What most companies never measure? The incentive ROI. Most organizations believe their incentives plan works just because the revenue stream is trending upward. Organizations run their sales compensation plan blind. No companies measure if their incentives create incremental revenue or are they just paying for what would have happened anyways. The reason why? Incentives are
Creating sales compensation plans typically involves spreadsheets, financial models, and quota projections. But buried within every quota and payout plan is something much more powerful: human nature. Sales reps are driven by more than just percentages and quotas. They are driven by their motivation to earn, risk tolerance, psychological triggers, and sense of fairness. In
Sales organizations spend months crafting their sales compensation plans each year. Executives brainstorm quotas, commissions, accelerators, and business goals to ensure reps’ behaviors align with the company’s strategy. It looks great on paper. But by Q2 things start to go sideways. Leaders notice increase compensation exceptions, margins shrinking, unpredicted spikes in payouts, and angry reps
Sales compensation plans have been historically built around one key driver which is revenue. If you met quota, you get your commission. If you beat quota, accelerators were applied and commissions got bigger. This worked fine when margins were consistent, pricing power existed, and product portfolios were less robust. Unfortunately, revenue trends have changed. Organizations
