Tag Archives: Linked components

How do you design sales comp plans for sales roles that have to do two different things well?

When sales people have competing objectives… imagine the following scenario:

A company has two different products for banks: core processing systems and lending products. For the two products, there is a large difference in the incentive opportunities. For example, the incentive opportunity on $1.5M processing system sale is $75,000 (5% commission). The incentive on a lending product sale may be only $5000.

How do you motivate the right focus and results, limit “elephant hunting,” and keep both product lines productive?

Several possible approaches:

  1. If there are skilled “elephant hunters” on staff, a role could be carved out for them that tolerates, even rewards that behavior. You would probably then also need a designated lending-only role. So… split the roles and play to strengths.
  2. If you want to have one person cover both, and if it is indeed essential that they do both, then you need an “And-type Comp Plan” — a plan where they have to do both to really make the sweet money. And that means linked components.

Linkages can be as severe as…

No over-goal payout until $xx in lending products are sold, or

Reduced commission rates on both until both reach some threshold.

Linkages can also be as gentle as

Hold back 10% of core commission until a threshold level of lending product is sold (something like 75% of goal), or

Add 10% additional to core commission once lending products are at or above goal, or

Both of the above.