Commissions for sales reps are the number one investment for the overwhelming majority of companies. This makes it, on the one hand, a very important financial topic and, on the other, a super-powerful psychological tool for aligning the behaviour and therefore the performance of sales reps.
However, building a motivating commissions plan is a complex task that requires specific skills and knowledge.
At a webinar on the topic, Gabrielle Gaurier (Head of Sales at Qobra), Adrien Vicard (Head of Sales at Welcome to the Jungle) and Benjamin Mouquet (Head of Sales at Cognism) shared their advice, methods and tips for setting up a motivating commissions plan for their sales reps!
1. The benefits of a good commissions plan
Motivation and sales rep performance
A good commissions plan is much more than just a financial incentive. It is a powerful driver of motivation and performance for sales reps.
By offering opportunities for additional rewards over and above the targets set, through flat-rate commissions or sales accelerators, sales reps are encouraged to go beyond their own limits!
"In my experience, it's the sales reps who are very good at looking at their options. They look at the different offers on the market, look at what we can offer them."
Benjamin Monquet, Head of Sales at Cognism
To attract and retain the best talent, it's essential to offer them the chance to make significant gains based on their performance!
However, as Adrien Vicard points out, the effectiveness of a commission plan depends largely on the nature of the product or service being sold.
"In my opinion, the success of a commissions plan depends very much on how difficult it is to market the product. When creating the commission plan, you have to select the factors by thinking about the product, sales cycle, personae, etc."
Adrien Vicard, Head of Sales at Welcome to the Jungle
The experts' testimonials during the webinar highlight the real impact of a good commission plan on sales rep performance. Adrien Vicard shares his experience at Apple, where motivated salespeople were able to impose the company's vision without commissions. However, he also highlights the benefits of a well-designed commission plan in boosting sales and motivating teams.
The figures also speak for themselves. At Cognism, for example, 50% of salary are commissions, which testifies to the importance attached to this motivational mechanism. In addition, the move to more frequent commission payments, such as monthly rather than quarterly, has shown positive results in terms of motivating sales reps.
Alignment with corporate objectives
A good commissions plan not only motivates sales reps, it also contributes to achieving the company's strategic objectives. It is essential to define a global strategy for the company and to reflect this in the sales team's commissions plan.
"The first thing to bear in mind when drawing up a commissions plan is to define the company's strategy and the sales team's strategy. If there's a misalignment between the strategy and the way in which the commissions plan is constructed, it's bound to fail."
Gabrielle Gaurier, Head of Sales at Qobra
A good commissions plan offers a multitude of benefits for both the individual and the company. As well as motivating and rewarding outstanding performance, it helps to align sales reps with corporate objectives, reinforcing the overall success of the organisation.
2. The key elements of an effective commission plan
Use existing frameworks
Rather than reinventing the wheel every time, it is also advisable to use tried and tested existing frameworks. By drawing on successful models that are already in place, you can create an effective remuneration plan quickly and without too many complications, depending on the stage of development of your business and your strategy.
Balancing individual and collective performance
It is important to have a balanced distribution between individual and collective performance in the remuneration plan. Once again, it is advisable to adjust this distribution according to the needs of the company and its teams!
"Today, at Welcome to the Jungle, the level of individual contributors is 50% on individual performance, 25% on the sub-team since we have sales reps according to the different segments, and 25% on the Sales team as a whole. This distribution supports the collective dynamic, because it generates commitment. As soon as you win a deal, the whole company is extremely happy for each other.
Adrien Vicard, Head of Sales at Welcome to the Jungle
Setting commission thresholds
A system of progressive commission thresholds based on performance helps to maintain a constant level of motivation while rewarding exceptional performance.
"At Welcome to the Jungle, if you achieve 50% of your target, you'll get 30%, 80% of the target, 60% of the commissions."
Adrien Vicard, Head of Sales at Welcome to the Jungle
Be flexible and adapt annually
It is important to adapt commissions plans each year in line with the business cycle. Plans should be reviewed regularly to ensure that they are in line with the company's objectives and adapt to market developments.
"You have to allow yourself the freedom within the company's culture to have the ability and even the need to adapt your compensation plan according to the company's objectives. I spent quite a bit of time studying Aircall's model, there were 5 fundraisings, they adapted their compensation plan 5 times each time according to the company's interests."
Adrien Vicard, Head of Sales at Welcome to the Jungle
Setting up sales reps
To maintain team commitment, it is crucial to incorporate gamification elements into the remuneration plan. Gamification should not be excessive, but rather targeted at aspects that are important at a given time.
For example, setting up a SPIFF sales rep can boost sales over a given period. This type of out-of-the-ordinary initiative can give a significant boost to the sales team's performance!
"I'm firmly convinced that SPIFF sales reps are a good way of getting a boost at times when you don't have the energy in the team to focus on the element you need, or when you need to accelerate other elements."
Gabrielle Gaurier, Head of Sales at Qobra
🛠️ The practical tool
Within its commission management platform, Qobra has created a function dedicated to the organisation and running of SPIFF sales reps. Each participant is alerted in real time about the achievement of their objectives and those of their team, as well as the ranking of the best sales reps. Qobra also enables companies to benefit from in-depth post SPIFF sales reps analysis.
Adopting transparent communication
Clear and transparent communication about the commission plan is essential to ensure team buy-in. It is important to discuss the plan regularly with team members and to clarify any changes or adjustments.
What's more, to achieve high-performance results, it is essential to provide sales reps with real-time visibility of commissions, to encourage them to trigger and exceed them.
🛠️ The practical tool
Qobra is a platform for automating the calculation of commissions and for sharing and validating sales reps' variable pay. Qobra saves companies considerable time compared with Excel, builds confidence by reducing complaints and stimulates growth by giving sales reps visibility.
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Implementing an effective commissions plan requires a considered and adaptive approach. By taking advice and recommendations into account, it is possible to create a plan that effectively motivates and aligns your sales reps with your company's objectives. Flexibility, creativity and transparency are key elements to incorporate to ensure the success of the commissions plan.
3. Key tips for a good commissions pay plan
Involving teams in the design process
The power of involving teams in the design of the commissions plan should not be underestimated. They have valuable local knowledge and can provide valuable insights into what really motivates them. Their feedback can ensure that the plan is well adapted to their needs and those of the company.
"The first piece of advice is to talk to the sales reps to start with, to find out what would suit them."
Benjamin Mouquet, Head of Sales at Cognism
Aligning with the company's mission and growth phase
To be a success factor, a commissions plan must be adapted to each stage of the company's growth:
- The customer acquisition phase
- The customer loyalty phase
- The sustainable growth phase
"When you build or review your commissions policy, you need to be sure that it aligns with the company's mission and expansion phase."
Adrien Vicard, Head of Sales at Welcome to the Jungle
Favouring quality results over quantity
Rather than focusing solely on quantitative commission indicators, such as the number of meetings organised, focus on the quality of results. Incentives based on quality objectives will encourage more effective behaviour that is aligned with the company's objectives.
Simplifying communication and clarifying metrics
Transparent communication and clear metrics are essential to ensure that the commissions plan is understood and accepted by all. Excessive complexity should be avoided as far as possible, and objectives should be clear and achievable.
The last word...
A good commissions plan goes well beyond the financial aspect, it is a real lever for motivation and dynamism for sales reps. By offering financial incentives aligned with individual and collective performance, companies can attract and retain the best talent, while promoting the achievement of sales reps objectives.
It is essential to build this plan taking into account the specifics of the company, its market and its overall strategy. The use of existing frameworks, a balanced distribution between individual and collective performance, the establishment of thresholds for triggering commissions, and the adoption of transparent communication are all key elements to be integrated into this process.
Finally, involving teams in the design of the plan, aligning it with the company's mission and its growth phase, and focusing on the quality of results rather than quantity are all tips to follow to ensure the success of the commissions plan.
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