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SAYNORSALES SOLUTIONS

Commission plans that reward the right behaviour

By Scott R. K. Saynor

Salespeople do what they are paid to do. If the plan pays on volume, you get volume, including the deals that cancel, the customers who never pay and the discounts that wipe out the margin.

Pay on what the business keeps

Pay commission on deals that complete, on the value the business actually receives. If a deal falls away within an agreed period, a fair clawback rule recovers the commission. Write the rule down before the first deal, not after the first dispute.

Make the next tier worth reaching

Tiers work when the step up is close enough to see and large enough to matter. A plan with six tiers nobody reaches motivates nobody.

Reward the larger deal

One well-qualified larger deal is often worth more than several small ones, and takes less of everyone's time. Structure the plan so your people can see that.

Keep it on one page

If a salesperson can't work out their own commission on the back of an envelope, they won't trust it, and a plan nobody trusts changes nothing.

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