Page 77 - Partner Business Transformation Workshop Refresh
P. 77
Sales compensation - a critical success factor!
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 and service delivery teams stay focused on Cloud sales
Pay sales bonus for Cloud deals • Provides short term rewards to sales teams
Offer accelerators for closing multi-year • This tactic can help offset the “wait time” to commission on recurring revenue deals
deals
• This can keep the sales team engaged with customers to ensure your organization
Offer annual incentives for renewal targets maintains the retention revenue and operates at a 90% renewal rate
Consider paying incentives for new • Allows sales teams to generate short term commission payments in support of long
customer contracts term company objectives
CRITICAL – Define future year recurring
revenue compensation • Future year commission payments policies regarding ownership and transfer need
• Allow sales reps to create a “book of to be put in place from the beginning
business” like an insurance agent • Future year commission payments are treated like an existing book of business, not
unlike an insurance agency
• Pay sales reps for the first several years
• Some partners are treating this like maintenance contracts (and not paying
commission) or paying commissions for the first several years
