2025: 13 steps to reviewing your sales commission plan. Access tips from experts in top companies.
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1. Alignment with corporate strategy
"There is no magic formula for building a good commission plan. On the other hand, there are some key principles to bear in mind, the first of which is alignment with the sales rep strategy."
Aude Cadiot, Revenue Operations Lead at Spendesk
The first fundamental principle in redefining a sales commission plan is its alignment with the company's overall strategy. A good remuneration system can only be effective if it directly supports strategic objectives. Whether the company is looking to increase growth, improve profitability, build customer loyalty or conquer new markets, these priorities must be clearly reflected in the structure of the remuneration plan.
a. Defining the company's new priorities
A company's priorities can change rapidly as a result of the economic context, new opportunities or challenges encountered.
It is therefore essential to identify precisely what the company's new ambitions are. Is it looking to increase sales in the short term? Is the priority to build customer loyalty in order to reduce churn and ensure more stable growth? Or is it looking to expand into new markets, requiring new investment and a particular focus on longer sales cycles?
For example, a company focusing on opening up new markets could adjust its remuneration plan to offer specific incentives to sales reps who successfully penetrate uncovered regions or sectors.
Figures to remember
According to a Primeum study, 67% of companies undergoing geographical expansion are increasing their sales reps' commissions to encourage them to conquer new territories.
On the other hand, a company that aims to build customer loyalty can put in place a sales commissions plan that values customer retention time. Instead of rewarding new sales alone, the plan could include bonuses based on customer satisfaction and the renewal of long-term contracts, as Hubspot does with its clawback clause. This type of model encourages sales reps to focus on quality sales that last over time.
To find out more
Read our article "Clawback: How it works, examples and best practice", and find out about the various existing calculation methods and expert advice and best practice.
b. Translate strategic objectives into the structure of sales commissions
Once the priorities have been clearly defined, the question arises as to how they can be translated into the structure of commissions. Each strategic objective requires a different approach.
If the company is focused on rapid sales growth, an uncapped sales commissions approach may be appropriate to motivate sales reps to exceed their targets.
"De-capping pay is a powerful productivity driver, because sales reps never stop performing once they've achieved their targets."
Vladimir Ionesco, Director of Global Sales Performance at Doctolib
Figures to remember
74% of sales reps with uncapped pay achieve their targets, compared with just 37% of sales reps with capped pay, according to a study by Qobra.
As part of a loyalty strategy, remuneration can be indexed to qualitative criteria such as customer satisfaction, NPS (Net Promoter Score) or customer retention time. This encourages sales reps to focus on long-term relationships rather than quick but ephemeral sales. Salesforce has incorporated customer satisfaction criteria into its bonuses to ensure that its sales reps focus not only on sales, but also on service quality.
In conclusion, the success of a sales commission plan depends on its alignment with corporate strategy. It is essential that each sales rep understands how their remuneration is linked to strategic priorities, so that they can adapt their efforts accordingly. It is best practice to review sales reps' objectives annually and adjust the remuneration plan in line with new priorities.
2. Setting clear, measurable objectives
a. Define key KPIs for the sales commission plan
One of the first imperatives for structuring an effective sales commission plan is to define appropriate Key Performance Indicators (KPIs).
KPIs are the central elements that guide the efforts of employees, particularly in sales reps, to achieve the company's strategic objectives.
It is therefore essential to choose indicators that are simple, transparent and directly linked to the missions of the teams concerned.
"When it comes to selecting the indicators for determining commissions, you really have to focus on simplicity and clarity. Otherwise, employees don't know what to focus on to achieve their objectives."
Aude Cadiot, Revenue Operations Lead at Spendesk
Here are some examples of KPIs often used in commission plans:
Sales figures
This KPI is essential for sales reps. It enables the performance of sales reps to be measured directly in relation to sales achieved.
Margin
For some companies, the focus is on sales profitability, making margin a key indicator. This encourages sales reps to maximize the value of transactions rather than offering discounts to close sales quickly.
Customer satisfaction
A qualitative KPI that measures customer loyalty, in particular through tools such as the Net Promoter Score (NPS). Nearly 62% of companies include qualitative criteria such as this in their remuneration plans.
Retention and loyalty
One of the key levers for ensuring the long-term viability of the sales rep business, particularly for Customer Success Managers (CSMs), is the retention of existing customers. Indicators such as the retention rate or Customer Lifetime Value (CLV) are relevant here.
Development of cross-selling and up-selling
The addition of KPIs measuring the sale of additional services or products encourages teams to maximize revenue per customer, particularly for Account Managers (AMs) and CSMs.
Each role within the sales reps must therefore be associated with appropriate KPIs, enabling both individual performance and overall progress towards the company's strategic objectives to be monitored.
To find out more
Read our article "Sales commissions: examples of KPIs", and discover the best quantitative and qualitative KPIs for assessing the performance of Sales, SDRs and CSMs.
b. The importance of realistic but ambitious targets
Setting realistic but ambitious targets is a key factor in the effectiveness of a sales commission plan.
The aim is to strike a balance between the incentive to excel and the feasibility of the targets, in order to avoid demotivation. If targets are unattainable, this can quickly demotivate employees and lead to a drop in productivity.
To define appropriate targets, it is crucial to take into account both the company's internal capabilities and market conditions. A common approach is to rely on historical data, adjusting targets according to anticipated growth or new challenges. For example, an Account Executive could be assessed on the basis of monthly or quarterly sales growth based on realistic forecasts, but high enough to warrant effort.
Finally, the success of a sales commission plan depends on its ability to set ambitious targets, while taking account of the realities of the market and internal skills, in order to stimulate collective performance while motivating each employee individually.
3. Identification of sales reps to be encouraged
A sales commission plan should not only reward immediate financial results, but also sales reps that support the company's long-term strategy.
Indeed, it is essential to ensure that the actions and attitudes encouraged by the plan are in line with the organization's overall strategic objectives. For example, behaviors such as consultative selling, customer loyalty and a long-term approach can have a more lasting and significant impact than one-off sales.
a. What actions and attitudes should the new sales commission plan promote?
Consultative and relationship selling
Companies are moving towards more sophisticated sales reps, focusing on creating value for customers rather than simply selling products or services. Consultative selling, which involves understanding the customer's deepest needs and responding to them with personalized solutions, is increasingly valued. Such behavior can be encouraged by rewarding sales reps not only on the basis of sales generated, but also on the quality of the solutions proposed and customer feedback on the relevance of recommendations.
Figures to remember
20% higher success rate, according to a study by CSO Insights, for sales reps who adopt a consultative approach than those who focus solely on transactional selling.
Long-term approach and building customer loyalty
In an increasingly competitive environment, retaining an existing customer costs up to five times less than acquiring a new one. This figure, often quoted in the business world, underlines the importance of putting in place practices that encourage retention. An effective sales commission plan should therefore encourage sales reps to develop a relationship of trust with customers, by focusing on repeat business or long-term additional sales.
To reward this behavior, KPIs such as the retention rate or Customer Lifetime Value (CLV) can be integrated into the remuneration criteria, to reward sales reps for each contract renewal or increase in customer value.
Cross-team collaboration
Increasingly, companies are adopting collaborative sales strategies where sales, marketing and customer service teams work together to ensure a seamless customer experience. Encouraging collaborative behavior as part of the sales commission plan ensures that teams are not only focused on their own individual objectives, but also contribute to the collective success.
For example, common indicators between sales and marketing teams, such as the conversion rate of qualified leads, can be used to motivate close collaboration between these departments.
b. Consistency between financial rewards and expected behaviors
It is essential to align financial rewards with the behaviors the company wishes to promote. If companies focus solely on acquiring new customers, they risk missing out on customer retention, customer satisfaction or long-term sales growth. To avoid this, it is imperative to structure remuneration in such a way as to balance the incentive to acquire new customers with that of a quality after-sales service and a long-term customer relationship.
Reward loyalty more than acquisition
A relevant example is SaaS companies, where customer retention is often more crucial than initial acquisition. This underlines the importance of calibrating remuneration plans to reward more substantial behaviors that promote customer retention and satisfaction. A system where sales reps earn higher commissions on contract renewals and additional sales could better embody these values.
Enhancing customer satisfaction and service quality
Customer satisfaction is a key indicator of the quality of the relationship that sales reps have with their customers. However, it is often neglected in favor of short-term results such as sales. To compensate for this imbalance, some companies include qualitative indicators such as Net Promoter Score (NPS) or recommendation rates in their remuneration systems.
Figures to remember
According to a study by People Base CBM, 62% of companies use qualitative criteria such as customer satisfaction when remunerating their teams. This type of metric encourages sales reps to adopt service-oriented behavior, which not only strengthens customer loyalty but also the company's brand image.
Encourage the sale of value, not volume
Another bias to be avoided is the exclusive valuation of sales volume. If a remuneration scheme only promotes the quantity of sales closed, this can encourage aggressive sales practices or excessive discounts, to the detriment of margin and profitability. A better approach is to encourage sales reps to sell high value-added solutions, by linking bonuses to the margin or profitability of contracts, rather than to turnover alone.
In short, a coherent and effective commission pay plan must align financial incentives with expected behavior, while ensuring that each sales rep contributes not only to achieving immediate sales targets, but also to creating sustainable value for the company.
