The difference is that the “commission” is communicated as a “piece of the action,” whereas a “bonus” is a fixed incentive amount offered for achieving a specific objective. Commissions and bonuses both have their place in sales compensation plans – but knowing when to use which one can be a bit tricky.
While many established sales organizations use the hunter-farmer model as their sales force organization model, there are inevitably geographic territories or customer segments that do not justify both “hunters” and “farmers’…
The problem occurs when stellar performance this year results in a very high quota next year (calculated as a percent increase over this year’s results), and so a significant risk that the new higher quota will not be attained next year.
A lot of account movement between reps may point to opportunities to improve sales effectiveness that have nothing to do with compensation design, like…