Sales Incentive Compensation Plans: Design Patterns

Sales Incentive Compensation Plans

Table of Contents

Common incentive structures

  • Accelerators: higher variable above 100% quota
  • SPIFs: spot bonuses for specific outcomes
  • MBOs: management by objectives bonuses
  • Multi-year deal bonuses
  • Logo bonuses for new business

Designing effective incentives

  • Tied to specific business goals
  • Time-bound
  • Measurable
  • Communicated clearly to reps

Common mistakes

  • Too many overlapping incentives
  • Incentives that conflict with each other
  • SPIFs that train wrong behaviors
  • No clear sunset on incentive programs

Frequently asked questions

What's a sales incentive compensation plan?

Variable pay structures added on top of base commission: accelerators, SPIFs, MBOs, multi-year deal bonuses, logo bonuses.

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