Question
I have created a few sales comps plans but I am working with a company that has a very high margin product that has a payback of 5 years. I am thinking i do a 15, 10, 5, 5, 5 in commissions for the 5 year period for sales.... are there things I should know before committing to this type of plan... what is fair for a sales management override?
Answer
I think you are making it far too complicated. I would target 1st year payment only. I also wouldn't pay a percentage of sales, I would make it target based e.g. If you want the rep to sell $1M a year in ARR you give them a target of $1M and pay a percentage against achievement. This breaks the direct correlation to deal value and instead focuses them on achieving a set outcome.
