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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?
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?
What about commissions paid for non-profit fundraising?
Fundraisers are often paid a percent of the funds they raise, though the fundraising organization is often hesitant to have that be publicly known. I have seen rates as high as 50%…
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).
Paying more than one person for a sale – When is it appropriate, and does it cost too much?
The practice of paying more than one person for the same sale is a common one, and one of the situations in which we most often find it is in Inside/Field sales teams. It is totally appropriate and makes sense to pay two people for a sale in either of the following situations…
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.”