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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?
Sales Compensation Focus, July 2010 – The economy appears to have taken a positive turn and many companies are starting to think about growth: hiring more sales reps, launching a new product, or breaking into a new market segment. One of the first questions that is raised when a company returns to growth mode, especially if there has been significant retrenching, is, “What should we do with our sales compensation plans?”
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?
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 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?
My company is in the throes of revising the comp plan for next year and one of the most hotly debated items revolves around compensating a salesperson on all business generated from dollar one for the life of the account. Currently our firm doesn’t discriminate…
In professional services, do you compensate differently in sales plans for “new” business vs. maintaining an account to incent your best “prospectors” to develop new business?
I believe your question is about sales roles with a new business focus when the acquired business generally turns into a long-term annuity type relationship. Examples from my experience include…