Incentive

Commissions, goal-based bonuses, or both?

Learn about the benefits and differences between commissions and goal-based bonuses. Find the best approach to motivate your team!

Temps de lecture : 
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Commercial remuneration obviously rhymes with variable, but what is the variable best suited to your business?

As we explained to you in a previous article, remuneration is not an exclusive factor in motivating people to work.
This is certainly an important element, but it can prove to be responsible for demotivation. It is therefore important to choose the right remuneration system, whether to motivate your sales representatives as well as to increase growth and achieve good objectives.Commercial remuneration obviously rhymes with variable, but what is the variable best suited to your business?

The commission to push the sale:

Commissions and especially uncapped commissions are a tradition in the sales world. But what is a commission really? It is a gain calculated on the margin or turnover using a percentage and which is triggered as soon as the first euro sold.
It is interesting in relatively short sales cycles or when salespeople are completely autonomous in their processes. The commission can really have an impact on the salary of salespeople and this is seen as a real asset, especially for long-term salespeople.

The objective bonus to reward performance:

The lens bonus is more qualitative because it motivates salespeople to constantly go above and beyond to reach it. It rewards effort and excellence. Instead of focusing on the evolution of turnover, it focuses on performance. It is more often found during a fairly long, technical or random sales cycle. It's best suited when salespeople have to work as a team, with other areas of the business, to close sales. The problem with these bonuses is setting the goal.
Setting clear goals for your salespeople is a source of motivation. It is very important to personalize these goals according to each person's skills. Unfortunately, the disadvantage is that salespeople may try not to reveal themselves completely, in order to have weak goals and achieve them more simply.

Both:

It is also possible to reward your salespeople with the two previous variables.Set up a system that maintains the effort and exceeds them by not commissioning from the first euro earned but by setting a minimum of sales to be achieved.
Sales representatives may receive a capped monthly commission, calculated on turnover. In addition, bonuses based on objectives, quarterly or semi-annual, calculated on the success of Challenge.

To conclude, we advise you to study the functioning of your business and your market to make the right choice.Motivating and rewarding your salespeople does not only depend on money. You must try to combine these factors with others that are less exhaustive but just as motivating. So what means will you use?

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