What’s a bluebird sales deal, and how do I pay for it?
Your sales compensation plan is all set up, you have balanced a plan that is attainable yet challenging. It’s lucrative for the reps and profitable for the company. It has some accelerators, it encourages consistency; it’s your magnum opus. And then the unthinkable happens: one of your middle-of-the-road reps closes a bluebird sales deal.
Wait, this is an article about sales compensation, not birdwatching. What do you mean, a bluebird deal?
What is a bluebird in sales? A bluebird is a deal that is substantially larger than your average deal or one that closes much quicker than your standard deal. Many organizations consider a bluebird deal as one opportunity when the contract value is greater than a rep’s quota.
What do you do? Your first instinct might be to panic. You have never written a commission check this big in your entire sales career! What happens if this bluebird deal isn’t all it’s cracked up to be? Where is that large automobile? Wait, no, that’s Talking Heads. Anyway, here’s what you should do.
Step 3: Modify commission payment terms if needed
There is one nuance to bluebird deals: timing of commission payouts. If you normally pay your reps after the customer has been fully onboarded, then this probably won’t be an issue for you. However, if you’re like most companies and don’t wait until onboarding is complete, it can get a little more complicated. Essentially, you don’t want to pay out on this bluebird sales deal only for the deal to evaporate. Then you’d be stuck trying to clawback a gigantic commission check, or worse your rep quits and you have to kiss that commission check goodbye.
So, explain the extenuating circumstances to your rep. Consider giving them a portion of the commission at the typical cadence and pay the rest out on a set schedule. If you typically pay out after the deal is closed, you pay out 25% of the commission on the next pay period and the other 75% once the customer has paid their invoice. Or, if you usually pay commissions after the first month’s invoice is paid, pay out equal installments over the first 3 invoices.
Also, if you are looking to calculate commission on this bluebird deal – or any deal for that matter – you should be using QuotaPath. QuotaPath is a tool designed to help automate the commission tracking process for you, your finance team, and (maybe most importantly) your sales reps.