22 ms·
I've only been in low stakes sales roles (outside of personal projects) so this comes from someone with very little "professional" sales experience: The good:
by dkokelley 3y ago
I've only been in low stakes sales roles (outside of personal projects) so this comes from someone with very little "professional" sales experience:
The good: setting a target comp that is realistic and explained (e.g. "I expect you to hit $200K 4/5 times with this plan.")
The bad: plans with complicated rules (x% up to $Y in sales with a kicker + incentives for certain deal structures) can be demotivating and incentivize the wrong sales behaviors
The ugly: some high-intensity salespeople might thrive on the chaotic and unpredictable nature of comp structures. I don't love the idea of hijacking the "gambling/variable reward" centers of the brain to get what you want out of your people. Be fair and simple.
- marcus0x62 3y agoA plan that is x% up to $y in sales with an accelerator structure is a pretty simple plan. The x% up to $y sales thing is just a side effect of having a structure where you pay people based on attainment against a quota. If someone is supposed to make, say, $200k at plan, and is a sales rep on a 50/50 plan, then their base commission rate, the percentage they get paid for every dollar of sales, is $100,000 divided by their quota. By definition. The only simpler plan I've ever heard of is just a straight percentage of gross margin, but then the commission management scams move away from the comp plan and into expenses that eat into gross margin...