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How do I best structure my sales commissions/incentives?

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Question added by Hany Sewilam Abdel Hamid , Director of Sales and Marketing , Creative Sense
Date Posted: 2015/08/31
ramy elzeny
by ramy elzeny , مدير فندق , راك

according to all excel revenue

Doug Larter
by Doug Larter , IE&C Engineer , Chevron

Sales incentives need to have some weighting factor related to profit and effort required in sale.. Example $10K sale with 15% and little effort could be $10K*0.15*0.02 (2% factor) OR same examle with high effort could be $10K*0.15*0.04 (4% factor). However, stock that is not moving could be another incentives factor.

In addition, target bonus's must be included in monthly incentive and this keeps sales force focused for complete period.

Lawal Fasola
by Lawal Fasola , Engineering Manager , Cainergy Group

Sales Commissions and Incentives should structured in such a way that will reflect individual contributions toward sales success. I should be per quantity of sales per individual.

Carlos Clemente
by Carlos Clemente , MEP QA QC Engineer , ARP Project Management

It should be per quantity of sales per individual.

Faouzi Hadj Said
by Faouzi Hadj Said , supervisor , PIRECO

It depend of  market demande ; number and competitors Cv; this shall be studied separatly and becom an input for strategie mangement for each application.

Ashraf Mahfoud
by Ashraf Mahfoud , senior instrument Engineer , Metal manufacturing "HADED "

honestly and frankly,sales commissions/incentives, should not be.

because it "commissions/incentives" will be at the expense of the kind and the quality of the job. 

Sameer Shaikh
by Sameer Shaikh , Senior Representative, HR Administration , Bank of New York (BNY-Mellon), Pune.

  1. Set incentive plans complexity wise like for the area where selling the product is very tough or need more convincing but still someone has achieved the target he should be paid greater amount.
  2. Another criterion is early bird incentive where someone achieves the target before timeline then he should be rewarded for that.

 

Hezron  Omari
by Hezron Omari , Training and programmes coordinator , New Era Governance international

First, you did not indicate the level of the company, but for starters, it is complicated to obtain an optimum level of commission where both the reps and the employer enjoy the fortunes. In young companies setting the baseline from nowhere is the primary challenge due to lack of sales data. It is only based on expectations which might be unrealistic.

 

First, make sure you pay your sales rep a decent but not too much to make them reluctant in closing sales. The commission is always a motivator to the sales reps, and it should make them yearn to increase their sales through surpassing the available target. Make it simple from the start because at this time there is no need to bring complex calculations which makes you or the sales reps feel lost.

 

Base your commission plans on the On Target Earnings (OTE). This is to say; you have to create a realistic OTE benchmark. Realistic in this context means that it should be a target that not more than 40% reps can exceed. If more than 40% of sales reps exceed the target, then that target is too low and will make it expensive for the company.

 

After setting the quota target, then you need to find the accelerator to the sales reps. Example if the rep exceeds the goal by 105% then every dollar above 100% comes with a benefit of 10-15%. This makes the sales reps energized to create more dollars after hitting the target. The accelerator should not be constant all through but keep increasing it with an increase in revenues above the set target. Keep in mind that

 

COMMISSION RATE: Variable/Quota

 

Note that, the Setting of commission needs proper marketing research and have realistic sales data on the latest volumes. Without these then it will leave the company guessing and this could bring unrealistic figures. 

Param Hans  Dwivedi
by Param Hans Dwivedi , Comed Pharmacls, Ltd

I can best structure sales commission / incentives by increasing the revnue of our employer or company for which we are serving.

After Acheving The Brake Even .. Commissions will start

 

Fernando Arias
by Fernando Arias , Mechanical Inspector / Consultant , ACI Proyectos - Cenit

Sales is not my strength, but I think the best structure than I can have,  is not just to sell. It is create, show the potential buyers clear information about our products and services and create to them the best company image! Must be pay according cost porcentage and give value to the good company name the people got. 

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