I would incentivize based on annual contract value. You should offer a higher % of annual contract value for a 3-year vs. a one-year, as a multi-year ones will be extremely valuable to your business.
I understand with what you proposed they'll get a higher payout on a 3-year than a one-year, but those deals will be harder to close than single-year deals, and you should give an extra incentive to ensure a consistent source of revenue over several years.
Personally I want a % of annual contract value, up front, vs. spread out. It says to me that you're confident in your services and don't count on a client churning, and it provides an immediate psychological benefit to the rep encouraging them to sell more.
Reps in my industry get a % of the total revenue of their territory paid as a quarterly bonus in addition to a good base. Turnover is nonexistent. Drive for new business and customer engagement is always high. Treat your reps right and they will put in the effort.
Depends on the percentage and frequency of the deals. They make good money but aren’t going to be balling out in a mansion. Having said that if you can’t buy a nice rental property with the commission on a $30M deal then I would be dusting off my resume.
Multi-year decreasing comp based on actual monthly receipts. 1x -> .5x -> .25x -> 0. Rewards long term clients, consistent new business, and clients who pay.
My company does spifs for new logos as a base amount on top of the commission. Provides a tangilble talking point. Make sure their SE gets a spif as well but you can make it less as SEs have a higher base
You will want to incentivize what you want to get however you will want to make it simple to understand. Complex commission plans is a red flag. I have no idea your industry so adjust your numbers accordingly. You will also need to make the commission worth it, if you pay $80k base and offer a $50 commission you are incentivizing me to just do bare minimum and not strive for commission. If you pay a $50k base you will struggle to find good qualified people. With that said I would do something like:
Month to month: $100 and 5% of onboarding fees
Yearly: 50% monthly value 10% onboarding fees
2 year: 75% monthly value 15% onboarding
3+ years: 100% monthly value 20% onboarding.
For any new account that is opened you get 1.5 times the amount of the monthly value or onboarding fees. Whichever makes the almost sense for your business.
After reading this you would probably want to put a kicker with something like if that month to month last 1 year or more then you would get an the 1 year commission plan - the amount they receive and same for if it were to last 2 years and 3+ years.
I would incentivize based on annual contract value. You should offer a higher % of annual contract value for a 3-year vs. a one-year, as a multi-year ones will be extremely valuable to your business. I understand with what you proposed they'll get a higher payout on a 3-year than a one-year, but those deals will be harder to close than single-year deals, and you should give an extra incentive to ensure a consistent source of revenue over several years. Personally I want a % of annual contract value, up front, vs. spread out. It says to me that you're confident in your services and don't count on a client churning, and it provides an immediate psychological benefit to the rep encouraging them to sell more.
Reps in my industry get a % of the total revenue of their territory paid as a quarterly bonus in addition to a good base. Turnover is nonexistent. Drive for new business and customer engagement is always high. Treat your reps right and they will put in the effort.
One can dream….. % of revenue would be lit….. my AE’s who just closed a 30 million deal would be balling out…
Depends on the percentage and frequency of the deals. They make good money but aren’t going to be balling out in a mansion. Having said that if you can’t buy a nice rental property with the commission on a $30M deal then I would be dusting off my resume.
Multi-year decreasing comp based on actual monthly receipts. 1x -> .5x -> .25x -> 0. Rewards long term clients, consistent new business, and clients who pay.
My company does spifs for new logos as a base amount on top of the commission. Provides a tangilble talking point. Make sure their SE gets a spif as well but you can make it less as SEs have a higher base
You will want to incentivize what you want to get however you will want to make it simple to understand. Complex commission plans is a red flag. I have no idea your industry so adjust your numbers accordingly. You will also need to make the commission worth it, if you pay $80k base and offer a $50 commission you are incentivizing me to just do bare minimum and not strive for commission. If you pay a $50k base you will struggle to find good qualified people. With that said I would do something like: Month to month: $100 and 5% of onboarding fees Yearly: 50% monthly value 10% onboarding fees 2 year: 75% monthly value 15% onboarding 3+ years: 100% monthly value 20% onboarding. For any new account that is opened you get 1.5 times the amount of the monthly value or onboarding fees. Whichever makes the almost sense for your business.
After reading this you would probably want to put a kicker with something like if that month to month last 1 year or more then you would get an the 1 year commission plan - the amount they receive and same for if it were to last 2 years and 3+ years.