A tightly-structured commission plan is like organizing a trip with your college buddies. You sure ain’t getting a pat in the back for a job well-done but even if there is a minor glitch, you will never hear the end of it. Likewise, you’re not going to receive applause from your customer-facing teams for putting together a great compensation plan. It is a thankless job and it’s not a walk in the park either.
When I first wanted to create my own commission plan, I found guides online but nothing elaborate enough where I could consider all inputs before making the right choices. Everyone had their own version of what worked within their SaaS firm. So, we thought we’d create a series covering as many aspects of creating a compensation plan as possible. We’ll look into various roles, industries, level for GTM teams so that you can create a plan from scratch after considering all outcomes.
When you’re trying to come up with the perfect commission plan, you are likely to encounter two problems:
So, how on earth does one make the perfect commission plan? Well, some might argue that the concept is as real as a mythical Sasquatch that doesn’t exist (wait, or does it?). However, you can sure head to the Great Lakes and at least enjoy that nice view.
Commission guides are extensive articles that cover things like what kind of commission plans to use, what components to choose and what behaviours to incentivize. It is a one stop solution that covers everything that you need to know before starting to create a commission plan. Even if you have an existing plan in mind, it is good to go through the guide to see if there are some components that you can include in your plan to make it more efficient.
Our templates were made after extensive research and analysis with experts who have a 10+ years of experience in Revenue Operations. These templates cover every component that have been used based on each role and also cites examples that explains how those components work. This can be edited and quickly be shared within your organization to your Operations leaders and GTM leaders for quick review.
Best practice for making an ideal commission plan is to have 1 primary component that an executive is incentivized on for ≥ 60% of their incentive. You can include 1 secondary components if necessary . Have a standard rate matrix to incentivize over achievement and have some bonus components that to incentivize specific behaviours. The simpler the plan, the more likelier that it works as intended. Having too many components can distract your GTM executives from executing on their primary objective.
SPIFFs are temporary one time incentives that are usually run to boost a specific behaviour where as a commission plan is something that remains the same throughout the year. Any new component that needs to be added to a commission plan should be first experimented as a SPIFF to see if they work appropriately before including them in commission plan.