Salespeople play crucial roles in every business. They're the ones who sell the products, rope in customers, cut new deals, and grow profits. That's why motivating them to perform at their best level at all times is in the organization's best interest. But simply doling out money for every sale made isn't an ideal solution. There's much more nuance to creating a well-planned commission strategy that maximizes their potential.
One aspect of designing a commission strategy is customizing compensation and tailoring it according to the different roles of the sales team. Not every member does the same job. This difference needs to be addressed while allotting incentives and commissions. After all, different roles have different measures of success.
Even though the team's end goal represents closing more deals and boosting growth, their responsibilities differ from one another.
To understand how to create a compensation strategy that caters to each role and responsibility, we need to understand the duties they perform.
What are the different roles played by a sales team?
The Account Executive (AE)
The account executives shoulder the bulk of the most visible sales team roles - dealing with potential customers and closing deals. They're the ones who understand the entire sales funnel and help guide the customers through it as quickly as possible. It's a front desk role as they face the customers directly, answering all their questions and convincing them to sign up. They tend to have the biggest impact on which deals get closed and when.
Their incentives must be designed to encourage them to close deals quicker. Additional compensation can be provided according to the number and size of deals they close.
The Sales Development Representative (SDR)
The SDRs on a sales team are the ones who usher in new leads into the sales funnel. Their main job is to bring in as many new, qualified leads as possible from a variety of sources. The most common lead generation methods involve cold calling, cold emailing, forms, telemarketing, and advertisements.
Some enthusiastic SDRs also use list building as a legitimate method to verify leads and send them down the funnel. Even though their role is important, they have little to do with actually closing the deal. Once the lead is assigned to an AE, their job is done.
Their incentives should be drafted in a way that motivates them to bring in as many highly qualified leads as possible. They should be rewarded based on the quality and number of leads they bring in.
The Sales Consultant
Sales consultants don't have any contact with either the leads or the customers. Nevertheless, their role cannot be neglected. They work behind the scenes to set up the sales funnel, design demos, and write up sales pitches for the AEs to follow. They often also play a hand in training the front-end sales workers to do better in the field. Their impact is most felt in complicated sales processes with multiple steps.
Since their numbers aren't directly related to the sale, incentives can be designed to reflect their inputs' impact in closing deals.
The Customer Success Representative (CSR)
The sales process doesn't end upon the signing of a contract. Even after the sale is marked as won, there's a lot of work left to do. This is where the CSRs come in. They take over the customers once they've signed a deal with the AEs. Their job is to upsell and cross-sell new products and offerings while ensuring that the customers remain satisfied with the service. Creating repeat revenue and reducing churn is part of their job description.
This role requires a commission strategy that rewards consultative outreach and up-selling opportunities being created.
The Sales Manager
This is the lead role in the team. While they won't have much to do with actual selling, their primary responsibilities lie in managing the team. The team's continued success falls under the purview of the manager. It's their job to make sure all the quotas are being met, high-performing salespeople are being rewarded, and poor performers are being trained to do better. The team's success and failures reflect back on them.
Managers usually have high fixed salaries. Their incentives are tied in with their team's performance. The better their team does, the more they can potentially earn.
It’s important to set up a commission strategy that factors in on the expectations from every role. This process can become convoluted as the sales team gets bigger. Automating the entire process with the help of a sales commission tracking software such as Blitz can improve overall performance, maintain high morale, and eventually help the business grow.