Explore the latest review of the best revenue operations and intelligence software providers for commissions.

Criteria for Comparing Revenue Operations Software Providers

Consider the following criteria when selecting Revenue Operations and Intelligence commission automation software tools.

Commission Management Features

• Commission Structure Configuration: Can the software handle complex commission structures with tiers, bonuses, and territory rules?
• Adaptability: How does the platform support changes as your team scales?
• Automated Commission Calculations: Does the software automate commission calculations based on pre-defined rules and sales data?
• Real-Time Commission Tracking: Can salespeople track their commission potential and progress in real time?
• Reporting and Analytics: Does the platform offer reports and analytics on commission payouts, team performance, and quota attainment?
• Integration with CRM & Payroll Systems: Does the software seamlessly integrate with your existing CRM and payroll systems, streamlining data flow?

Revenue Operations Integration

• Data Integration: Can the software integrate with other RO&I tools like forecasting, pipeline management, and deal tracking solutions?
• Unified Sales Performance Management: Does the platform offer a unified view of sales performance, combining commission data with other key metrics?
• Improved Sales Visibility: Does the solution enhance sales leadership’s visibility into team performance and commission payouts for informed decision-making?
• Workflow Automation: Can the software automate tasks related to commission calculations and approvals, improving efficiency?     
• Scalability for Growth: Is the solution scalable to accommodate your growing sales team and evolving commission structures?

Additional Considerations

• Ease of Use: How user-friendly is the commission software for both salespeople and sales management?
• Security and Compliance: Does the platform meet your security and data compliance requirements?
• Customer Support: What level of customer support does the software provider offer for implementation, training, and ongoing issues?
• Pricing Model: Does the software offer transparent pricing that aligns with your budget and sales team size?   
• Free Trial or Demo Availability: Does the provider offer a free trial or demo to allow you to test the software’s capabilities before committing?

Next, let’s compare each vendor based on the above considerations.

QuotaPath

Capterra 4.5 / G2 4.7 / TrustRadius 8.6

QuotaPath’s commission tracking and sales compensation management software creates ownership and accountability across RevOps, Finance, and Sales while managing and tracking variable pay. Described by customers as “easy to set up and use,” QuotaPath’s smart UX ensures admins can quickly adjust sales comp as business needs change. This also empowers reps to reference deals for commission, forecast potential earnings, and see quota attainment progress, motivating them to close that next deal.

Fit for sales compensation plans of all complexities and companies of all sizes, QuotaPath has no minimum user requirements.

Commission Features (reporting, modeling, and testing)

QuotaPath’s compensation reporting and modeling tools enable leaders to measure and model the business value and performance of their revenue teams’ comp plans.

See real-time attainment health, identify performance anomalies, and predict new plan costs in one place to optimize your team’s success and gain confidence in your compensation structures.

Custom reporting provides analytics and insights that facilitate data-driven decisions while plan performance modeling simplifies sales optimization to improve outcomes.

Integrations

QuotaPath’s self-serve integrations enable you to add and edit technology connections essential to your commission process, including data warehouses, spreadsheets, business intelligence, and payment and ERP systems.

For instance, CRM integration can be established with platforms like HubSpot and Salesforce as well as data sources such as Excel, Google Sheets, Stripe, and Chargebee.

Onboarding and Ease of Use

QuotaPath is known for fast and easy onboarding plus ease of use. Implementation timeframe estimates are listed on QuotaPath’s website along with transparent pricing.

Reviewers on sites like G2 stated that “Deployment was so easy that I was able to get around 99% complete with minimal support. The integration with Salesforce is extremely easy to understand and complete we were up and running within just a couple of hours of work from myself.” And, another reviewer stated, “The product team has made onboarding simple.”

Plus, “The ease of use of the platform is excellent…Their customer support is top-notch. I know I will always get my questions answered. They also have great resources available to help guide our comp strategy and decision making.”

Workflow Automation

QuotaPath’s workflow automation tools facilitate incentive payment calculations on multi-year deals, renewals, demos, specific products, and users. Sales commission automation in QuotaPath tags sales reps involved in each sale, tracks commission earnings, provides transparent sales commission reporting to sales reps and allows them to forecast their future earnings.

Additional QuotaPath automation tools include in-app compensation question and dispute resolution, deal approval, scheduled payments, and payout eligibility rules. And commissions amortization, pipeline and earnings forecasts, real-time attainment and effectiveness rates, and team leaderboards.

Support

QuotaPath’s support staff consists of Customer Success and Account Management agents available to guide implementation and provide best practices at key milestones. Live chat, an in-depth knowledge center, and monthly training webinars are available as part of QuotaPath’s highly-rated customer support model that continues throughout the customer’s entire engagement.

Help designing commission structures for a new team or compensation plan is easily accessible through QuotaPath’s ungated resource Compensation Hub, featuring a library of adjustable sales compensation plan examples.

Reviewers on sites like Capterra, G2, and TrustRadius reported, “When I needed customer support, their chat feature within the application with one of their reps was incredibly helpful.”

Pricing Model & Free Trial

QuotaPath lists transparent tiered pricing for a range of business sizes from startup to enterprise on its website, clearly stating what is included. Plus, QuotaPath offers a 14-day free trial is available enabling organizations to try the platform before becoming a customer with no credit card required.

Spiff

Capterra 4.7 / G2 4.7 / TrustRadius 8.8

Spiff commission software enables finance and sales operations teams to self-manage complex incentive compensation plans with ease. The Spiff platform is designed to build trust across organizations, motivate sales teams, increase visibility into performance and earnings, and ultimately drive top-line growth.

Commission Features (reporting, modeling, and testing)

Spiff enables organizations to generate custom reports incorporating metrics imported from business intelligence platforms or to use pre-configured reports, then visualize them on dashboards. These analytics and insights support data-driven decisions for modeling effective comp plans. The Spiff platform also allows the testing of new compensation plans against historical performance data confirming they won’t break the budget.

Integrations

Spiff offers CRM integration options as well as ERP, payroll, HCM, and other systems for real-time updates. Integration options include Salesforce, HubSpot, and Excel.

Onboarding and Ease of Use

Although most reviewers felt that Spiff was easy to use, some reported that “the initial setup and configuration are complex.” Another reviewer stated that “Improving the onboarding experience with more comprehensive tutorials or dedicated support resources could help alleviate this challenge and ensure a smoother transition for new users.”

Workflow Automation

Spiff streamlines workflows and automates complex commission structures. They offer real-time visibility for sales teams to drive performance. Spiff facilitates in-app compensation questions and dispute resolution communication and collaboration. Approval workflow automations and prescheduled reports are also possible with Spiff.

Support

According to Spiff’s website, there are additional fees for anything beyond basic support.

Spiff’s support received mixed reviews on review sites. Reviewers were either very happy with the customer support they received or reported that it was slow, with one reviewer reporting “they took over two weeks to attend to my ticket.”

Pricing Model & Free Trial

There is no pricing model or rates posted on Spiff’s website. Our research revealed that they offer a one-size-fits-all rate plan and no free trial.

Everstage

Capterra 4.9 / G2 4.8 / TrustRadius 9.4

Everstage is a Sales Commission Software that helps drive business outcomes and profitable growth through incentives and streamlined commission administration.

Commission Features (reporting, modeling, and testing)

Everstage’s commission features include standard and custom reporting to inform data-driven decisions. The Everstage platform allows organizations to model commission plans before publishing them using historical performance data. Then it enables potential comp plan testing to ensure they meet budgetary requirements.

Integrations

Everstage offers accounting, database, HR platform, and CRM integration options including Salesforce, HubSpot, Quickbooks, and Chargebee.

Some reviewers cited that “sometimes the data gets outdated and stuck, especially at the end of the month and the data sync with Salesforce and Everstage gets delayed.”

Onboarding and Ease of Use

Everstage is user-friendly and easy to set up and implement according to reviewers.

Workflow Automation

Everstage provides sales teams with real-time visibility of their quota attainment and earnings through reporting, forecasting, and leaderboards to motivate results. Reporting streamlines performance tracking by delivering analytics and insights for sales optimization. Everstage also automates commission calculations, approvals, user management, and compensation query and dispute resolution.

Support

According to the Everstage website, support includes a dedicated implementation team and 24×5 multi-channel support. No negative reviews were found concerning Everstage’s support.

Pricing Model & Free Trial

No fee structure or pricing was found on the Everstage website and there is no free trial offered.

Palette

Capterra no reviews / G2 4.9 / TrustRadius no reviews

Palette automates sales commissions, preventing errors, and provides sales teams with real-time visibility into commission accruals and payouts. Built to handle even the most complex commission plans, Palette enables businesses to trigger commission payouts based on customer payments and product usage thresholds.

Commission Features (reporting, modeling, and testing)

Palette offers reporting to inform data-driven decisions for sales optimization and compensation modeling. The platform enables testing of compensation plans to visualize their potential impact on cash flow and business objectives.

Integrations

Palette offers Billing, Database, and CRM integration options including Salesforce, HubSpot, QuickBooks, Chargebee, Google Sheets, and Excel.

Onboarding and Ease of Use

Reviewers report that Palette is easy to use and to implement.

Workflow Automation

Palette provides sales teams with real-time access for sales teams to personalized performance dashboards. The platform automates commission calculation and payouts, and generates monthly commission statements for team members. Palette also facilitates in-app dispute resolution, approval routing, and performance monitoring.

Support

Support includes initial training on how to effectively use the Palette application and training on new features as they are introduced. A limit of 3 one-hour admin training workshops per year is offered to onboard new Admins.  After initial onboarding, fee-based support for Professional Services is required for support such as training new users and assistance with comp plan creation.

Pricing Model & Free Trial

Palette offers a tiered subscription model based on business size. No pricing is published on their website and there is no free trial.

Qobra

Capterra 4.8 / G2 4.7 / TrustRadius no reviews

Qobra automates commission calculation, validation, and sharing while reducing errors and increasing sales motivation with real-time visibility to improve sales performance.

Commission Features (reporting, modeling, and testing)

Qobra enables reporting to help with data-driven decisions for compensation modeling and allows the performance of plan simulations and tests in a sandbox environment on the platform.

Integrations

Qobra offers data warehouse, financial, HR, and CRM integration options including Salesforce and HubSpot.

Onboarding and Ease of Use

Although there are a limited number of reviews on review sites, there are currently no negative reviews about setup and onboarding and a few reviewers mentioned that Qobra is easy to use.

Workflow Automation

Qobra offers sales teams real-time visibility to quota attainment through dashboards. The platform automates commission calculations, approvals, and dispute resolution.

Support

We couldn’t find any details concerning support services on Qobra’s site. However, reviewers reported positive and timely support experiences.

Pricing Model & Free Trial

No pricing model, rates, or free trial is offered on Qobra’s website.

Top Revenue Operations and Intelligence Commission Software

As we compare Revenue Operations and Intelligence commission automation software tools, all brands have similarities. However, QuotaPath offers the greatest flexibility and is the most adaptable commission system for businesses ranging in size from startup to enterprise as they scale.To learn more schedule time with a QuotaPath team member or start a free trial today.

RevOps tools FAQs

What is revenue operations software?

Revenue operations (RevOps) software is a platform that aligns sales, marketing, and customer success teams by streamlining processes, data, and analytics to drive predictable revenue growth. It helps organizations automate workflows, track key metrics, and improve forecasting by integrating with CRMs, commission tracking tools, and financial systems. By centralizing revenue data and optimizing operations, RevOps software enhances efficiency, eliminates silos, and ensures teams work toward shared business goals.

How does rev ops software fit into my sales/marketing tech stack?

RevOps software acts as the central hub that connects and optimizes your sales and marketing tech stack. It integrates with CRMs (like Salesforce and HubSpot), commission tracking tools (like QuotaPath), marketing automation platforms (like Marketo), and financial systems to ensure accurate data flow and streamlined processes. By automating reporting, pipeline forecasting, and compensation tracking, it eliminates silos between sales, marketing, and finance, ensuring that all teams work toward shared revenue goals. With RevOps software, companies gain better visibility, improved efficiency, and data-driven decision-making across their entire go-to-market strategy.

What should I look for in a rev ops solution?

When choosing a RevOps solution, look for seamless integrations with your existing CRM, commission tracking, and financial systems to ensure smooth data flow. Prioritize automation features for reporting, forecasting, and compensation management to reduce manual work and improve accuracy. Finally, choose a platform with clear visibility into pipeline performance and revenue metrics so sales, marketing, and finance teams can align on shared goals.

What is the best rev ops software?

The best RevOps software depends on your needs, but top options include QuotaPath for commission tracking, Clari for forecasting, and Salesforce Revenue Cloud for revenue management. The ideal platform integrates with your CRM, automates key processes, and provides clear revenue visibility. Choose a solution that scales with your business and aligns sales, marketing, and finance teams.

The best way to ensure smooth pipeline management is to know exactly how to optimize it.

That means understanding every last step closely so you always know how to approach and respond to people at all stages of your sales funnel, including separating sales suspects from prospects.

This guest blog from Databricks walks you through the main ways to differentiate between the two after covering why it’s so important to do so in the first place. First, however, we’ll show you what both sales suspects and prospects are so the difference becomes clearer.

What is a sales suspect?

Your sales pipeline often begins with strangers who have never heard of your company and might not have even considered buying the types of products you sell. You’ll pick out the most promising group to eventually become customers from these people.

Sales suspects, or leads, are the ones that fall into this more promising group.

A sales suspect is someone who might, at some point, be interested in your products. For example, if you’re a retailer selling swimwear, you might include holidaymakers in your list of leads.

Incorporating recognizable business names into your marketing strategies, possibly in the form of co-marketing campaigns, can also attract attention from these suspects, as recognizable brands often inspire trust and curiosity.

However, it’s important to avoid common website design mistakes that confuse or deter these sales suspects, such as poor navigation or slow load times, ensuring a smooth transition from initial interest to actual engagement.

The key here is that your sales suspects have indicated some passing interest–but no more than that.

If they’ve subscribed to your email list but haven’t followed up on any of your email promotions or offers, they count as sales suspects. And that’s going to be a lot of your email list subscribers because most companies see very low email open rates:

Characteristics of sales suspects

Typically, a sales suspect will be a member of one of your target demographics. For example, if you’re a software developer providing tech-based solutions to customers, a sales suspect might be interested in different machine learning model types and their uses.

A sales suspect needs further targeting to become a customer or even a sales prospect (more on this shortly). Someone who has already put a few items in their shopping cart and has progressed to the checkout stage is no longer a sales suspect.

At the same time, sales suspects can’t be completely uninterested. If you sell furniture to homeowners, a student living in rented accommodation that comes pre-furnished is highly unlikely to be a serious buyer at any point, so they won’t be a sales suspect.

When (and How) to Shorten Sales Cycles

Explore when it’s appropriate to incentivize shorter sales cycles (and when not).

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What is a sales prospect?

If a sales suspect is someone who might be interested in your products, a sales prospect is actively interested.

Sales prospects represent the next stage in your sales pipeline after suspects. They have a genuine interest in your products, and alongside this, they’re likely to want to make a purchase.

Knowing how to identify a sales prospect can shorten sales cycles. This group of prospects contains all the people who will eventually become your customers. So, by targeting them more specifically, you can make more sales and identify your buying customers more easily.

Characteristics of sales prospects

A sales prospect has to have demonstrated clear interest–something more concrete than simply following you on social media, for example.

They might do this by filling up their cart but not quite making a purchase yet. They could also repeatedly click on a specific product and spend time on its dedicated page. Both of these examples involve a sales suspect going above the level of casual interest that comes with the ‘suspect’ label and heading into ‘prospect’ territory.

Prospects are also part of your target demographics. More specifically, they’re likely to belong to two or more target groups, which helps ensure your product is tailored to their wants and needs.

Why differentiate between sales suspect vs prospect?

We’ve alluded to the importance of separating sales suspects vs prospects since this distinction helps you optimize your pipeline management.

But how?

Below are some of the main reasons why it’s such a good idea to draw a line between your sales suspects and prospects actively. They are presented in no particular order.

Proper targeting

A major aspect of pipeline management is knowing exactly how to target leads at different stages of the funnel. Getting this just right means interacting comfortably with potential customers every time, improving relationships, and fostering a positive brand image.

Implementing standardized SOPs or work instructions helps ensure that these interactions are consistently effective and align with overall sales strategies.

Proper targeting is much easier when you know your target group. By effectively differentiating between sales suspects and prospects, you can tailor your approach to each group’s needs and preferences, leading to higher customer retention rates and a more positive brand image.

Sales suspects need content that will help get them engaged and interested. Giving them promotional codes won’t be helpful, as they’re still unsure whether they even want your products in the first place. What they need is information.

On the other hand, sales prospects need that last bit of incentive to encourage them to make the purchase. Promotions do help here, while information won’t be very helpful, as they already know they’re interested in your products.

An online business coach can provide personalized guidance and strategies to improve sales teams’ targeting and engagement with these groups, ultimately enhancing pipeline efficiency and effectiveness.

Improved efficiency

When everyone in your sales department understands exactly how to approach every potential new customer, they’ll become more productive. This makes both commission management and pipeline optimization much easier.

The end result is a more efficient sales process and sales personnel spending all their time in the best possible way.

It also means turning more sales suspects into prospects, which in turn helps drive up total conversions. When you can convert more leads into buyers, you can directly improve your bottom line, which helps everyone in the company.

Making use of the data

If you know the answer to questions like what is Apache Hive used for, you probably know that it’s important to collect lots of data on your customers.

But that data is only useful when you’re making the most of it. Otherwise, it’s just information that sits there doing nothing.

Instead, you should use the data you have on customers to map and understand their behavior. Incorporating KYC (Know Your Customer) practices, such as verifying customer identity through official documentation, conducting background checks, and maintaining continuous data validation, helps ensure that the data collected is accurate and deeply informative, allowing more tailored and effective customer interactions. 

This will help you determine whether they’re a prospect or suspect, informing your approach so you’re always taking advantage of the resources at your disposal. 

7 ways to separate sales prospects and suspects

Next, we’ll share how you can separate sales prospects from suspects. These will help you determine which type of lead you’re dealing with and how to proceed so you can get the most out of every interaction with them.

1. Purchase intent

When you gather data on your customers, you can learn all about what their actions mean. That means you can gauge what they’re planning to do and whether they’re planning to become a customer based on the information you collect.

In other words, you can separate your sales prospects from suspects using data on purchase intent.

Monitoring purchase intent also lets you notice when someone starts to show signs of graduating from a sales suspect to a true prospect. That way, you can flexibly adjust your strategy and approach so you’re always ready with the right materials at the right time.

2. Tailored offers

Sending specifically personalized offers to a sales suspect vs. a prospect will yield different results, just as both groups call for different types of personalization.

Where a suspect will likely be interested in offers that let them sample just a little bit of your merchandise, such as ‘tasters’ or smaller versions of products, a prospect will often be after discounts. The prospect already wanted to buy, so a discount can be an incentive.

Additionally, strategically planned online campaigns focused on generating online sales can further enhance the attractiveness of these offers, encouraging quicker conversions from prospect to customer.

Sending out these tailored offers can also help you transition suspects into becoming full-fledged prospects. If they love your sampler, they’re more likely to be interested in the full product.

Plus, if your prospects don’t respond to any offers or promotions, they are likely mislabeled as true prospects. They will have needed more than a nudge to become customers, making them closer to suspects than prospects.

3. Sales team feedback

The people who work the most closely with your leads are the ones who know the most about them. This makes your sales team–or, if you’ve undergone plenty of business growth, your whole sales department–a highly valuable source of information.

Your sales team can tell you which specific leads have shown lots of promise. They’ll be able to explain what led them to that conclusion and tell you how sure they are of their assessment.

In the long run, this also helps you inform your approach when you’re separating sales suspects from prospects, as your sales team will help you identify differentiating trends. That means you’ll get more accurate in distinguishing the two types of leads the longer you spend listening to your sales team and trusting in their expertise.

4. Tracking behavior

We’ve already mentioned purchasing intent, but that’s not the only kind of data that gives insight into leads’ likelihood of becoming prospects.

It’s worth checking who’s visited your landing pages and how often. Someone who took a quick look at one of your product pages for a minute is far more likely to be a lead suspect, for example, whereas someone who spends a long time on a given product page multiple times over is almost definitely a sales prospect.

Tracking behavior also helps you determine what kinds of content to target your leads with. For example, a prospect that’s shown interest in multiple products would need different targeting than one that’s very dedicated to a single item.

5. Reaching out

Sales suspects and prospects alike can benefit from having direct contact with your brand.

For example, a prospect might want to know about any limited or time-sensitive offers. They might also like to hear about your customer care approach so they’ll know that you’re there for them once the purchase is made. Either way, Vonage voice calls will help you build a stronger connection and gently encourage these promising leads to bear fruit.

Sales suspects, meanwhile, very often have questions. They’re not as closely familiar with your brand or products, so they might not even know how you can help them. That means reaching out offers you an excellent opportunity to explain how you can address their pain points and give them what they’re looking for, which helps convert them to prospects.

6. Creating customer profiles

Once you know what your ideal customer looks like, it’s so much easier to match suspects to those profiles and see who fits. That way, you can qualify leads and pick out sales prospects in less time and with greater accuracy.

Multiple ideal customer profiles are a great idea here. That’s because you’ll likely have a variety of people who are interested in your products, so you should also know how to recognize those types of people.

Your prospects should also, in turn, influence your customer profiles. If you keep encountering prospects that share common characteristics, you can add those to existing profiles or create new ones accordingly so you can identify prospects among suspects with greater accuracy.

7. Getting help from AI

Lastly, enlist the help of generative AI platforms. These can process large volumes of data and draw insights for you, which will help separate suspects from prospects.

Also, sales-specific AIs, in particular, can create bespoke suggestions for you to help you maximize your ROI for investments made into sales suspects. This will let you create more prospects without wasting effort on suspects who are not interested after all.

Since machine learning algorithms improve the more they’re used, you can get better results from any AI by simply involving it in your sales separation processes.

Final thoughts

To maximize your sales team’s productivity, ensure everyone knows the exact differences between a sales prospect and a sales suspect. This will help them interact appropriately with both groups of potential customers so they can drive sales and improve your brand’s reputation.

While the intricacies of a sales suspect vs prospect can seem confusing, it’s actually quite simple. Briefly put, a sales prospect is someone who’s looking to make a purchase, while a suspect is someone who might, at some point, want to become a customer.

With our handy list of key differentiating factors, you’ll separate the two groups quickly.

Attracting and retaining top sales talent in a competitive market is challenging, especially in the rapidly evolving SaaS market. To win the attention of the best candidates, you offer them flexibility, great pay and benefits, growth and advancement opportunities, and an appealing company culture.

Finding the ideal candidate for a SaaS sales position is another matter.

The best candidates thrive in a fast-paced, innovative, and rapidly evolving environment while finding satisfaction in contributing to the company’s growth. Adding a highly complex enterprise comp plan to the mix increases the hiring challenge, potentially hindering understanding and trust.

Compensation benchmarking is crucial for large sales teams to make informed incentive decisions.

It ensures the development of fair and logical incentive packages that remain competitive. This enables businesses to attract and retain top talent and accurately budget for all compensation plan components without any unpleasant financial surprises.

What is Compensation Benchmarking?

Compensation benchmarking is the process of gathering, analyzing, and leveraging data that defines the costs associated with salaries and other compensation plan elements.

Sales compensation benchmarking insights enable organizations to remain competitive as industries and markets evolve to attract and retain top talent. Sales compensation components to benchmark include elements like base salary, commission rates, bonuses, and benefits.

How to do Compensation Benchmarking

Follow these four steps to effectively benchmark compensation and create a competitive incentive package.

Step 1: Identify Your Benchmark Group

Define your ideal sales rep profile including tenure, skill set, and industry.

For instance, reps with more experience may qualify for a higher salary and a richer incentive package than less experienced team salespeople.

Additional factors to consider include company size, geographic location, sales methodology, and sales cycle length. Benchmark against similar businesses for the best results or adjust the data according to things like geographic differences such as cost of living.

Step 2: Gather Data

Utilize reliable compensation benchmarking tools such as:

• Pavilion’s 2024 B2B Compensation Benchmarks report
• Betts 2024 Compensation Guide
• Betts 2024 Executive Compensation Guide

Consider conducting surveys of similar companies in your industry or leverage job boards and salary comparison websites such as Indeed and ZipRecruiter. When referring to job boards and websites, always consider how well-aligned the company and role are with the factors you are benchmarking. Otherwise, you risk skewing your data and negatively impacting your results.

Step 3: Analyze the Data

Review the data you’ve assembled. Examine factors beyond base salary, such as commission structures, bonus potential, and benefits packages. These are important elements for attracting and retaining top talent.

Look for trends and median figures within your defined benchmark group. These are key factors to prioritize as you progress to the next step of creating your compensation package.

Step 4: Develop a Competitive Compensation Package

Use your analysis to design a compensation package attractive to top sales talent while remaining financially responsible. Test the new plan against historical data to ensure it doesn’t break the budget.

Consider offering a mix of base salary, commission, and bonuses to incentivize performance that drives organizational goal achievement.

5 Compensation Benchmarking Practices Specific to Large Sales Teams

Large sales teams should complete additional steps during the benchmarking process. These best practices will further enhance your results.

• Account for Team Dynamics and Specialization: In large sales teams, roles can become specialized. Benchmarking should consider specializations such as SDR, BDR, and Account Executive and their unique contribution to the sales cycle. Analyze data for specific roles within your team structure to ensure competitive compensation for each level.
• Factor in Performance Variability within a Large Team: Large teams naturally experience a wider range of individual performance. Consider segmenting your analysis within the benchmark group to account for top performers, average performers, and those requiring improvement. This allows you to design a compensation structure that rewards high achievers while providing a baseline for development within the team.
• Analyze Quota Attainment Rates Across Similar Teams: Quota attainment is a key performance metric in sales. Benchmarking should not just focus on compensation but also on quota attainment rates within the benchmark group, specifically for teams with similar sizes and structures. This allows you to assess the achievability of your quotas and ensure your compensation plan incentivizes reaching those goals.
• Leverage Internal Data for Segmentation and Targeting: Large teams often generate a wealth of internal sales data. Utilize this data to segment your team based on performance metrics like revenue generated, deals closed, and meetings scheduled. This allows for targeted compensation adjustments within your team, addressing performance gaps and motivating improvement.
• Consider Retention Rates and Competitive Counteroffers: Employee turnover can be disruptive for large teams. Analyze data on retention rates within your benchmark group, particularly for top performers. Understanding counteroffer trends in the market can also be valuable. Use this information to develop competitive compensation packages that incentivize your top talent to stay.

Additional Considerations for Large Sales Teams

These additional compensation best practices will help you remain competitive and continue attracting and retaining the best talent in the marketplace.

• Ensure compensation packages are internally aligned based on experience, performance, and territory.
• Clearly communicate compensation structures and how performance translates to rewards.
• Regularly review compensation benchmarking data and adjust salary ranges and structures as needed.

Compensation Benchmarking For Large Sales Teams

Compensation benchmarking is important for businesses with large sales teams. It facilitates informed, financially prudent incentive package decisions.

Pay benchmarking helps ensure industry and market competitive incentives that attract and retain top talent. This comparative process ensures internal fairness in comp plans across an organization and ultimately drives sales performance to achieve organizational goals.

Offering competitive compensation packages helps attract top talent. These incentives also boost team morale, create a high-performance culture, and increase sales productivity.

Start benchmarking your compensation package by leveraging the above tools and adapting the outlined steps to your specific needs.

To learn more about the compensation resources QuotaPath offers, schedule time with a team member.

91% of sales teams missed quota last year, according to our 2024 Compensation Trends Report. Leaders attributed those misses to factors such as market conditions, misaligned sales activities, unstructured sales processes, lack of motivation, and unrealistic quotas or sales goals.

Understanding quotas and commissions in the tech industry is important for employers and potential employees alike. This knowledge is valuable when ensuring targets are attainable for employee motivation and retention and ensuring quotas align with and drive key business goals.

A thorough grasp of quotas and commissions also supports accurate forecasting. It enables smart sales strategy improvements by recognizing signs revealing broken or proven sales processes so they can be addressed or invested.

Read on to expand your knowledge of the industry standard for quotas and commissions.

Understanding Sales Compensation in Tech

Base salary, commission, quota, and commission structure are fundamental to understanding sales compensation in tech. This section reviews these terms, their role in compensation, and common compensation plans to consider. 

• Base Salary vs. Commission: Base salary plus commission is the most common sales compensation structure in SaaS. It offers salespeople some financial security while also motivating more sales activity.

Base pay is a pre-determined monetary biweekly or monthly payment to the employee regardless of their performance.

A commission is a financial incentive paid to sales reps for completing specific business activities. For instance, a salesperson may earn a commission for selling specific products or closing a multi-year deal.

The typical split between base salary and commission in tech sales is 50/50 or 60/40.

• Quota: A sales quota is an objective an individual sales rep or team is intended to achieve within a set period. The amount of quota attainment influences the commission rate of variable pay for a given deal. For instance, the closer a salesperson is to hitting quota, the higher the commission rate. Quotas are typically set based on historical data, market trends, and the company’s overall sales objectives.

After analyzing essential information, apply these best practices for setting sales quota:

1. Sales reps must pay for themselves. Their quota must represent a multiple of their On-Target Earnings (OTE) to cover the salesperson’s base salary, benefits, and other expenses to ensure profitability. The industry standard multiplier ranges from 3x OTE to 8x OTE to calculate an annualized quota. However, many factors influence which multiplier is best for you. That’s where our Quota:OTE Ratio Calculator comes in. Use this handy free tool while setting quotas to identify the best multiplier to use.

2. Consider sales cycle length, average sales price, and company stage.  These three factors help you set a quota frequency of monthly, quarterly, or annual. Our research indicated that companies typically rely on average sales price and sales cycle length, and preferred quarterly quota cycles. The company stage can mean a longer, annual quota period for an older, more established company, or a shorter, monthly quota period for startups to create urgency for their reps.

3. Confirm that reps can achieve their sales quota. Regardless of the amount of analysis and planning invested in setting quota, if your salespeople feel it’s unattainable, they may feel demotivated and frustrated. That’s not to say that 100% of your reps should hit quota, however, if nobody has ever achieved it, that is a bad quota. A good rule of thumb is that 80% of reps hit quota each month. Then, top performers will compensate for bottom performers and the overall organization will achieve quota.

• Commission Structures: The most common commission structures in tech sales are single-rate commission, commission with accelerators, and a milestone bonus on exceeding quota. The single-rate commission plan is easy to understand and pays the same rate on every deal. Commission with accelerators is a great way to reward overperformance since incentives increase in tiers as reps work toward and beyond quota attainment. The milestone bonus encourages consistent performance by rewarding quota achievement. This makes it an excellent addition to the single-rate commission plan.

Base salary plus commission is the most common sales compensation structure in tech. Sales quotas tied to the right commission structure motivate reps to excel.

Tech Industry Standards

These tech industry averages will give you perspective as you build your compensation plan.

Average Commission Rates

The standard commission rate for sales is typically between 20% and 30% of gross margins. However, it can vary depending on factors such as industry, total sales volume, seniority and experience, and product complexity. According to our research, average commission rates for different tech sectors like software, hardware, and SaaS are:

• Telecommunications: 5–20% of the total sale value
• Insurance: 5–15% of the total premium amount
• Advertising: 5–20% of the total advertising spend
• Manufacturing: 2–10% of the total sale value
• SaaS: 10–30% of the total sale value
• Automobile: 1–5% of the total sale value

Quota Attainment Rates

Our research found that 91% of companies fail to achieve our suggested attainment of 80% or more of their quota targets as a team.

Quota attainment and sales commissions typically rise and fall together. Meeting or exceeding quota can lead to higher commission rates, bonuses, and rewards. On the other hand, falling short of quota can mean lower commission rates or reduced incentives.

Leverage Industry Standards

Gaining a clear understanding of quotas and commissions in the tech industry can help you attract, motivate, and retain top talent while supporting accurate forecasting and intelligent sales strategy improvements.

Now you know the difference between base salary and commission, the relationship between quota and commissions, how to set a quota and the best commission structures in tech sales. Combined with the industry standards for average commission and quota attainment rates, you are armed with what you need to establish your tech company’s compensation plans.

See how QuotaPath supports tech businesses as they set fair and logical quotas that challenge and motivate your organization while driving targets. Schedule time with a team member or start a free trial today.

Managing multiple sales channels and territories in a growing SaaS company has its challenges.  Competition and confusion can arise when different sales channels, such as inside and outside reps, target the same customers or prospects.

Goals and incentive structures may not be fully aligned across all teams, creating conflicting priorities and a lack of collaboration. Territory management issues can result in an unbalanced workload where some territories or channels have a greater concentration of leads or larger deals.

Clear alignment with business goals and collaboration across all teams is crucial to achieving sales goals and, by extension, company targets.

If you’re struggling with any of these challenges, we’re here to help. This blog focuses on common SaaS sales structures, best practices for management, and incentive strategies for different teams.

What’s a recommended sales team structure for startups?

Your startup’s sales structure selection affects all aspects of sales, including lead generation, conversion rate, and speed to close.

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Common SaaS Sales Structures

SaaS companies typically adopt the following three sales structures. Read on to learn their defining characteristics and their pros and cons.

Inside Sales vs. Outside Sales

What’s the difference between inside sales and outside sales?

Inside sales reps (ISRs) focus primarily on inbound lead qualification. ISRs use various forms of digital communication, such as email, messaging apps, social media, video conferencing, and phones, to engage prospects.

By contrast, outside sales reps (OSRs) focus on outbound prospecting, in-person meetings, conferencing, networking events, and closing deals.  

The advantages of inside sales are that it is less costly, more efficient, and easily scalable, enabling businesses access to a greater talent pool. On the other hand, outside sales facilitates relationship building and offers the opportunity for more focused engagement with the entire buying committee all at once.

Inside sales is an excellent choice for SaaS sales, where outside sales benefits businesses offering physical products, enabling prospective buyers to personally experience the product during a demo.

Hybrid Sales Model

A hybrid model is a blend of inside and outside sales. Hybrid reps work remotely at least a percentage of the time, leveraging multiple channels to engage prospects, such as email, text messaging, social media, phone, and Zoom calls. Remote salespeople also visit potential clients based on customer preferences.

Hybrid sales increased in popularity during the COVID pandemic and is said to be the future of B2B sales, according to McKinsey.

There are benefits to adopting a hybrid model. For instance, it helps businesses minimize costs. It enables former outside reps to increase customer engagement while accommodating the 40% of customers who prefer to buy from a sales rep they’ve met in person.

Hybrid sales can also facilitate gathering the entire buying committee to help build consensus. Yet the remote aspect of the model allows more data to be gathered throughout the buyer’s journey.

Account Management vs. New Business

Account managers (AMs) focus on existing customer relationships and upselling opportunities to retain and grow these essential client accounts. Accomplishing this is typically done by helping the customer achieve their goals for using the product or service they procured from your company.

On the other hand, new business reps focus on acquiring new customers. They engage with inbound leads and potential prospects to nurture and guide them through the sales process until, ideally, they become a paying customer.

Account managers and new business reps can work together to maximize customer lifetime value. It starts with new business reps prioritizing leads and prospects who match the ideal customer profile (ICP). These are the prospects likely to benefit the most from your product and remain as customers in the long term.

Then, new business reps and account managers collaborate for a smooth customer handoff where essential customer information is shared, facilitating a superior onboarding experience. This sets the customer up for greater success with your product as the account manager works to retain and grow the customer.

Best Practices for Managing Multiple Sales Channels and Territories

Leverage these best practices to more effectively manage multiple sales channels and territories.

Clear Channel and Territory Definition

Clearly defining each sales channel and territory is crucial so sales reps can function efficiently. When there is confusion or miscommunication of sales channels and territory, reps can become unsure of which specific customer segments or regional areas they are responsible for. This can ultimately result in finger-pointing and weaker sales results.

Strategies for segmenting territories include leveraging factors like customer size, industry, or geographic location.

Alignment and Collaboration

Alignment across revenue-generated teams around shared goals gets the team pulling together to achieve organizational objectives. Fostering communication and collaboration between different sales teams facilitates the attainment of targets.

Sales collaborate with various teams to reach their goals. Examples of collaboration practices include joint lead nurturing by sales and marketing, effective handoff processes from sales to account management, and team selling efforts involving AEs and SEs to advance deals.

Performance Management

Set clear performance metrics tailored to each channel and territory to gauge sales performance and identify adjustment and coaching needs. These metrics help sales teams track progress toward goals, prepare and plan for growth, and build compensation plans.

Relevant metrics vary based on role. For example, ISR metrics include the number of calls, meetings, or deals closed, and OSR metrics include the number of demos, meetings, and proposals. By contrast, AM metrics include customer retention, lifetime customer value, and account growth. New business rep metrics include the number of opportunities created, demos completed, meetings, and calls.

Feedback and coaching are essential strategies that help boost sales team performance. To be effective, these practices must take place on a routine basis. Focused 1:1 and team sessions are both effective ways to improve techniques and progress toward goals. Remember not to overload an individual rep with too much feedback in one session. Instead, prioritize one area and work on that before advancing to another. This ensures consistent improvement.

Technology and Tools

Leverage CRM and marketing automation tools to streamline team communication and data sharing. This improves alignment and collaboration across teams while boosting efficiency and results.

Utilize sales forecasting tools to improve territory and quota planning. These platforms deliver up-to-date metrics that enable data-driven decision-making and scenario modeling for greater success and results.

Incentive Strategy for Different Sales Teams

Using these strategies will help you successfully create and communicate incentive plans.

Aligning Incentives with Goals

It is essential to design incentive plans that motivate reps to achieve specific goals relevant to their channel and territory. This ensures rep buy-in while driving the achievement of organizational objectives.

Quotas, commissions, and bonuses can be structured to motivate goal achievement based on the specific role and territory.

For instance, ISRs, OSRs, and new business reps can be incentivized by a commission-based bonus, which is triggered when the rep exceeds the quota. Tiered commissions for these same reps pay increasing percentages as specific targets are exceeded, such as 10% commission for 100% and 15% for 120%.

Account managers, on the other hand, are incentivized based on metrics like customer retention rate, upsells and cross-sells, and CLTV. An example of an account management bonus structure might include renewal bonuses for exceeding customer retention goals, with the bonus triggered at a 95% renewal rate. They may also receive an expansion bonus for increasing average revenue by a designated percentage through cross or upsells to existing customers.

Balancing Individual and Team Performance

Create incentive plans that reward both individual achievement and team collaboration. Team incentives or challenges foster healthy competition and promote cross-departmental relationships and teamwork while driving goal achievement.

Team-based bonuses or contests to encourage collective success include competitions that involve territories, verticals, or small groups facing off against each other to boost sales. These contests are especially productive when combined with individual SPIFFs to achieve goals.

Transparency and Communication

Ensure clear communication of incentive plans and how performance translates to rewards. Reps will not be motivated if they don’t understand how they’re compensated. Consequently, they will fall short of their targets, hindering organizational objective attainment.

Incentive plans are not static instruments. It’s crucial to regularly review and update compensation plans to adjust for performance, market conditions, and changes to organizational objectives.

Manage and Align Multiple Sales Channels and Territories

Managing and aligning multiple sales channels and territories in SaaS has its challenges. Boost your success by implementing the best practices and incentive strategies we’ve discussed.

Remember to clearly define channels and territories to avoid confusion. Create alignment across revenue-generating teams and foster a collaborative culture to improve results. Set clear performance metrics tailored to each channel and territory and consistently provide feedback and coaching to individual reps and the collective team.

Leverage technologies and tools like CRM, marketing automation, and sales forecasting tools to streamline communication and data sharing while enabling data-driven decision-making and plan modeling.

Then, incentives will be aligned with goals to drive organizational goals by structuring quotas, commissions, and bonuses in a way that motivates goal achievements. Balancing individual and team performance through rewards to encourage collaboration and cross-departmental relationships. Transparency and clear communication are essential for rep buy-in and motivation to achieve goals and drive organization objectives.

Sales structures and incentive strategies require ongoing adaptation and improvement based on performance, market conditions, and organizational goals.

See how QuotaPath supports complex teams and compensation plans. Schedule time with a team member or start a free trial today.

Learn more about sales management with additional resources like HubSpot and communities like Pavilion and Women in Sales.

Compensation plans are used to incentivize selling behaviors and impact the bottom line.

This is true regardless of an organization’s stage, size, or industry.

However, the components of a comp plan should vary according to how large a sales team is and the business’s key goals.

For instance, we often design compensation plans for startups to attract talent, take risks, and drive rapid growth. These might include bounty bonuses or logo commissions, rewarding reps for winning top accounts from a specific industry or region. We also see startups implement single-rate comp plans as their first ones for simplicity and lack of available historical data. 

But for high-growth and larger sales teams, comp plans are modeled off lots of data tied to previous years’ performances and financial forecasts. 

These comp plans are methodical, emphasize predictable revenue, tie in various metrics beyond annual recurring revenue (like customer lifetime value), and define clear divisions and pay scales between reps’ skill levels and roles within their teams. 

Overall, compensation plans for larger SaaS sales organizations are more sophisticated, data-driven, and focused on achieving long-term, sustainable growth.

They’re more complex. And those complexities can become so overbearing that they actually deter from your compensation strategy versus support it. 

So, to keep those complexities in line, we came up with five comp plan best practices. 

5 Comp Plan Best Practices for Larger Sales Teams

1. Don’t copy and paste a plan from an existing org. 

First, no matter how tempting, do not bring a comp plan that worked well at your previous organization into your new one. 

Sure, bring in certain elements that apply at scale, like accelerators and multi-year contract bonuses. But copying and pasting a complete comp plan from a different business will cause a lot more headaches than the shortcut you took in place of developing a unique plan. 

Establish your business’s key business objectives, then, build a plan that aligns to these goals and drives selling behaviors that push these objectives. 

The best compensation plans are living documents. They should be reviewed and adjusted regularly to reflect changes in the market, your business goals, and your sales team’s needs. By establishing a culture of continuous improvement and data-driven decision-making, you can ensure your compensation plan effectively attracts, motivates, and retains top sales talent.

2. Implement tiered commission structures

As much as we love the single-tier, flat-rate commission structure for startups or plans that support a new product or territory, avoid using these for more established teams.

Instead, implement comp plans with multiple commission tiers based on performance levels to incentivize high achievers. You might also recognize the term “accelerator” for this. 

The more volume sold, the higher the commission rate paid.

For example, a rep earns 10% on the first $100,000 in sales, 15% on the next $100,000 in sales, and 20% on any sales exceeding $200,000 — no cap.

You could also consider adding cliffs or commission floors to your account manager/customer success roles and leadership compensation plans, which set a minimum performance threshold before commissions are rewarded.

3. Build a transparent communication plan

Since larger sales teams typically have more complicated compensation plans (splits, team volatility, draws, multiple products, etc.), your communication plan when rolling out compensation plan changes is paramount. 

This includes gathering feedback from reps during plan design, introducing early on that changes are incoming, dedicating team meetings specific to comp plans (and supported by 1:1s), accessible documentation, and a source of truth for all things sales compensation.

Multiple Communication Channels: Don’t rely on a single announcement. Utilize a variety of channels like town hall meetings, team huddles, email communication, and an internal knowledge base to ensure everyone receives the information.

Focus on Benefits: While outlining the details is important, emphasize the positive aspects of the changes and how they benefit the sales team. Highlight potential earning opportunities and incentives to keep reps motivated.

Openness to Feedback: Encourage questions and feedback from your sales team. Schedule one-on-one meetings or open forums to address concerns and ensure everyone feels heard. By fostering a two-way dialogue, you can identify potential areas for improvement and refine the plan as needed.

Remember, even with its complexities, a well-communicated compensation plan can maintain or build trust with your team and motivate your sellers.

4. Leveraging technology for goal setting and tracking

To help with all of this — recruit the help of technology.

Today’s software offers can streamline these compensation processes and empower both sales reps and leadership when implemented correctly. For example, platforms like HubSpot’s CRM offer built-in task management features so you can clearly assign responsibilities, while its unified reports let you cross-reference each team member’s activity with actual results. 

Tools like QuotaPath, for instance, can enhance goal alignment by giving everyone a place to check the organizational-wide goals and their contributions toward those goals. 

Plus, this real-time visibility and insight allows reps and managers to adjust their deal approaches on the fly to coach, motivate, and support where needed. Another benefit of this is the accountability it creates to give reps ownership over their earnings.

Lastly, compensation performance data can help you identify flags with your compensation strategy, underperformers (and over performers), outlier deals, and more so that you can adjust and allocate resources where necessary. 

By leveraging technology for goal setting and tracking, you can empower your sales team to take ownership of their performance, hold themselves accountable, and ultimately achieve greater sales success.

5. Adjust your plans throughout the year

Additionally, remember comp plans rarely succeed for the entire year if they stay the same. 

Businesses operate in dynamic environments. Market conditions can shift, competitor strategies can evolve, and your sales goals might need adjustments. To ensure your compensation plan remains effective, be prepared to adapt it throughout the year.

Here are some data points to monitor:

• Hit Rates: Are your reps consistently achieving or exceeding their quotas? Extremely high or low hit rates might indicate quotas that are too easy or too difficult, requiring adjustments to ensure a healthy challenge and achievable goals.
• Average Deal Size: Is the average deal size meeting expectations? If reps are consistently closing smaller deals than anticipated, commission structures might need to be reviewed to incentivize pursuing larger deals that contribute more to overall revenue goals.
• Sales Cycle Length: Is the sales cycle taking longer than expected? This could indicate a need for additional sales enablement or adjustments to the compensation plan to incentivize faster deal velocity.
• Employee Turnover: High turnover rates within your sales team could be a sign that your compensation plan is uncompetitive or doesn’t adequately motivate reps. Analyze data and conduct exit interviews to identify areas for improvement in your plan’s structure and offerings.

By regularly monitoring these data points and incorporating feedback, you can maintain a dynamic compensation plan that adapts to changing circumstances and optimizes sales performance throughout the year. This ensures your plan remains a valuable tool for attracting, motivating, and retaining top sales talent.

How to Motivate Sales Team 

70% of RevOps, Sales, and Finance leaders said their comp plans motivate reps. What about the other 30%?

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Bonus Best Practices

While the core elements discussed above provide a solid foundation, here are some additional best practices to consider:

• Alignment is Key: Ensure your compensation plan directly aligns with your overall business goals. This creates a clear link between rep performance and achieving company objectives. 
• Motivate Through Incentives: Go beyond base salary and commission. Consider implementing sales contests and incentive programs to motivate your team and drive specific sales behaviors. Strategic use of contests can be a powerful tool for boosting performance. 
• Strategic Spiffs: Supplement your core compensation plan with strategic spiffs (Sales Performance Incentive Funds). These targeted rewards can incentivize specific actions that support your sales goals. 
• Feedback is Essential: Don’t operate in a vacuum. Regularly gather feedback from your sales team on the effectiveness of your compensation plan. This feedback allows you to identify areas for improvement and ensure the plan remains relevant and motivating. 

By incorporating these additional best practices, you can create a truly effective sales compensation plan that attracts top talent, drives exceptional performance, and contributes to achieving your overall business objectives.

Align Your Compensation Plans Now

Aligning compensation plans with company goals can be a complex tightrope for large companies. 

Setting goals that balance short-term wins (like quarterly quotas) with long-term objectives (building customer loyalty and recurring revenue) can be tricky. Traditional commission structures that reward only new sales might discourage reps from investing in existing accounts, hurting renewal rates. 

Additionally, ensuring fair and adaptable plans can be challenging with complex sales teams and ever-changing markets.

That’s where QuotaPath comes in. 

By leveraging data and analytics, QuotaPath helps build compensation plans that incentivize the right behaviors. It can track performance against multi-faceted goals, including customer lifetime value metrics. This allows companies to reward reps for upselling, renewals, and other actions that drive long-term growth, aligning their efforts with company objectives.

QuotaPath also fosters transparency and fairness by providing clear commission structures and performance dashboards to drive sales performance. With QuotaPath’s help, large companies can bridge the gap between compensation plans and company goals, motivating their sales teams for long-term and consistent success.

Talk to Sales today to learn more. 

Sales forecasting is one of the most essential yet challenging aspects of business. However, having an accurate estimate of revenue through a sales forecast can shape your success.

Everything from developing budgets to planning production capacity relies on this forecast. That’s why accurate insights are crucial. 

The solution? Demand forecasting. Here, we’ll explore why this process is so beneficial and strategies to implement.

What is demand forecasting and why is it important?

Demand forecasting is the process of estimating future sales of your products or services by using relevant data to predict demand. The aim is to remove the guesswork by gaining a more accurate view of predicted revenue streams to help better manage budgets and sales cycles.

Why is this important? One aspect is streamlining. Accurate forecasts allow you to anticipate fluctuations in demand to better allocate resources. Determining stock levels helps avoid understocking inventory or product obsolescence. It’s also beneficial for avoiding lost sales opportunities. 

All of this has a knock-on effect on operational efficiency and, consequently, brand awareness. It ensures you’re always able to meet customer demand. This, in turn, can increase your company’s profitability, protect your brand reputation, and ensure steady business growth. 

Key benefits of accurate demand forecasting

As we mentioned, demand forecasting offers numerous benefits, from resource allocation to sales opportunities. Let’s dive into these in more detail.

Inventory management

Demand forecasting in supply chain and inventory management is essential for maintaining optimal stock levels throughout the year. 

Rather than guessing what you need and when, you can use forecasts to reduce the potential of stockouts, improve ordering efficiency, optimize revenue management, and save on the cost of storage. By ensuring a healthy fill rate, you can meet customer demand consistently while minimizing the risk of understocking or overstocking inventory. You could even save on transport costs by spotting ways to consolidate orders.

Resource allocation

Anticipating demand equips you with the knowledge to better plan and allocate resources. Whether it’s production capacity, manpower, or marketing budgets, you can approach allocation strategically to be more effective during times of high demand and scale back during quieter periods.

Budgeting and planning

Demand forecasting gives you some of the best insights to plan budgets. This can help you decide how much to spend on areas like marketing, hiring, or product development, depending on what resources you will need and how much revenue you anticipate coming in.

Utilizing budgeting software can streamline this process further by automating data analysis and providing real-time insights into budget allocation. With budgeting software, you can efficiently track expenses, identify areas for cost-saving, and make informed decisions to maximize your resources and optimize financial performance.

You may even be able to spot investment opportunities. Automation is becoming increasingly prevalent in businesses today, so you may free up the budget for click to call dialer software to support your sales team’s outreach efforts or customer service chatbots to improve conversion rates.

Risk management

Demand forecasting helps identify potential risks and uncertainties related to sales performance. This way, you can be better prepared to manage challenges.

For example, if your demand forecast indicates a potential downturn in sales during a specific season, you can adjust inventory levels or implement targeted email marketing campaigns to give sales a boost.

Improved decision-making

Any forecasting model replaces guesswork with reliable information specific to your business and customers. With that information, you can make more informed decisions about future sales trends. 

For example, if your forecast indicates a surge in demand for a particular product, you can adjust your pricing strategies. This could mean offering promotions or increasing sales incentives during peak demand periods to capitalize on increased customer interest.

Understanding cross-channel demand patterns, particularly in the context of omnichannel ecommerce, becomes crucial for effectively allocating resources and maximizing sales across multiple sales channels. 

5 steps for effective demand forecasting

While demand forecasting can benefit your company, it’s important to do it correctly if your strategy is to be successful. We’ve broken it down into five easy steps.

1. Collect data relevant to your goals

Begin by collecting and analyzing relevant data available that aligns with your sales and business growth goals. This information could include any or all of the following: 

• Historical data: Past sales data can tell you a lot about what might happen in the future. Pull data from sources like your CRM, inventory management software, call center reporting tools, customer forms, and even other departments. Review previous demand, looking out for patterns, trends, and seasonal fluctuations that are likely to repeat. 

• Market research: Gather information about your target customers, including their preferences, buying habits, and what influences their purchasing decisions. This could be done through surveys, interviews, or analyzing existing market studies. 

• External factors: Industry trends and competitor activities can impact your forecast. But it’s also worth gathering data on economic conditions and socio-political factors like regulation changes or consumer sentiment. For example, a new competitor entering the market might affect demand for your products, or a change in government policy might influence consumer buying behavior.

2. Implement your chosen forecasting methods

Once you have the data, you must analyze it to draw conclusions. You can do this manually or with the help of automation. Let’s explore a few options.

Statistical models

Statistical techniques like time series analysis and regression analysis are useful for creating forecasting models. 

Time series analysis looks at patterns in historical data over time, such as increases or decreases in sales during certain months. 

Regression analysis identifies relationships between variables. It considers how factors like marketing spend, promotions, and economic conditions have impacted sales.

Conducting an in-depth analysis of large data sets manually can be challenging. However, machine learning algorithms make this process more efficient and can help identify complex patterns, resulting in more accurate predictions.

Forecasting software

As with many business processes, software can make forecasting much smoother. If you choose the right model, it can help to automate data collection and analysis and generate reports for you.

But it’s crucial to choose the right solution for your business needs. You should also understand how that solution creates the forecasts so you can make better decisions. 

Remember that your existing software such as your ERP system may have built-in forecasting capabilities. Or you may need a customized program for your specific industry. 

Collaborative forecasting

Technology isn’t always the answer. Bring together different departments to share insights and perspectives to help shape your forecast. 

For example, a software company launching call script software might get input from their sales team on customer demand and predicted sales. The marketing team would provide campaign insights, while the finance department could offer financial projections.

3. Segment your market

Market segmentation can refine your sales forecast by accounting for demand drivers and behavior variations across different segments. 

After segmenting your audience or products, you can develop separate forecasts for each category. This allows you to account for demand drivers and behavior variations across different segments. 

Here are two ways you might segment your market.

Customer segmentation

Narrow your wider target market into smaller groups based on different characteristics that influence purchasing patterns. This could be:

• Demographics: Age, gender, income
• Psychographics Lifestyle, values, interests
• Geographic location
• Buying behavior

Product segmentation

Categorize your products based on their attributes, such as price, functionality, and lifecycle stage. This helps you tailor your forecasting approach to the different characteristics of each product category.

You might forecast higher-priced products differently from budget items or adjust forecasts based on a product’s lifecycle (e.g., introduction, growth, maturity, decline).

4. Monitor sales performance and make adjustments

Tracking sales performance is crucial to improving the accuracy of your forecast. This allows you to make changes when needed and stay responsive to changing market dynamics.

Keep an eye on key performance indicators (KPIs), sales metrics, and market trends. How do they compare with your forecasted values? If your actual sales drop below what you forecasted, it could be a sign that you need to adjust your strategy or allocate resources differently to adapt to changing market conditions.

Remember that while it’s great to have a demand forecast in place, there are some things you can’t predict. So, it’s essential to remain agile in response to new information or unexpected events that may impact demand. 

It’s likely that you will need to revise forecasts, reallocate resources, or adjust marketing strategies along the way. For example, a competitor launching a similar product could unexpectedly reduce your demand, meaning you need to consider scaling back production.

As part of this step, establish a feedback mechanism. Gather regular insights from frontline employees, customers, and partners about their experiences and perceptions. Their feedback can provide valuable information about changing customer preferences, market trends, or other factors that may influence demand.

5. Review and repeat

After making forecasts, it’s essential to compare them with actual sales data to identify discrepancies and understand their root causes. You may need to change your data collection tactics or forecasting methods in the future.

Forecasting isn’t a job you can do at the start of the financial year and forget about. It’s an ongoing process that needs continuous refinement. Regularly review and refine your forecasting models based on stakeholder feedback, performance metrics, and learnings from past forecasting experiences.

Consider building a scenario analysis into your forecasting process, too. This involves preparing for the potential impact of various scenarios or events on your sales forecast. For example, you might consider what would happen if there’s a recession, if you launch a new product, or if a competitor starts a price war. 

Imagining these scenarios and their potential effects on sales helps you better prepare and make plans to respond effectively.

Demand forecasting: Unlock powerful insights to drive sales

While we can’t see into the future, demand forecasting could be as close to a crystal ball as it gets. 

Accurate sales forecasts help businesses make more informed decisions and plan strategically. The ability to anticipate future demand means you can make the right adjustments to everything from stock levels and manpower to meet customer needs. 

This not only contributes to a more efficient business model but also reduces inefficiencies and reduces costs, leading to a more profitable business and satisfied customers.

A sales rep based in Colorado earned $100K in commissions that the company didn’t pay because he left before they collected the cash from the customer. Their compensation policy states that commissions are paid on cash collection.

Did the company make the right call or cheat their rep?

In this case, not only did the company cheat their rep, but they broke the state law, dictating that employees should be paid their outstanding earnings within a specific timeframe. Although there are no federal laws about the payment of commissions following employment termination, most states have laws requiring the payment of earned commissions according to the compensation agreement.

However, even if the law had not mandated it, we think the company should have paid the commissions based on what the rep sold, regardless of what the agreement says. Reps should receive the commissions they earned.

Period.

This blog provides best practices to honor commissions when a rep leaves.

Let’s get started.

5 Best Practices When It Comes to Paying Commissions After a Rep Leaves

Should you find yourself in a position where a rep leaves before collecting commissions earned on recent deals, we recommend leveraging these five best practices to properly honor their commissions.

5. Know the State Laws

Laws dictating commission payouts and transparency differ from state to state, according to the Commission Payment State Law Survey. However, some states have very strict policies on commission payouts. For instance, Colorado, Hawaii, Kansas, Maryland, New Jersey, New York, Ohio, Texas, and Virginia prohibit commission withholding after termination.

Arkansas requires employers failing to pay employees all due wages within seven days of the next payday to owe the employee double the wages. Don’t let the term wages confuse you here. The survey revealed that most states recognize commission as wages except Ohio and Alabama.

Although most states have established policies on commission payouts after termination, these policies are typically in effect in the absence of a signed sales rep’s compensation agreement. States indicate that policies on commission payouts after termination should be clearly explained in a signed agreement.

When it comes to the debate of when commissions are deemed earned, most states, except Florida and Georgia, have a general definition that applies in the absence of a commission agreement. Additionally, Delaware and Michigan recognize the procuring cause, where commissions are earned when an order is procured and accepted unless a signed agreement states otherwise.

Download our customizable commission policy template

4. Establish a Crystal-Clear Commission Policy

A commission policy, or a compensation agreement, is a legal document designed to help the company and employee avoid future compensation disputes. It helps commissioned employees better understand your compensation structure and serves as an easy reference if questions arise. You can write your own or download one of our free commission policy templates.

Every commission policy should include a detailed explanation of the following: 

• On-target Earnings (OTE): Salary plus commissions when achieving 100% of quota for the year.
• Quota Amount: A sales objective an employee should achieve within a designated period.
• Quota Frequency: How often progress toward quota attainment is measured. Typically, quarterly, but maybe monthly or annually.
• On-target Commissions (OTC): The amount the employee will earn when they hit quota for the year.
• A Commission Table:  A table containing commission rates tied to progress toward a quota.
• Additional Comp Plan Elements That Impact Commission Rates: For example accelerators and decelerators.
• Payment Terms: An explanation of how commissions will be calculated. When a sale is considered eligible for commission, and when your organization will pay the commission.
• SPIFs: Additional short-lived contests, incentives, or bonuses during slow periods to drive product line revenue or other exceptional reasons.
• Clawback provision: An explanation of how and when a rep must pay commission back to the company if a customer cancels a contract or fails to pay after the employee has been paid for the sale.
• Dispute Resolution: The process for resolving commission disagreements between employees and the company.
• Accrual: A rule that designates employment status requirements to qualify for a commission or bonus payout.
• Commission Payout Upon Termination: A payout clause that covers paying out earned commissions to a departing sales rep.
• Signature: When an employee signs off on the commission policy, they are acknowledging understanding of their plan.

Getting rep signatures on these policies also creates alignment and transparency in the compensation process. More importantly, the plan verification process gets employees to re-read their commission policies and ask clarifying questions before signing. Once reps have signed off on the policy, ensure they can access these documents at any time to deepen their understanding of it.

3. Differentiate Earned vs. Unearned Commissions

It’s crucial to clearly define the difference between earned and unearned commissions to avoid confusion or misunderstandings.

For instance, earned commissions are commission payments for which the rep has already met all requirements to receive them, such as closed deals within the earning period. However, Unearned Commissions are commission payments for which the rep hasn’t yet met all requirements to receive them, such as a deal closed but outside the earning period.

Clearly defining these terms in your compensation agreement is fair to both parties in several ways. It ensures the rep receives the compensation they’ve rightfully earned for their completed work and the company doesn’t pay out for work not yet complete. Plus, it builds employee trust and morale by having a transparent and fair outline of the rules.

2. Communicate Clearly With Existing & Departing Reps

Proactive communication throughout a rep’s employment and during their departure is essential to build transparency and trust. As a result, you prevent frustrations, poor morale, and misunderstandings. Your commission-related communications should include:

• Review Policy Terms: Review the relevant commission policy terms with the departing rep to ensure they understand their entitlements.
• Discuss Payout Timeline: Communicate the timeline for a payout of earned commissions.
• Address Concerns: Openly address any questions or concerns the rep may have regarding their outstanding commission.

1. Lead with Fairness.

Establishing fair and equitable policies helps foster trust within the organization so employees know what to expect and what is expected. It supports the company’s reputation in the market and helps attract top talent.

There are various ways to incorporate fairness into your commission policies. For instance, communicate effectively, ensure equal pay for equal skills, experience, and contributions, and offer quota relief. You can also periodically conduct market research to ensure you’re offering market-competitive compensation and request employee feedback concerning their commission plan.

We believe that paying departing reps on what they sold, regardless of the agreement, since they should be paid what they earned instead of what we legally owe them.

Honor Commissions

Do the right thing and honor commissions when a rep leaves. Leveraging our best practices will help you achieve this goal. Know the state laws, establish a clear commission policy, and differentiate earned from unearned commissions. Then practice clear communications with existing and departing reps and establish fair and equitable compensation policies.

QuotaPath partners with leaders to develop fair and equitable compensation plans and policies and make compensation management processes more efficient through our technology. Schedule time with a team member or sign up for a free trial to see for yourself.

Strategic partnerships can lead to up to 30% revenue increases. 

It’s no wonder SaaS companies are heart-eyed toward this function. 

But compensating for this role can be tricky. 

Much like compensation plans for other go-to-market roles, your partnership compensation plans will depend on your organization’s maturity, target market, and goals. 

Are you an early-stage startup forging your first partnerships or a well-established player with a robust partner ecosystem?  Who are you trying to reach with your partners? Understanding their needs and behaviors will dictate the most effective partner compensation approach. Are you aiming for rapid market penetration or building long-term, strategic partnerships that deliver recurring revenue?

By carefully considering these factors, you can design a partnership compensation plan that aligns incentives, motivates your team, and ultimately drives sustainable growth for your SaaS business.

Below, learn about the rise of channel partners and a few ways to consider compensating your in-house partnerships team. 

What is a channel partner?

First, what is a channel partner?

Reaching your target market and achieving consistent growth can be a challenge.  This is where channel partners come in, acting as a powerful extension of your go-to-market (GTM) strategy.

Channel partners are external companies collaborating with you to sell your SaaS product or service. They leverage their established industry relationships, market knowledge, and expertise to reach a broader audience and generate leads on your behalf. 

Essentially, they act as an additional sales force, expanding your market reach, and brand awareness while enhancing your organization’s credibility and reducing your sales and marketing costs.

The most common types of channel partners in SaaS fall into two categories:

• Technology: Technology partners have deep product knowledge and integrate your offering with their services to deliver enhanced customer value (E.g., HubSpot and QuotaPath).
• Resellers: Resellers act as intermediaries, purchasing your software licenses wholesale and then reselling them to end-users at a markup. They focus on distribution and sales volume.

By building a strategic network of channel partners, you add another avenue to increase pipeline and further define your ideal customer profile. 

How to Tell if You’re Ready For Partnerships

Despite the clear benefits of adding partner channels, not every organization will be ready to activate this lever immediately.

Here are some scenarios that indicate your business should add a partnerships vertical:

By recognizing these scenarios, you can identify if a partnership vertical makes sense. 

Rise of Channel Partners

Securing tech partners is a sales play and retention play; the stronger the partnership, the more benefits there are for both. This philosophy has become increasingly clear to businesses in recent years, fueling a dramatic rise in the importance of channel partners within the SaaS landscape.

For instance, according to Glassbox VP of Partnerships Alex Richards, a whopping 85% of SaaS companies acknowledge the critical role strategic partnerships play in their growth trajectory.

Meanwhile, 65% of SaaS companies actively partnered with another organization in the past year, highlighting the shift towards a collaborative approach to market expansion.

For real-time data, search “SaaS Partnerships jobs.” Thousands of roles are open, with about 300 at the executive level. 

These statistics paint a compelling picture: partnerships are not just a trend but a strategic imperative for driving growth and success in today’s competitive SaaS landscape.

2024 Channel Partner Trends 

So, what’s next for channel partnerships? 

Techaisel compiled a list of 10 Channel Partner Predictions, three of which we’ve pulled for you below.

1. Shifting Margins: Partners Embrace Customization

Shrinking margins are pushing partners to move beyond basic reselling. Success lies in offering customized solutions that combine multiple products with high-value services like integration and support. However, striking the right balance is crucial. Partners need to avoid overly generic offerings that get commoditized, while also keeping the cost of highly customized solutions manageable. This shift demands expertise in modular solutions and a flexible approach that adapts to evolving customer needs.

2. AI: Friend or Foe? Partners Adapt to the New Landscape

AI is transforming IT, impacting both partner value propositions and the buying landscape. Channel partners need to embrace AI to stay relevant, offering solutions that leverage its benefits for faster business results and efficiencies. However, a proactive approach is key to avoid being disintermediated by vendors who develop their own AI-powered sales tools. Partners must carefully evaluate trends and invest in capabilities that align with their business goals.

3. From Push to Pull: Partners Embrace Ecosystems

Customer demand for hybrid solutions is driving a shift from traditional channel models to collaborative ecosystems. Partners must adapt by developing strong multi-party collaboration skills and integrating around data-driven solutions. This means focusing on customer needs, not just selling products. Building successful ecosystems will be essential for partners to stay competitive.

Partnership Compensation Plans

With these insights into the partnership landscape, let’s explore compensation plans that incentivize the behaviors and drive the results predicted for successful channel partners.

Think of partnership compensation plans in the same way you would business development: it’s an investment.  

Just like you incentivize your sales team to close deals, a well-designed partnership compensation plan motivates your partners to promote your product or service actively, ultimately driving growth for your entire ecosystem.

Remember that how you structure reseller partners’ compensation will differ from that of referrals from technology partners.

“If it’s a referral, you’re paying the partner something,” said Graham Collins, QuotaPath Head of Partnerships. “So, you might end up paying a collective 20% to honor 10% for the referral from the reseller and another 10% to your sales rep who closes the deal.”

Other things to keep in mind from Graham:

• The base:variable pay split is normally in the 65:35 range for in-house Partnership roles
• The commission rate will vary because it depends on how much of your revenue stems from partnerships
• When paying the referral fee, it’s best practice to keep the commission rate for your sales rep the same (versus lowering it for this scenario)
• Resellers will earn a higher commission rate because the commission stack is lower (you’re not involving sales reps from your side)
• Pay them consummate with the work they are doing for it

New Partnership Team Comp Plan

First, we have a comp plan structure for a new partnership team. 

In our experience, new partner organizations earn compensation according to the number of new partners they get. This could take form based on new partners signed or new partners submitting their first lead. 

Example: Single-rate Bonus (flat fee)  X$ per partner

The New Head of Partnerships receives $500 per partner with a target of adding five partners per month. Again, this could be based on the Head of Partnerships singing them on as a partner or timed with the action of a new partner submitting their first lead to your organizaiton. 

Mature Partnership Team Comp Plan

Once your partnership team matures, it’s time to base their bonus on a pipeline component. This could be according to the number of demos booked via your partner channels.

After that, you’d move to revenue generated from partner channels. 

Add pipeline component – no. of demos booked, then move to revenue generated

“As the partner org. matures even further, and you figure out what good customers and partners to create these with. That’s when you measure revenue sourced/influenced by partners,” said Graham.

Getting in on Partnerships

Crafting a successful partnership compensation strategy requires a careful balance of motivation, alignment, and measurement. 

By understanding your organization’s unique goals and the dynamics of your partner ecosystem, you can design a compensation plan that drives growth and fosters long-term partnerships.

Consider leveraging specialized tools and expertise to maximize the effectiveness of your partnership compensation strategy.

QuotaPath offers comprehensive solutions for managing complex compensation plans, including partnerships. Our platform provides the data, insights, and commission automation needed to optimize your partner incentives and drive exceptional performance.

Let’s connect to discuss your specific needs and explore how QuotaPath can help you achieve your goals.

According to our compensation data, 91% of teams missed sales quota last year.

Market conditions were the leading reason, along with misaligned sales activity and unrealistic quotas or sales goals.

All of which relate to the sales quota.

The pressure to hit these targets can be immense, leading to demotivation, burnout, and ultimately, a revolving door of sales reps paired with missed revenue goals. 

That’s where we come in, with years of experience partnering with organizations to build fair, realistic, and aligned compensation plans and quotas.

In this blog, we’ll explain a step-by-step process for setting quotas. This will ensure that your quotas are both challenging and attainable, keeping your team motivated and on track for success. 

Best Practices Before Setting Your Sales Quota

As you prepare to set your sales quotas, leverage these proven techniques to improve your success.

Gather Historical Data and Market Insights:

• Analyze past sales performance data to understand trends and baselines.
• Research current market conditions and competitor activity.

Set SMART Goals:

• Specific: Clearly define what the quota represents (e.g., revenue, units sold).
• Measurable: Establish quantifiable metrics to track progress.
• Attainable: Set ambitious yet achievable targets based on data and market insights.
• Relevant: Align quotas with overall sales goals and company strategy.
• Time-Bound: Define a clear timeframe for achieving the quota (e.g., quarterly, annually).

Consider Team Input and Collaboration:

• Involve your sales team in quota discussions to gather feedback and foster ownership.
• Facilitate discussions about individual and team goals to ensure alignment.

Account for Territory and Product Variations:

• Adjust quotas for different territories based on market size, customer base, and sales complexity.
• If applicable, tailor quotas to account for varying product lines with different price points and sales cycles.

Factor in External Influences:

• Be prepared to adjust quotas based on unforeseen market shifts or economic changes.
• Consider seasonal trends that might impact sales performance within specific timeframes.

Communicate Clearly and Transparently:

• Clearly explain the rationale behind the quotas to your sales team.
• Regularly communicate progress and provide ongoing support throughout the sales cycle.

Review and Revise as Needed:

• Monitor performance regularly and be ready to adjust if necessary.
• Conduct periodic reviews to assess the effectiveness of the quota and fine-tune for future periods.

Steps to Set a Sales Quota

Now you’re ready to set your sales quota.

There are various types of revenue and non-revenue quotas, with revenue quotas being the most common. Follow these steps to set your revenue-based sales quotas.

1. Calculate revenue targets based on OTE

Sales reps must generate sufficient revenue to pay for themselves including such costs as base salary, benefits, overhead, and commission. The revenue target should equal some multiplier of the salesperson’s on-target earnings (OTE).

We typically recommend a quota multiplier between 3x and 8x of your team’s OTE. However, the multiplier varies based on industry, experience, location, and company size.

For example, if your salesperson is a mid-level SaaS rep who has a $120K OTE. Using a commonly used 5x OTE, would result in an annual quota of $600K.

Next, you must decide whether your quota is monthly, quarterly, or annual.

2. Determine quota period

When setting quota frequency, consider the sales cycle length, average sales price, and company stage.

Our research revealed that companies commonly rely on average sales price and sales cycle length to determine quota periods with quarterly cycles being most frequently selected.

Factoring in the company stage typically leads to longer quota periods for older and established companies, and shorter quota cycles, such as monthly, for startups to create a sense of urgency with their reps.

Using the example of the rep with a $120K OTE, a $600K annualized quota translates to a $50K monthly or $150K quarterly quota.

3. Confirm the quota is achievable

Setting a quota is not an exact science, therefore it’s typically necessary to assess for effectiveness and adjust accordingly.

Sales quotas need to be challenging but attainable. If they are too high, your sales team may become demotivated or simply stop trying to achieve it, and they may choose to leave.

We’re not saying that 100% of your team members should hit quota, a good standard is 80% of reps hitting it each period. This usually results in the overall team hitting quota as top performers make up for laggards.

How do you determine how achievable your quotas are? For instance, take the $50K monthly quota from our earlier example. If your salespeople average $25K per month in sales, the quota or OTE may be too high. However, if your team members average $75K per month in sales, the quota may be too low.

Bear in mind that companies experiencing high growth or low growth are more likely to experience these ‘overpayment’ or ‘underpayment situations due to an ever-changing marketplace, according to Alexander Group. This is especially true when the company is striving to encourage additional growth by setting aggressive quotas and may lead to fewer reps hitting quota.

Comp Plan Evaluation

Take the 1-minute evaluation to get a grade on your existing compensation plan.

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What To Do If Your Quota Is Wrong

Unachievable or “wrong” quotas stem from various factors such as data misinterpretation, market shifts, lack of team input, low team morale, and high turnover. Once you recognize that you have the wrong quotas, you can take measures to adjust them.

Take action by:

• Reviewing sales data to identify trends and pinpoint areas of deviation. Make sure you consider external factors in addition to the obvious internal factors. For instance, market volatility and competitive changes must be considered in addition to individual and overall team performance.  

• Holding open communication between sales reps and leadership through scheduled meetings. Discuss concerns, present data-driven evidence of quota inaccuracies in 1-to-1 and team meetings, and gather feedback about how reps believe the plan can be improved. Then, incorporate that feedback when adjusting your quota structure.

• Evaluating other solutions outside of adjusting quota. Sometimes, the solution lies outside the quota. Provide the team with additional resources, coaching resources, or revised timelines. For instance, individual team members may need additional coaching to develop their closing skills or improve their discovery calls to meet or exceed their quotas.

Resources to Help

Setting effective sales quotas is essential to achieving business objectives. Leverage our best practices to improve your success as you prepare to set a sales quota. This includes proactively gathering data, insights, and team input, as well as accounting for territory and product variations and external influences.

Then, follow our simple three-step process for setting a sales quota. If your quota is incorrect, identify the root causes and address them accordingly.

These additional tools will help with your comp plan and quota designs:

• Compensation Plan Templates 
• Quota:OTE Calculator
• Sales Funnel Calculator

Schedule time with a team member, or check out QuotaPath with a free trial to run and manage sales compensation more efficiently. 

Spiff program management refers to the design, strategy, and execution of SPIFFs (short for sales performance incentive fund formula) to maximize sales revenue during a set period. It’s a common tactic adopted by revenue teams with powerful outcomes.

Well-designed spiff programs can boost sales by up to 20%. 

Remember that fast-start spiff that rewarded your sales team with a nice bonus for closing deals the first week of the quarter to distribute revenue? 

It felt good, right? 

While incentive designs like spiffs hold immense potential, poorly managed programs can lead to confusion, administrative headaches, and loss of appeal with your reps. In some cases, spiffs can hinder sales performance. 

Effective program management and optimization are the keys to unlocking the power of spiffs. 

This blog highlights best practices for implementing successful spiff programs, including clear communication, leveraging technology, and celebrating achievements.  

Do SPIFs work?

Nearly every sales organization runs sales performance incentive funds (SPIFFs) throughout the year. But do they work? Learn when and how to use them effectively.

Take Me to Article

Best Practices for Spiff Program Management

When designed strategically, we’ve established that spiff programs can be powerful tools for employee motivation and driving accurate results. But simply throwing out a spiff and hoping for the best isn’t a recipe for success. 

The true magic lies in effective program management.

This section will delve into the key best practices for ensuring your spiff programs are well-organized and transparent, ultimately achieving the desired impact on your sales team and bottom line. 

Follow these best practices to solidify your sales rewards programs.

 Spiff Ideation

First, you’ll want to carefully craft out what the spiff is and what you hope it accomplishes.

• Align Spiffs with Business Objectives: Don’t create spiffs in a vacuum. Ensure they directly tie into your overall sales goals and strategic initiatives. Is there a product line that needs a push?  Are you trying to close deals with a specific customer segment?  Design your spiff to incentivize behaviors that directly contribute to achieving these goals.
• Simplicity is Key:  Spiffs shouldn’t be complex puzzles for your sales team to solve.  Keep the program guidelines clear, concise, and easy to understand. This includes clearly defining the target actions, outlining the reward structure, and setting achievable targets. A confused salesperson is a disengaged salesperson.
• Offer Compelling Rewards: The reward is what motivates the behavior. While financial incentives are common, consider other options as well. Think about what would truly excite your sales team. This could be exclusive experiences, additional paid time off, recognition on a leaderboard, or early access to new products.

Communicating Program Details to the Team

The next thing to keep in mind is communication.

Your sales team needs to understand every aspect of the program, from its goals and objectives to the actions that will earn them rewards. 

Here’s how to ensure your communication is transparent and leaves no room for confusion:

• Clearly define program goals and objectives: Right from the start, explain the “why” behind the spiff program. What are you hoping to achieve with this initiative? Is it to increase new product line sales, incentivize upselling, or shorten sales cycles? By understanding the program’s purpose, your team will be better equipped to align their efforts and maximize their earning potential.
• Outline eligible products, services, or activities: Don’t leave your sales team guessing what qualifies for a spiff reward. Clearly outline the specific products, services, or activities that trigger a payout. This could be closing deals above a certain value threshold, selling specific product bundles, or onboarding new customers within a set timeframe.
• Specify reward structures and timelines: Reward transparency is key to motivating participation. Detail the exact payout structure for achieving the defined goals. Will it be a flat fee, a commission percentage, or a tiered reward system? Additionally, communicate the timeframe for earning and receiving rewards. Knowing when they can expect to see the fruits of their labor keeps your team engaged and focused.
• Communicate program rules and expectations: Lay out any specific rules or limitations associated with the program. Are there any exclusions or blackout periods? Is there a minimum participation requirement? Review these details to avoid misunderstandings and ensure everyone is on the same page.
• Use multiple communication channels: Don’t rely on a single announcement to convey the message. Utilize a variety of channels to reach your sales team. This could include sending a comprehensive email outlining the program details, presenting the information during a sales meeting, and posting the guidelines on your company intranet for easy reference.

 Leveraging Technology for Efficiency

Third, remember that technology is your friend and can make tracking, communicating, and executing spiffs easier.

Here’s how QuotaPath empowers you to leverage technology for seamless spiff program management:

By leveraging QuotaPath’s powerful features, you can streamline spiff program management, save valuable time and resources, and drive higher sales performance through a motivated and engaged sales team.

Celebrating Success and Rewarding Participants

Now for the fun part.

Remember, spiff programs aren’t solely defined by revenue-related sales success. Spiffs contribute to your team’s motivation, competition, and recognition culture.

For your spiff initiative to shine, you have to celebrate and reward your team in engaging ways. 

Here are a few ideas to do so:

• Public Recognition: Don’t underestimate the power of a public “shout-out.” Acknowledge top performers at team meetings, company-wide announcements, or even social media posts (with their permission, of course!). This public recognition validates their hard work and inspires others to strive for similar achievements.
• Leaderboards and Gamification: Inject some friendly competition into your spiff program with leaderboards that showcase top performers in real time. Consider incorporating gamification elements like points, badges, or virtual trophies to add an extra layer of fun and motivation.
• Tiered Rewards: Structure your rewards program with different tiers based on performance levels. This incentivizes continuous improvement and allows everyone to feel a sense of accomplishment as they progress through the tiers.
• Experiences Over Things: While traditional gifts and merchandise have their place, consider offering unique experiences as rewards. Think weekend getaways, tickets to sporting events, or personalized training opportunities. These create lasting memories and demonstrate your genuine appreciation.
• Instantaneous Rewards: Positive reinforcement works wonders. Offer instant rewards, like gift cards or bonus commissions, to help you achieve specific milestones. This provides immediate gratification and fuels continued effort.

Use spiffs to foster a culture of collaboration and knowledge sharing. Recognize not just individual achievements but also team victories and instances where team members supported each other’s success. This reinforces the importance of teamwork and creates a positive and motivating environment.

By implementing these strategies, you can transform your spiff program from a transactional system into a powerful tool for boosting morale, driving engagement, and celebrating the achievements of your sales team.

7 Spiff Examples for your GTM Team

Ready for some examples to consider for the rest of the year?

Below are seven creative spiff ideas designed to incentivize desired actions, celebrate achievements, and cultivate a positive sales environment while ensuring your spiff program complements, not replaces, a solid compensation plan.

1. Fast Start: Motivate your team to hit the ground running at the beginning of a quarter by offering a bonus commission (e.g., $100-$200) to the first X number of salespeople who close deals within the first week. This will jumpstart activity and set the tone for a strong quarter.

2. Upsell & Cross-Sell: Encourage expanding customer value by rewarding salespeople who achieve the highest number of upsells or cross-sells within a specific timeframe. This metric could be tied to revenue generated from upsells/cross-sells or the number of successful upsells/cross-sells completed.

3. Outbound Pipeline: Focus on building a healthy sales pipeline by rewarding the salesperson who adds the most outbound qualified leads to the CRM within a set period. This incentivizes proactive prospecting and ensures a steady flow of potential customers.

4. Mid-goal Milestone: Break down larger sales goals into smaller, achievable milestones. Offer a tiered reward system in which salespeople receive a bonus (e.g., a gift card, or an extra vacation day) for reaching specific milestones toward their overall quota. This keeps them motivated and provides a sense of accomplishment as they progress.

5. Retention: Customer retention is crucial for SaaS businesses. Recognize the salesperson with the highest customer retention rate within a specific period. This could be a bonus commission or a reward tied to the value of retained accounts.
   
6. Onboarding: A smooth onboarding experience is critical to customer satisfaction. Reward the salesperson whose new customers score the highest customer satisfaction during onboarding. This incentivizes them to prioritize a positive onboarding experience.

7. Teamwork: Create a team-based spiff to encourage collaboration and knowledge sharing. Offer a bonus or reward for the team that collectively achieves the highest sales target within a timeframe. This fosters a sense of camaraderie and motivates everyone to contribute to the team’s success.

Lessons Learned from Spiff Program Failures

Lastly, spiffs can be a game-changer for your sales team, but even the most well-intentioned programs can fall flat. Here are some key lessons learned from common spiff program failures to help you avoid these pitfalls:

• Misaligned Goals: Ensure your spiff program incentivizes behaviors directly contributing to your overall sales strategy. Don’t reward activity metrics that don’t translate to actual sales or long-term customer value.
• Unclear Communication: Clearly communicate all program details, including eligibility criteria, reward structures, and timelines. Ambiguity breeds confusion and frustration among your team.
• Unrealistic Targets: Setting unattainable goals can quickly demotivate your team. Balance ambition with achievability to ensure everyone has a fair shot at earning rewards.
• Overly Complex Programs: Keep your spiff program clear and easy to understand. Complex rules and calculations will create confusion and discourage participation.
• Lack of Transparency: Maintain transparency throughout the program. Share updates on leaderboards regularly and ensure everyone understands how rewards are calculated and awarded.
• One-Size-Fits-All Approach: Cater to individual preferences whenever possible. Offer various reward options to appeal to different motivators within your team.
• Short-Term Focus: While spiffs can provide a quick boost, consider the importance of long-term goals. Integrate your spiff program with your overall compensation plan for a holistic approach.
• Neglecting Recognition: Rewards are important, but take into account the power of public recognition. Celebrate achievements and acknowledge individual and team contributions.
• Poor Measurement and Tracking: Track key metrics to measure the effectiveness of your spiff program. Analyze data to identify what’s working and adjust accordingly to optimize future iterations.

By learning from these common pitfalls, you can design a spiff program that effectively motivates your team, drives desired sales behaviors and contributes to overall sales success.

Use QuotaPath to Simplify Your Spiff Program Management

We’ve explored the power of creative spiff programs to incentivize your team, celebrate achievements, and foster a positive sales environment. However, remember, spiffs are most effective when they complement, not replace, a solid base compensation plan.

You can design a spiff program that motivates your team and drives results by avoiding common pitfalls like misaligned goals, unclear communication, and unrealistic targets. Remember to prioritize clear communication, transparency, and various reward options to cater to different preferences. Track your program’s effectiveness and integrate it with your overall sales strategy for a holistic approach.

Implement spiffs with automated tracking

QuotaPath, the most adaptable commission tracking software on the market, offers a comprehensive sales performance management platform to streamline spiff program administration.

Our user-friendly interface makes creating, managing, and tracking your spiff programs easy. It ensures clear communication, real-time updates, and effortless reward distribution. Explore QuotaPath today and see how we can help you design and implement a spiff program that delivers actual results.

This is a guest blog from the data and AI company, Databricks.

Sales forecasting is supposed to make everyone’s lives easier. Sales and marketing have their targets. Customer services and accounting understand workloads and expected revenue. Despite this, a report found that 68% of companies miss their sales forecast by more than 10%.

Why such a huge discrepancy? Businesses aren’t using the right data or nearly enough of it. 

AI lead scoring is a strategy that improves forecast accuracy and empowers your organization with more efficient sales and marketing activities.

In this article, we’ll explain how AI lead scoring can benefit your business.

What is AI Lead Scoring?

AI lead scoring uses machine learning (ML) and predictive modeling to rank sales prospects. Data such as demographics and customer behavior train AI models. The AI then identifies the trends and patterns of your target audience. AI lead scoring drives marketing and sales optimization.

Data processed in AI lead scoring includes:

• Customer personal information
• Firmographics such as company size
• Engagement with emails and marketing campaigns
• Social media interactions
• Psychographic data such as interests and cultural beliefs
• Loyalty data, including purchase history and customer loyalty metrics

Image sourced from close.com

Using this information, the AI algorithms quickly identify the potential of each lead by assigning them a score. Lead scoring turns your sales pipeline into a cascading sales funnel of momentum. 

Traditional vs AI Lead Scoring

Traditional lead scoring has been around for about as long as the sales funnel has been a concept. It requires a hands-on, manual process from both sales and marketing professionals. 

Much of the scoring information comes from lead magnets. What is a lead magnet in marketing? It’s that free ebook or email newsletter you get prospects to sign up for.

Team members must seek out categorical information and rank it against baselines before assigning a score. The baselines typically come from ideal customer profiles (ICPs). Much of the scoring is down to the subjectivity of the person doing the ranking, and liable to human error.

Because AI uses historical data for accurate results, AI-based solutions allow organizations to automate and improve efficiencies in the sales pipeline.

AI lead scoring reduces the need for salespeople to be involved in the ranking process. It helps to eliminate human error, emotion, and bias from lead scoring. 

Let’s look at a breakdown comparing AI and traditional lead scoring:

The benefits of AI Lead Scoring

It takes considerable effort to set up an AI lead-scoring strategy. Is the ROI worth it?

Let’s take a look at some AI lead-scoring benefits:

• More accurate, less biased lead scoring: AI calculates without emotion or prior influence. The algorithm connects the dots to find quality leads that your team might miss.
• Reduced human error: automation reduces errors associated with manual entry such as duplicates.
• Increased flexibility: train models with new datasets to adjust for changing market trends. Lead scoring also scales with need without increasing the workloads on your team.  
• Saved time: automation reduces the need for manual lead scoring, increasing sales productivity. Your sales and marketing teams can spend more time engaging potential customers and growing your pipeline.
• Increased profits: your team focuses on the best leads for higher conversion rates.
• Integrated with business tools: connect your CRM, ERP, and other platforms for analysis and more precise modeling. Use scoring data in real time for more accurate demand planning and sales forecasting.
• Streamlines processes: AI not only enhances sales-related processes but also reduces manual workloads across various departments, such as inventory management and accounts payable, improving overall operational efficiency.
• Lower costs: eliminates manual scoring, reducing your labor overheads.

How AI optimizes sales forecasting

Sales forecasting is vital to your business’s strategic planning. It helps you better allocate resources and budget expenditures based on revenue projections. 

So how does predictive AI improve forecasting?

Precision of data-driven insights

AI lead scoring requires large volumes of data. While this can take some initial work, it pays off in dividends. Behavioral analytics offer new insights into your target audience and how to better engage with them. 

Predictive analytics also produce opportunities such as personalized marketing. AI-powered insights help your team tailor each interaction for a better customer experience and higher win rates. 

Record every touchpoint for more accurate lead scoring and forecasting.

For example, a recent survey of marketers identified aligning web content with search intent as the most effective use case for AI. With automated lead scoring, you can discover which pages to audit and which to leave alone.

Let’s say you have a landing page for your certification for data engineers course. Automated lead scoring shows that most visitors are data scientists, creating a mismatch. Your marketing team takes this insight and audits the page for better SEO keywords. 

You can flag the lower-performing pages for search engine optimization using data-driven insights. You can consider your new SEO strategy when generating your next sales forecast.

Better lead scoring

AI models identity patterns from data your sales team simply doesn’t have access to or the bandwidth to process. For example, website user behavioral data connects to your AI lead scoring. The algorithm identifies high-quality leads based on their browsing behavior.  

Better lead scoring will improve your sales numbers. It will also give you a more accurate idea of what’s happening in your funnel. Use this data to bolster your short and long-term sales forecasts.

Connection between marketing and sales

Lead scoring provides a pulse check on your sales pipeline. With human error and bias eliminated, there’s no one to point the finger at. AI lead scoring aligns marketing and sales with the cold, hard facts. 

Accurate lead scoring gives both teams a common system and promotes inter-departmental collaboration. To maximize the benefits of this alignment, it’s often necessary to hire marketers who are skilled in interpreting AI data and executing effective strategies. This can help increase lead quality and improve sales forecasting is in each department’s best interests.

Real-time predictions

AI lead scoring begins as soon as a prospect enters your pipeline. With each interaction, their score changes, becoming more precise.

All ranking data feeds into other business tools, such as sales forecasting. Over time, models adapt for greater accuracy, sending better data to those tools. In other words, the more data your AI lead scoring analyzes, the more accurate it becomes at predicting sales. 

It also helps you make more money. A recent survey found that 80% of global businesses saw increased revenue after implementing real-time data.

How to implement predictive lead scoring with AI

Customers interact with your brand in a wide variety of ways. When they enter the pipeline, you’ve already got ample information about their likelihood to make a purchase. However, you need to learn how to crack the code and decipher customer intent.

How do you put together a lead or account scoring strategy led by predictive AI?

1. Identify target audience

Sales team marketing tactics begin with knowing your target audience. Collaborate with your marketing and sales teams to create ideal customer profiles. You can base ICPs on market research and historical data but there may be a bit of guesswork at the beginning. 

What type of characteristics make up your ideal customer? Create specific details for each profile based on the following criteria:

• Demographics: age, gender, education, income, occupation, household size, geographic location
• Firmographics (B2B): company size, turnover, revenue, industry, existing tech stack, location
• Lead behavior: touchpoint interactions, marketing engagement, past purchase history
• Psychographics: values, attitudes, interests, buying habits
• Pain points: what challenge does your product solve for this customer?

For example, let’s look at an ICP for a company that provides marketing and sales automation:

• Businesses with 100+ employees
• Annual turnover exceeding 10 million dollars
• Multiple outbound sales channels
• Three-month buying decision process
• Ability to call international numbers with a local presence

Remember these are ideal customer profiles. Not every lead will be a perfect fit. It’s still up to identify the best opportunities—that’s where lead scoring enters the picture!

2. Gather data

You can’t start ranking new leads without any data. What sources of information will help you (or the AI) determine the value of a lead?

Build a data collection strategy that aligns with your ICPs, pulling in the right data from every relevant channel.

Some sources for lead scoring data include:

• Websites: track visitor activity while interacting with your web pages. Tracking pixels and cookies identify repeat visitors. You can also use website forms to gain contact information and other demographic details. Heatmaps and session recordings add another level of insight into user behavior.
• Business tools: customer relationship management (CRM) software and other apps are great sources.
• Social media: use a social media analytics tool to record prospect engagement rates and gather firmographic data. Incorporating a social media post generator can automate content creation, ensuring consistent engagement and data collection.
• Content marketing: email marketing tools and other solutions enable you to track clicks, open rates, and conversions for every prospect.
• Lead source: the origin of each lead is vital to lead scoring. Organic website traffic will have a different win rate than a customer referral. If historical data is scarce, consider using a Bayesian Neural Network (BNN) to make the most out of every dataset. You will use this data to train and evaluate your predictive model later on.
• Spam detection: not every interaction adds up to a positive. Some leads can be bots or disinterested users. For example, a freelance writer may have no use for your sales dialer, but they do want access to your most recent industry report.
  

3. Segment your leads

The goal of any lead scoring system is to evaluate potential customers for fit and interest. We can divide this into four basic categories: avoid, Stimulate Interest, Follow up, and Take Orders. 

The beauty of lead scoring is that you get a more granular classification of every lead, streamlining customer segmentation. A typical system uses scores from  0 to 100 or 0 to 1. You can usually adjust this to what works best for you. 

Prioritize scoring criteria in order of what you think is most valuable. Give more weight to the top factors by making them worth more points. As you move down the list, decrease the weight score for each category. 

If every box is ticked on an ICP, the lead score should add up to 100.

4. Set a lead score threshold

Your ideal customers are just that, ideal. These types of businesses or individuals are the unicorns your sales and marketing teams dream of. Here in the real world, you compromise on what prospects to spend your time and money on. 

Looking at the data so far, it’s time to set a minimum lead score. This will be the threshold for the “Avoid” category. Any lead that falls below this score can’t be ignored and forgotten. 

Start with a low threshold. This ensures you don’t miss out on opportunities, and soon, the predictive AI will hone in on an optimal score.

5. Train your AI model

Okay, so you have the foundation of a lead scoring system in place. The good news is that you aren’t going to rely on your team to manually tally up every individual score. It’s time to train your predictive AI.

Use separate data sets to train your AI. The first set will teach the AI as it looks for patterns. You will use the second set to test the accuracy of your trained AI.

The AI training process for lead scoring is as follows:

1. Gather historical customer and market data and form two sets of data.
2. Clean and process the data, removing duplicates and errors.
3. Train the AI with dataset one.
4. Test the AI with dataset two and evaluate for accuracy.
5. Deploy the model and start generating lead scores.
   
6. Monitor results and adjust

Now your AI lead scoring model is putting out scores nearly instantaneously. Sounds great, right? However, it’s time to evaluate the results. Use your CRM and sales analytics tools to monitor the results.

Key performance indicators (KPIs) to track include:

• Conversion rate
• Win rate
• Lead-to-opportunity ratio
• Sales velocity
• Revenue
• Customer lifetime value
• Lead score accuracy

Establish a baseline for every metric before implementing an AI solution. Compare the results. If performance is decreasing or staying put, it’s time to re-evaluate your lead scoring model. 

Use AI Lead Scoring to win more sales

Growth is great. When your business increases its total sales, everyone is busy. However, you don’t want to stretch your team out too thin. AI lead scoring ensures every prospect is rated fairly and without bias, saving your team valuable time. 

You can focus your resources on the best opportunities while preventing potential buyers from slipping away. Setting up an AI lead scoring system for your business takes time, but it’s worth it in the long run.