to developing sound compensation plans. Without it you will not know who is doing better than expected and who is doing worse. Compared to what?
Why should I pay incentives to my employees when the company has not hit its overall goal?
This is a common question, especially for smaller companies, whose resources are limited. It’s certainly understandable for a manager to want to develop an incentive plan that only pays out of the company profits (if there are any).
Cost of compensation and pay mix – how do they work together?
Many sales leaders and CFOs feel there are real business benefits to a high-risk / high-upside comp plan, including a reduced cost of compensation overall. Turns out they’re wrong about the cost…
Quarterly or half-yearly quotas – when is it a good idea?
Done correctly, smaller measurement periods can contribute to improved quota accuracy, consistent deal flow throughout the year, a more motivated and productive sales force, and a better value for the sales compensation dollar.
My employer thinks I made TOO much last year therefore he has a new pay package for me which caps my sales commission!
No caps. We rarely recommend a sales comp plan be capped – no need to take your top performers’ motivation out. But we do recommend deceleration at high levels of attainment, per-deal caps, caps on the % of margin on a deal that may be paid to the rep, etc. – these keep pay rational…
What is a fair commission to pay for setting appointments?
It’s probably best to start with the total comp needed to attract the right kind of people into the role, and a reasonable number of appointments they should be able to set…
Why would I pay incentives to sales reps when the overall company is not hitting its goals?
Making Your Numbers…Better Newsletter, September 2010 – Should you pay incentives to sales people if your company is not hitting its overall goals? Yes, if that incentive pay makes up more than just a token year-end bonus.
“It takes a village” to close our deals – why does only the sales person get paid?
It’s true in just about any sale that the sales person must be part of a team that has the right offering, the right delivery system, and the right business model to create perceivable value. So why reward some of the team and not others when a sale is made?