Determining the variable remuneration of a salesperson is a crucial process for any company that wants to maximize its performance. This type of remuneration plays a central role in motivating teams, by aligning their efforts with the company's strategic goals. However, the balance is delicate: poorly calibrated remuneration can either demotivate your teams or weigh heavily on the company's finances. In this article, we offer you a complete guide to establishing effective variable remuneration, taking into account the specificities of your market, the profiles of your salespeople and the objectives of your business.

Learn how to optimize your compensation strategy to get the most out of your sales force.

The basic criteria for establishing variable remuneration for a salesperson

Defining variable remuneration for a relevant salesperson involves taking into account several fundamental factors. These elements ensure that compensation is not only fair, but also capable of stimulating team performance while being aligned with overall business goals.

Understand the business goals of the company

The first step in defining variable compensation for a salesperson is to fully understand the goals of your business. These should be Clear, precise and above all measurable. Objectives may vary depending on the sector, business strategy, or business maturity.

For example, a rapidly growing business may prioritize acquiring new customers, while a mature business might focus on retaining existing customers and increasing average deal value.

Common goals used to determine variable compensation for a salesperson include:

• The turnover generated : one of the most traditional objectives, often used for salespeople in charge of direct sales;
• The number of new customers : relevant for salespeople in charge of commercial development or the launch of new offers;
• The profit margin : this criterion makes it possible to align the interests of the salesperson with those of the company by valuing not only sales, but also their profitability;
• The loyalty rate : a key objective for positions focused on account management or customer service, aimed at strengthening relationships with existing customers.

These goals should not only be realistic, but also ambitious enough to push salespeople to give their best. By setting well-calibrated goals, you ensure that variable compensation motivates the right actions and leads to tangible results for the company.

Analyzing the market and the competition

Once the objectives have been defined, it is essential to locate your variable compensation offer in relation to the market. To do this, it is recommended to conduct a thorough study of salary practices in your sector. This analysis must take into account several elements:

• Salary grids : comparing base salaries and commission rates charged by your competitors will allow you to position your offer in an attractive way;
• Compensation models : some sectors favor more innovative compensation models, such as incentive plans or bonuses based on qualitative objectives. It can be useful to be inspired by it to offer remuneration that is more in line with the expectations of salespeople;
• Market trends : analyzing current trends can help you anticipate salespeople's expectations and adjust your offer accordingly. For example, more and more companies are integrating compensation elements linked to sustainable development or diversity.

By aligning yourself with market practices while innovating in your approach, you will be able to attract the best talent while optimizing the motivation of your existing teams.

Take into account the profile of salespeople

Customizing the variable remuneration of a salesperson is another crucial aspect to maximize their effectiveness. Indeed, not all employees have the same skills, the same experience or the same ambitions. Thus, it is important to adapt the remuneration according to the profile of each salesperson. To do this, several criteria must be taken into account:

• The experience : an experienced salesperson often has a higher level of remuneration, due to their knowledge of the market, their network and their ability to manage complex accounts. On the other hand, a novice salesperson may be more motivated by the prospects for rapid growth and high bonuses;
• Specialization : in some sectors, specific expertise (for example, in new technologies or health) may justify higher variable remuneration. This specialization can be enhanced by specific incentives linked to product development goals or the penetration of new markets;
• Past performances : finally, it is a good idea to take into account the past performance of salespeople to adjust their variable remuneration. Sales representatives who have consistently exceeded their goals deserve specific recognition, which may take the form of additional bonuses or a more favourable commission rate.

By personalizing compensation, you demonstrate to your salespeople that their individual efforts are recognized, which reinforces their commitment and motivation.

The types of variable remuneration for salespeople

There are many variable compensation models for a salesperson, which can be adapted to the specific needs of your business. Each of these models has distinct advantages and can be used to encourage different types of behavior among your salespeople.

Sales commissioning

Commissioning is probably the most common model in the sales world. It is simple to understand and to set up: the salesperson receives a Percentage of each sale he makes.

However, this pure action can also have disadvantages. It can encourage salespeople to focus on the quantity of sales at the expense of their quality, which can affect customer satisfaction in the long run. In addition, in some industries with long sales cycles, this model may be less appropriate because it does not encourage long-term efforts.

The bonus on goals

The objective bonus is another type of variable remuneration that offers greater flexibility. Unlike commissioning, the bonus is not directly linked to each sale, but to the achievement of certain predefined goals. These objectives can be varied in nature:

• Quantitative goals : for example, reaching a certain turnover or a number of new customers over a given period of time;
• Qualitative goals : such as improving customer satisfaction rates, developing new skills or contributing to strategic projects.

This model is particularly effective for businesses that want to encourage specific behaviors or long-term results. It also rewards salespeople for their efforts that do not immediately translate into sales, such as prospecting or developing solid customer relationships.

Internal challenges and competitions

Les commercial challenges and internal competitions are powerful tools to boost your sales teams. They can be used in addition to other forms of variable compensation to introduce an element of healthy competition within the team. Here are a few examples:

• Monthly contests : each month, the salesperson with the best performance can receive a special bonus or a gift;
• Quarterly challenges : sales teams can be divided into groups that compete on a specific objective, such as the number of contracts signed or the total amount of sales made;
• Business challenges : these challenges can be designed around specific objectives, such as promoting a new product or achieving a certain turnover over a given period of time.

These initiatives create a stimulating work environment, where each salesperson is encouraged to go above and beyond for additional rewards. They also promote team spirit and collaboration, as salespeople often have to work together to win a collective challenge.

Non-financial benefits

Although the variable remuneration of a salesperson is mainly composed of bonuses and commissions, it is important not to overlook non-financial benefits. These benefits can play a crucial role in retaining and motivating salespeople. Some examples of non-financial benefits include:

• Professional training ;
• Public recognition ;
• Incentives.

These non-financial benefits, while less tangible than monetary bonuses, can have a significant impact on sales motivation and satisfaction. By combining them with well-designed variable compensation, you can create a work environment that stimulates both performance and loyalty.

So you will have understood it, the Variable remuneration for a salesperson is a powerful tool for aligning your teams' efforts with business goals. By setting clear goals, based on in-depth market analysis, and customizing compensation models based on the profiles of your salespeople, you can create a system that is both fair and motivating.