Especially for large or complex sales, it often takes more than one person from the sales team to close the deal. If the two people are in different roles, for example the Account Executive responsible for the account and the Product Specialist responsible for sales of the key product, then both would usually receive full credit. If, however, two different Account Executives work together to close a deal, it may be appropriate to split the credit between them. The basic options are detailed below.
Double quota/double credit
Description: Each participant in a sale receives full quota and full credit for the sale (or “their” piece, e.g. Product Specialists take only their product slice)
Advantages:
- Strong encouragement for participation of multiple sellers in an opportunity
- Clear message regarding expectations communicated via quotas
Disadvantages:
- Difficult to model selling costs in relation to sales productivity
- Special care must be taken to ensure the team size is appropriate for the opportunity
Appropriate use:
- When it is possible to anticipate the requirement for participation of each team member in a certain class of selling opportunities
- When teaming is essential to the execution of the sales process
Credit splits
Description: Credit for all sales is divided among participating team members, with total credit adding to 100% of actual sale value
Advantages:
- Easy to model and anticipate selling costs in relation to results
- Opportunities will tend to be handled by the smallest effective team
Disadvantages:
- Disincentive to team with others due to anticipated reduction in sales credit
- Expectations regarding degree of teaming are not communicated via quotas
Appropriate use:
- When it is important to be able to assign a team to an opportunity “on the fly”
- When it is difficult to anticipate the teaming required, and therefore to set quota
There are ample variations on both of these types of incentive, including
- “Layered quota / layered credit” in which more than two people are involved in a sale (e.g., Account Manager, Product Specialist, and Channel Manager)
- Split credit with more than 100% of total sales being distributed (e.g., allow up to 200% credit, but with no more than 100% going to any one person/role)
Most complex sale requiring involvement of multiple sales people in most deals benefit from some form of shared sales credit. The appropriate form will depend on the intended coverage model and key accountabilities of each sales role. While the CFO will be concerned about “double paying” when several people receive sales credit and compensation for one sale, these concerns are generally allayed through rigorous modeling of the total cost of the selling function as it relates to overall sales productivity.
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.