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Sergio Zuniga 04.06.2021 7 min read

5 Tips for Paying Sales Commissions and Incentives to Your Team

Sales commissions and incentives are quite popular amongst the world of salespeople. This is because it attracts hard-working individuals who like to see the results of their work right away, and is a win-win for both the employer and the employee.

So, how can you leverage commissions and incentives to keep your sales teams motivated? Here’s what you need to know.

What is a Sales Commission?

When it comes down to it, a sales commission is simply a percentage taken by the salesperson off of the sale that they make.

However, there are a variety of ways to pay commission to your sales team, and picking the right type of commission and incentive for your sales team can make or break your business. You want to ensure that you’re giving them a fair incentive for their work, while also balancing what’s best for your business. These include:

Relative Sales Commission

Rather than earn a percentage off of every single sale a salesperson makes, some companies will set a quota for their salesperson to reach. Then, their commission is based on how much of their quota they’ve reached. This type of commission system works well for teams of salespeople, as they can reach their quotas together, or for independent sellers.

Absolute Sales Commission

This type of sales commission means that every sale or form of revenue your sales person brings in, they get a percentage from it. Whether that’s paid immediately or on a later date is up to you as a company. This type of commission is best for a business that has more of an aggressive/independent sales team.

Territory Volume Commission

This is a great commission form for teams. Territory volume commission rewards the whole sales team based on how much of a territory they’ve won over, and then divides it evenly at the end of the pay period. This form of commission also helps reward those who are supporting the sales, and may not directly be making the sales, which can be great when keeping employees happy.

Now that you know the different types of commission that you can use and what might suit you best, here are 5 tips to help you best pay out your commission to your sales team:

Don’t Cap Their Commission

This is a great way to motivate your team. It allows them to keep earning as much as they can make, while also bringing in a bevy of clients to your business. It’s a win-win for both!

Set Realistic Goals

When it comes to your salespeople, of course you want ambitious employees. However, you don’t want to end up setting unrealistic goals that they can never achieve. If you keep setting goals that are so out of reach, you end up with a frustrated and unmotivated sales team, which could end up hurting your business and sales.

Ensure You Have the Right Salespeople

When hiring your salespeople, make sure you’re hiring ones who are ambitious and up for a challenge. You don’t want to have a team of sales people who aren’t wanting to reach or even exceed their goals. Rather, equip yourself with a team that wants to go above and beyond their goals and earn the most for themselves and your business.

Keep It Simple

Don’t overcomplicate how your salespeople get their commission or incentives. It shouldn’t take an Einstein to decipher how they earn their money. Rather, keep everything clean and simple so your sales team can focus their energy on selling for you.

Encourage Teamwork

Now with sales, this can sometimes be hard, especially if you’re employing the absolute sales commission. However, it is possible, especially with quota or territory sales commissions, and can help your business reach higher sales goals when you have a group of talented sales people all working towards the same goal.

Simplify the Way You Track Your Sales Commissions With Blitz

By following the five tips listed above, you can ensure you’re challenging your sales team while also being balanced. And when it comes time to process those sales that your team brings in, Blitz has an all-in-one sales process for you to fall back on.

 

Book a demo with one of our specialists today to learn more about how you can empower your business and seamlessly integrate this sales commission tracking solution to all your current software.