Tag Archives: Double credit

Paying more than one person for a sale – When is it appropriate, and does it cost too much?

The practice of paying more than one person for the same sale is a common one, and one of the situations in which we most often find it is in Inside/Field sales teams.

It is totally appropriate and makes sense to pay two people for a sale in either of the following situations:

  1. It takes both to get it sold (for example: the field person secures the contract then the inside person follows up to ensure units are purchased and deployed; or the inside person identifies opportunities and makes appointments, and the field person shows up to demonstrate the product and close the sale).
  2. Some opportunities need only one team member or the other, and others need both, and you want the team to work out the most efficient way to get the most sales between them without any penalty to either.

In contrast, individual measures and credit to only one person for each deal makes the most sense when the customer base can be stratified so that one set of customers is totally covered by Inside, and another by the Field. Most often this is done based on the size of the customer. This arrangement allows very clear accountability for success and simple crediting and compensation calculation. When it is not used, it is generally because the teamed selling approach is deemed to be a more efficient one.

If there is shared credit for each sale, the key to ensuring that the right selling focus occurs at the right cost of comp for the company is to set the rates so that appropriate total pay is delivered to each person when the TEAM makes their goal. For example, if the company intends to spend 10% of margin on sales compensation, it could be spent as 4% to Inside / 6% to Field, with both are paid for all sales. This has to also work in the context of the expected productivity of the teams, and the market value of their jobs.

One other common challenge with this occurs when the team members feel that their earnings opportunity is negatively affected by the level of competence of their partner. So if an Inside person is paired with a new or less productive Outside partner, the Outside partner’s lack of productivity is likely to adversely affect the compensation of the Inside person. This will often drive organizations to expand team size or revert to separate quotas and sales credit.