Why You Should Overcompensate Your Sales Team

Palette Team

At Palette, we believe that when it comes to sales compensation plans, companies should reward high performers handsomely while under-compensating poor performance. This approach helps build a sales culture of high performance with the goal of revenue growth. 

Data on SaaS compensation seems to corroborate this viewpoint. According to a report on Go-to-Market Compensation and Incentives from Iconiq, “Best in Class companies typically compensate GTM teams by 20% more than average companies.” Here, “Best in Class” was defined as companies with over $10M in ARR, YoY revenue growth of 30% or more, strong retention, and strong sales team performance. Companies with strong performance also had differentiated compensation structures. While compensation often varies depending on seniority, region, and company performance, top companies go further in tailoring their compensation plans to maximize performance for each role and situation. Reps earn different commissions based on a number of factors, such as customer segment, sales motion, team (i.e. inside vs. field sales), and more.

There is no one size fits all solution here; the best way to figure out what works for your company is to conduct an analysis of your sales pipeline and determine what works well and what areas can be optimized. Replicate and expand on areas of success while experimenting with new approaches for areas of subpar performance. Of course, clear and easy to access analytics for your sales compensation plan are key here, and come standard with any strong sales compensation software.

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Why Palette?

Automate calculations

Automate sales commission payments. Create commission rules, define a payout schedule and access monthly statements for each sales rep.

Motivate and coach with real time dashboards

Motivate sales professionals with real-time visibility into commissions. Coach your team, align everybody with company goals and drive long term sales performance.

Compare, simulate and design commission plans

Roll out new commission plans with ease. Compare plans and simulate new rules with a single click.

No more errors

Palette keeps history logs and tracks every calculation detail, helping you to reduce sales commission errors.

Reconcile revenue with CRM data

With Palette you can reconcile invoices and payments with CRM data and pay commissions to your reps only when the money is in the bank.

Create challenges with one click

Incentivize your teams on short term goals. Create a challenge targeting any KPI you want to uplift, drive better results and boost your company’s culture.