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Recommended comp structure for direct sales

We are considering a direct sales model for reaching service providers (who are one of our customer bases). I have tried fixed, variable and combo comp plans for sales teams in past lives as CFO. None of them seems optimal. It’s either "too tough" to meet the goals, or "not motivating enough" for the salespeople, or the base isn’t high enough for them to “maintain” their lifestyle. Any preferred setups out there?


Rajeev Seshadri
Title: CFO
(CFO, ) |

No sure if I have a direct answer. A couple of examples may be illustrative - (a) we set a sales quota and an percentage of sales, sales commission target for each sale. If the quota was met, then the commissions easily surpassed the base draw paid; and (b) We paid on a 'cash-in' basis, a certain percentage of sales. The cashin was offset by the draws/base set in place.

Each of these required a 90-day initial ramp-up investment.

Hope this helps.


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