In some businesses the job of identifying qualified interested prospects is done by an inside lead generation role. When considering incentive compensation arrangements for these roles, these tips may be helpful:
- Pay only for leads that close, not for all appointments/leads. If you pay for all leads, you’ll likely compromise lead quality and end up wasting the time of your sales people who will have to re-qualify them before investing more time.
- If the Lead Gen person has some ability to know which leads are likely to close as “large” deals/relationships (whatever that means in your world) and which ones could be smaller, then you may want to pay differently based on deal size – less for smaller deals and more for larger ones. If, however, they have little ability to anticipate eventual deal size then you might just pay a flat amount for leads that close.
- How much to pay for each lead goes back to the basics of how much you need to deliver in total comp, how much in the base vs. the incentive, and how many deals (or how much sales value or margin value) you expect to come out of their efforts. Then you do the math to figure out the rates. And if it’s not affordable, then you’ve got a selling model issue (means this may not work for your company).
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.