Page 36 - PowerPoint Presentation

Sales Compensation
Compensation Plan Tactics Key Considerations
Consider paying commissions on total
contract value upfront
Pay sales bonus for Cloud deals
Offer accelerators for closing multi-year
deals
Offer annual incentives for renewal
targets
Consider paying incentives for new
customer contracts
CRITICAL – Define future year recurring
revenue compensation
Option 1 –
Allow sales reps to create a “book of
business” like an insurance agent
Option 2 –
Pay sales reps for the first several
years
• Requires working capital to offset future customer payments
• Effective way to have sales teams and service delivery team stay focused
on Cloud sales
• Provides short term rewards to sales teams
• This tactic can help offset the “wait time” to commission on recurring
revenue deals
• This can keep the sales team engaged with customers to ensure your
organization maintains the retention revenue and operates at a 90% renewal
rate
• Allows sales teams to generate short term commission payments in support
of long term company objectives
• Future year commission payments policies regarding ownership and transfer
need to be put in place from the beginning
• Future year commission payments are treated like an existing book of
business, not unlike an insurance agency
• Some partners are treating this like maintenance contracts (and not paying
commission) or paying commissions for the first several years