How to design commission plans for your sales team
Learn how to set up the best commission plans for your sales team. Make it an engine of growth and motivation for your sales.
A well-designed commission plan can make the difference between success and failure
Establish clear targets and goals
The number one objective of a sales commission plan is to align company business goals with sales rep behavior.
Determine the right performance metrics
There are many aspects to consider when you’re evaluating your team and determining what metrics will be best for them moving forward.
Align Finance and Sales
The sales compensation plan should be cost-effective and sustainable for the company over the long term.
Understand how your business expands, contracts, and churns
Truly understanding the mechanics of your sales engine and how your business expands, contracts and churns is critical to build the right compensation model.
Data engineering & modelling
Of course, data is critical. Consider hiring technical operations specialist to support Finance and Revenue Ops build efficient data pipelines.
Sales compensation doesn’t exist in a vacuum. Learn how to evaluate if your compensation plan is competitive against the market
Balance short-term and long-term incentives
Revenue is not all of it. Consider balancing short term (spiffs, commissions) and long term incentives (bonuses, equity, etc...)
Don’t tie yourself to a plan you can’t change.
A sales compensation plan shouldn't be set in stone. Review and adapt your strategy regularly to always best align sales goals with company objectives.
Let's review your sales compensation plan together! We are happy to help!
Are you thinking about changing your compensations plans but aren't sure how to best design it? Talk to us! We do this all day, everyday.