Account Managers usually have responsibility for managing the relationship and growing the business with assigned existing accounts.
There are many possible compensation arrangements for Account Managers — but here are some tips that may help guide the design process:
- Account Manager roles are generally rewarded for growing their assigned accounts — ideally growing account profitability if it can be measured.
- Compared to the “hunter” job (what I think you’re calling the Sales Department), they would generally have less pay at-risk (as a percent of total comp).
- The Account Manager would be more likely to have a bonus type mechanic than a commission. (A bonus is an incentive that delivers a pre-established payout amount for hitting a pre-established goal, and less for under-performing, more for over-performing. A commission is communicated as a percent of productivity, like 3% of sales.)
And, as always, the measures and acceleration points in the comp plan should focus the Account Managers squarely on delivering the results most needed by the company — which varies from one company to the next.
Donya Rose, CSCP, is Managing Principal of The Cygnal Group. She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.