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Best Practices for Territory Commission Incentives

Stephen Watson's Profile

As a small organization we set commission eligibility and payout based on the billing address of the customer. This has caused issues with companies that have centralized, or billing departments in other territories which have been handled as manual adjustments. AS we’ve grown, and added sales regions, we are looking to revamp our policy but struggling to ensure we are motivating the sales team. The underlying principal we want is to pay commission based on geography of sales impact. Commissions based on where the sales result can be impacted by our sales team. How do other companies handle this, and how is this defined for your sales team?

Answers

Deanna Miller
Title: Chief Financial Officer
Company: Professional Plumbing Group
(Chief Financial Officer, Professional Plumbing Group) |

We have defined territories in our financial system (Dynamics AX) based on ship to location (rather than the bill to location). When we need to assign a customer to a sales territory that does not naturally fall into the geography, we can manually assign the customers in a way that the system saves the assignment. This feature has come in very handy as we have divided our sales force between those who manage geography and those who manage specific accounts.

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