Page 40 - PBT Bangkok

Compensation Plan Tactics Key Considerations

Consider paying commissions on total • Requires working capital to offset future customer payments
contract value upfront
• Effective way to have sales teams and service delivery team stay focused on
Pay sales bonus for Cloud deals Cloud sales

Offer accelerators for closing multi-year • Provides short term rewards to sales teams
deals • This tactic can help offset the “wait time” to commission on recurring revenue

Offer annual incentives for renewal deals
targets • This can keep the sales team engaged with customers to ensure your

Consider paying incentives for new organization maintains the retention revenue and operates at a 90% renewal
customer contracts rate

CRITICAL – Define future year recurring • Allows sales teams to generate short term commission payments in support
revenue compensation of long term company objectives

Option 1 – • Future year commission payments policies regarding ownership and transfer
Allow sales reps to create a “book of need to be put in place from the beginning
business” like an insurance agent
Option 2 – • Future year commission payments are treated like an existing book of
Pay sales reps for the first several business, not unlike an insurance agency
years
• Some partners are treating this like maintenance contracts (and not paying
commission) or paying commissions for the first several years

© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 40