Sales people love accelerators: those increased commission rates that kick in after reaching a target. Who wouldn’t? But run a few reports, and you’ll see two-tiered compensation plans mean almost everyone fights to get above that accelerator… and then drastically slows down.
This could mean you’re setting up quotas perfectly, of course.
Or it could mean that sales reps are slowing down their behavior when they stop making more money.
In fact, they might be saving deals to punch up their profits next quarter.
Data shows that after salespeople exceed quota, they stop—unless they have an incentive to keep going (Sales Management Insight).
But the right incentives can produce killer sales results. Salespeople will do their best when your sales compensation plan encourages it. If you increase the incentive for reaching higher commission tiers, you’re likely to see increased sales performance.
One way to do this is to implement multiple accelerators and create commission tiers. If you reward for hitting quota, you should also reward for sales performance above quota. Experiment with profit-based commissions: They mean salespeople prosper when your business does, too.
Higher rewards for higher performance raise the payoff for salespeople—pushing them to bring in even more profit.
And who wouldn’t want more of that?