Commission payouts are essential for driving sales performance, yet 80% of companies have paid their reps incorrectly at some point.

Is this correlated to the fact that our biggest competitor is the spreadsheet?

We’d like to think so.

More Stats on Comp Challenges

Read the full report on Solving the Biggest Sales Compensation Challenges.

Read Report

For Keegan Otter, Head of Revenue at Warmly, managing commissions manually in Google Sheets worked—until it didn’t.

“What started as a small problem grew as we scaled. I went from spending an hour on commissions to multiple hours, and then the errors started creeping in,” Keegan said. “My CEO would audit it and catch something. Then Biz Ops would catch something we missed. When three sets of eyes are missing errors, that’s when you know there’s a problem.”

Warmly’s team expanded from three reps to over 30 in just two years. 

As commissions became more complex, manual processes led to payout errors, misalignment, and wasted time—valuable hours that could have been spent driving revenue.

“When it comes to commissions, you don’t want to get it wrong. You’re dealing with people’s paychecks,” said Keegan. “My anxiety skyrocketed as I spent more time troubleshooting, double-checking formulas, and answering Slack messages about payouts. At that point, I knew we needed to automate.”

Why Automation is Essential for Growth

For companies like Warmly, automating commissions isn’t just about saving time—it’s about reducing costly errors, improving transparency, and boosting sales performance.  

Having an automated, audit-ready system is no longer optional—it’s a necessity.

“Before QuotaPath, commissions were a black box,” said Keegan. “The reps had no visibility, and even leadership was surprised at the final payouts. Now, our team sees exactly what they’ll earn as they close deals, which builds trust and motivation.”

Beyond accuracy, automation saves significant time. Instead of spending 5+ hours per month troubleshooting commissions, Keegan and his leadership team can now focus on strategy and revenue growth.

“QuotaPath has saved us a lot of money just in executive time alone. If you take my salary, the CEO’s salary, and our Biz Ops manager’s salary—and then factor in the hours we were spending troubleshooting—it’s a huge cost saving,” said Keegan. “And that doesn’t even include the value of being able to actually forecast commissions correctly.”

By replacing spreadsheets with an automated solution, Warmly streamlined operations and strengthened sales culture. Reps know what they’re earning, leadership has full visibility, and commissions are processed quickly and accurately.

If your team is still manually managing commissions, it’s time to consider the ROI of automation.

The ROI of Commission Automation

For companies like Warmly, automating commissions was about reclaiming time, reducing costly errors, and building a more transparent sales culture. 

When a simple process becomes a bottleneck, it slows down the business and erodes trust.

Keegan summed it up best: “When it goes from taking an hour of my time to two to three hours—and then the back-and-forth in Slack takes even more time—you realize it’s just a bubbling problem that shouldn’t exist,” said Keegan.

QuotaPath solved that problem, delivering measurable ROI in three key ways:

Saves Time

Before implementing automation, commission tracking often requires:

• Exporting CRM data
• Adjusting spreadsheets
• Cross-checking deal terms
• Manually validating earnings

Keegan lived this process firsthand, spending hours in Google Sheets reconciling payouts.

At first, it was manageable. But as Warmly scaled, so did the complexity.

“What used to take me maybe an hour and a half started taking multiple hours. And it wasn’t just my time—it was my CEO’s time, Biz Ops’ time, and then even more time going back and forth in Slack. It wasn’t sustainable.”

With QuotaPath, Warmly eliminated this manual work.

Real-time calculations now ensure commissions are accurate from the start, reducing the need for troubleshooting and audits. Instead of firefighting errors, Keegan and his leadership team can focus on revenue-driving initiatives.

“QuotaPath gave me hours of my time back every month. Now, I don’t have to stress whether the math is right—it just works.”

Reduces Errors

Additionally, manual commission tracking is prone to mistakes, and Warmly wasn’t immune. 

As the team scaled, so did the risk of payout discrepancies.

“I’m not a mathematician—I have a PR degree,” said Keegan. “But you don’t want to get it wrong when it comes to commissions. And once we had 35 reps, there was no way I could do this in Google Sheets without making mistakes.”

With QuotaPath:

• Payouts are ASC-606 compliant and audit-ready
• Data syncs directly from the CRM, eliminating manual entry mistakes
• Leadership has full visibility, preventing last-minute payout surprises
• Leaders can use comp to drive sales revenue

Fosters Transparency & Motivation

Lastly, when commission calculations happen behind closed doors, reps are left guessing their earnings. 

That lack of visibility creates uncertainty and, even worse, shadow accounting.

“That’s not a good way to run a sales team,” said Keegan.

QuotaPath changed that. 

Warmly’s reps see their commissions in real time as deals close, reducing disputes and increasing motivation.

“Now our team can see, ‘If I close this deal, I’ll earn this much.’ That builds trust. And when reps trust their comp plan, they focus on closing more deals instead of second-guessing their pay,” said Keegan.”

With QuotaPath, commission automation doesn’t just improve accuracy and efficiency—it strengthens company culture by ensuring everyone, from reps to executives, is aligned and informed.

How QuotaPath Delivers ROI Through Commission Automation

Saving time, reducing errors, and increasing transparency are game-changing for any sales organization.

But the real power of commission automation comes from seamless integrations, intuitive plan-building tools, and smarter payout processes—all of which ensure sales and finance teams stay aligned. 

For Keegan and Warmly, these were key factors in choosing QuotaPath.

“We’re a startup—our comp plan this quarter might slightly change next quarter,” said Keegan. “I needed something easy to adjust and manage myself. When I talked to QuotaPath’s CEO, he asked me what I had today in spreadsheets and showed me exactly how simple it would be to transfer over. That gave me confidence.”

Seamless CRM and Payroll Integrations

Data silos and manual exports create inefficiencies that slow down commission payouts. QuotaPath eliminates these roadblocks by integrating directly with leading CRMs and payroll platforms, including Salesforce, HubSpot, Rippling, Xero, and Microsoft Dynamics 365.

For companies like Warmly, this means eliminating the need to cross-reference spreadsheets with CRM data, ensuring real-time syncing of deal data to improve accuracy, and pushing payouts directly to payroll to remove manual entry errors.

“I know where my closed-won revenue lives in the CRM,” said Keegan. “So when I started using QuotaPath, I wanted it to map directly to that data. Once we connected everything, it became a true set-it-and-forget-it system.”

AI-Powered Plan Builder: Faster, Smarter Compensation Design

For high-growth companies, like Warmly, compensation plans are not static. Rather, they evolve as headcounts grow and incentives shift. 

QuotaPath’s AI-Powered Plan Builder makes building, adjusting, and optimizing compensation structures easy without requiring specialized RevOps or Finance expertise.

“We might add an accelerator or change our SDR headcount plan from one quarter to the next,” said Keegan. “With other tools, that means a massive implementation fee or complex configurations. With QuotaPath, I can make adjustments myself or have my CSM help in minutes.”

Using AI-powered tools, teams can automatically import compensation structures from spreadsheets, modify plans in real time without developer support, and ensure payout logic aligns with evolving business goals.

Multi-Level Payout Approvals

One of the biggest risks in commission management is premature or incorrect payouts. 

Without proper approval workflows, companies either delay commissions while manually reviewing them or risk paying out incorrect amounts, leading to clawbacks and frustration.

QuotaPath introduces a structured approval process that allows RevOps and Finance leaders to review and approve commission payouts before they hit payroll, automate workflows to reduce Slack back-and-forth and last-minute audits, and provide full visibility into scheduled payouts to ensure leadership alignment.

Sales Rep Dashboards and Performance Insights

For commission plans to drive the right behaviors, sales representatives need real-time visibility into their earnings. Before using QuotaPath, many teams struggled with a lack of transparency, leaving reps unsure of how much they had actually made.

“The transparency that we have back to the team is fantastic,” said Genevieve Moss-Hawkins, Systems Operations Senior Manager at NeuroFlow. “Being able to look at what they have in pipeline and forecast what they would make if certain deals were to close—and then all the way through to when they close the deal, seeing exactly how the commission was calculated—has been met really well by our team.”

QuotaPath tracks quota attainment, helping representatives see how close they are to hitting targets.

 It also offers visibility into accelerators and bonuses, upcoming payout projections to prevent last-minute surprises, and earnings forecasting to support strategic pipeline planning.

Why Companies Can’t Afford to Ignore Commission Automation

Manual commission tracking is more than just a time drain—it introduces errors, slows down payouts, and erodes organizational trust.

 As Keegan at Warmly experienced firsthand, what starts as a manageable process quickly spirals into a costly bottleneck as a company scales.

Automation eliminates these inefficiencies, giving teams accurate, real-time commission data, seamless integrations, and the flexibility to adjust comp plans without disruption. Companies that embrace AI-powered commission management are not just improving payroll workflows—they’re creating a transparent, motivated sales culture that drives revenue growth.

The future of commission management is clear. Automated solutions are no longer optional—they are essential for scaling sales.

To see how QuotaPath can improve your commission ROI, book a demo today.

Lead generation is one of the most critical steps of any sales pipeline. 

You’ll have nothing if you put the leads into the wrong pipeline. If you start with the wrong leads in the first place, you’ll throw money down the drain. 

To successfully land new clients and make sales, you need to connect to the right people at the right time with the right message. 

The good news is that once you know where in your sales lead pipeline you’ve gone wrong, you can usually fix it up and start seeing results fast. This guide covers the common pitfalls that cause sales leads to go cold and, more importantly, the solutions that will help fix them. 

Sales Lead Generation: An Overview 

The sale lead pipeline essentially follows these steps: 

1. Prospecting. Here, you seek out leads, whether actively or through creating relevant content and advertisements.
2. Qualifying leads. As we’ll discuss later, not every lead is suitable – so here, you check whether they’re right for you.
3. Meetings and demonstrations. Once you’ve selected the right leads, it’s time to arrange meetings with your sales team.
4. Proposal. The sales pitch – how to help them, why they should choose you, and how much it costs.
5. Negotiation. Sometimes, a lead will agree to the proposal, and you can skip this step. More often than not, there’ll be a period of discussion.
6. Closing the sale. With the terms agreed, you and your customer sign off on the deal.
7. Post-purchase. Communication shouldn’t stop after you’ve made the sale – keep an eye on the account and stay in touch with new content and renewal deals. 

Now, if you indiscriminately try to send every lead down this pipeline, your business will go bankrupt. Not every lead is going to be worth courting. That’s why lead scoring is so essential. 

What is lead scoring? Essentially, lead scoring means ranking your leads based on their likelihood of becoming customers or clients. 

Those who rank high get the red carpet treatment, while a passive approach works best for those who rank lower down the scale. You might wonder why low-scoring leads warrant any effort, but the answer is simple: most brands only see a conversion rate of 3.3%.

The rest of those leads are considered “Out Market” or future buyers. They may not be ready now, but you may convert them later with continued investment in your content and sales strategies. 

This is precisely why businesses typically invest in scalable infrastructure for their operations. Since they know “Out Market” leads can be converted down the line to drive business growth, they choose cloud infrastructure that can quickly adapt to a business’s changing needs as its customer base expands. If you don’t have this yet, check out Azure or AWS, two of the preferred leading cloud service providers. Just don’t forget to make an AWS vs Azure pricing comparison to ensure you choose a provider that also fits your budget.

Types of Sales Leads

The lead type will also impact the pipeline and sales lead strategy you need to use. That’s why you need to be categorizing your leads into one of these four pillars: 

1. Marketing Qualified Lead (MQL): Leads interested in your brand. They might have visited your website or subscribed to your newsletter.  
2. Sales Qualified Lead (SQL): Your sales team will manually select these leads. These leads are often seen as highly likely to convert because they’ve already requested a demo or pricing information.  
3. Product Qualified Lead (PQL): These leads have already engaged with your product, for example, through a free trial or freemium version.  
4. Service Quality Lead: These leads have expressed explicit interest in your services; for example, they might have requested a free quote. 

How Lead Generation is Changing 

Before diving into the common pitfalls and problems faced by sales lead teams, one last thing to remember is that lead generation is changing. 

One of the biggest reasons is that price checking has become commonplace. In a 2022 survey, 83% of customers compared prices between a few sites before purchasing online. 

Since most customers compare prices and features in advance, they’re already coming to you with an idea of the price range and what your competition offers. Since research before purchase is now the norm, your tactics must change. 

Luckily, a few simple but effective solutions can remove common pitfalls from your lead generation campaign. 

Losing Inbound Sale Leads: Problems and Solutions 

Lead generation and acquisition is a critical part of any sales outreach strategy. Knowing where you are going wrong and how to put those wrongs right will immediately help you bring in more leads and close them than ever before. 

This list will cover common problems sales teams have with their inbound and outbound lead generation strategies. 

The Lead Wasn’t a Good Fit for Your Product, Service, or Business

Sometimes, leads aren’t a good fit. This can happen for many reasons.

For example, the lead might: 

• Have accidentally clicked on an ad
• Already have a product/service like yours
• Not be interested in your product/service 

This common pitfall is only really an issue if you spend time or funds trying to land those ill-fitted leads rather than letting them go. 

The Solution 

Just because a lead isn’t a good fit right now doesn’t mean it couldn’t become a solid lead later. An excellent way to avoid investing in unsuitable leads at the wrong time is first to sort your leads into sales suspects and prospects.  

Sales suspects are those who may not yet be qualified leads. The best way to bring those suspects into the pipeline in the future is to continue running brand awareness campaigns and working on increasing your business’ reputation and reach. To ensure these campaigns yield the best results in the first place, track key marketing metrics. This way, you’ll know which aspects of your promotion are working and which aren’t. As a result, you can make the necessary adjustments to reach your marketing goals.   

Sales prospects are those who have engaged in your business meaningfully. This can be a sign-up to your newsletter, a quote request, etc. These prospects are where you should invest your sales teams’ efforts, either through retargeting or outreach. 

Landing Pages Don’t Land Sales 

Another common problem is that the landing page doesn’t win over the customer, leading to high bounce rates and poor ROI for your PPC campaign. 

You will lose the lead if your landing page lacks information or isn’t aligned with the buyer’s intent. 

Let’s say an eco-conscious consumer goes to your landing page to check out the workplace management app you’re selling. If you don’t say it’s an app you can also use to track employees’ commutes and specifically explain how to reduce carbon emission with it, then the consumer will likely think it’s just like the other workplace management apps and look for cheaper alternatives. On the other hand, if you mention this important fact from the get-go, they’ll likely make the purchase then and there.

You may also be seeing high bounce rates because your landing page is: 

• Too slow 
• Not compatible with mobile 
• Not displaying correctly
• Links are broken 

The Solution 

Running A/B testing on landing pages will also allow you to tweak the message and design of your landing page to appeal to your customers. This means you create two versions of the same landing page, each with a different strategy. Then, you’ll compare conversion rates for each page. The page that outperforms the other is the winner. 

Landing pages need to contain everything the customer is looking for, so it’s worth building different landing pages based on the stage of the buyer’s cycle your potential customer is in. 

• A person ready to buy should be taken to either the product page or a buyer’s guide page. 
• A person still looking for solutions to their problem will need a guide or a white paper. 
• A customer who doesn’t know which specific product they’re looking for but has settled on your brand should be sent to either a buyer’s guide or a sales chat.

Creating multiple landing pages and optimizing each will help convert more potential leads (suspects and prospects) now and in the future. 

As a final tip, make sure your landing pages reflect your beautiful brand story. Branding statistics say that 15% of customers will make a purchase then and there if they like the brand story they see. 

You Aren’t Tracking Leads Properly 

Another common reason you may be losing leads is because you simply aren’t tracking them properly. Someone who could have been convinced to buy from you visits your site but then forgets about it, and because you aren’t tracking them, you have no way to make a second introduction. 

The Solution 

Sales lead tracking tools let you monitor and manage every interaction your business has with potential customers. These tools work to track data such as: 

• Website visits
• Content downloads
• Likes/shares/follows
• When an email is opened

While tracking solutions are primarily helpful for inbound lead generation, they can also be useful for outbound. Suppose you have specific details about a prospective customer. In that case, you can invest in email marketing (if they signed up for your newsletter) or use retargeting tools to put your brand back in front of potential customers. 

Combine lead tracking with lead scoring, and you’ll have a comprehensive list of potential leads and how valuable they are to you in the short and long term. 

Why You Lose Outbound Sales Leads (and How to Fix It)

Your sales team may also struggle with outbound strategies. Your direct sales approach (email, cold calls, product pitches, and so on) just isn’t landing with your potential customers. 

Understanding the problem and solutions will help you clean up your outbound sales approach and close more deals. 

Your Sales Team Aren’t Engaged 

Another common reason your business may lose leads is that your sales team isn’t feeling engaged or motivated and, therefore, is not pushing as hard as they could. 

There are many reasons why your sales team doesn’t feel engaged: 

• They are not satisfied with their work 
• They don’t know what to expect, and roles aren’t clearly defined
• They don’t have the tools, equipment, or support to do their job properly
• They don’t receive recognition or adequate compensation for working hard 
• They don’t feel like they can learn or grow at your workplace

On the flip side, businesses that directly address these issues via best practices have significantly higher levels of engagement. 

The Solution 

If you want your sales team to produce stellar results with your outbound strategy, you need to build a thriving work culture that supports them. This means you must give your team the support they need to achieve their personal and professional goals. 

You’ll also want to reward and recognize your sales representative’s efforts properly. This means using tools like Quotapath to track commissions and reward your top performers with what they want in their compensation plans. 

You must provide ample support and guidance for your sales team and easily recognize and reward them based on their efforts and results. This is how you build a motivated sales team that constantly tries to outdo itself. 

Your Sales Approach is Lacking 

If your team’s sales approach is lacking, they won’t be able to close on leads. Potential clients need to trust the sales rep and feel their problems are being addressed directly. If your sales team’s efforts aren’t up to scratch, leads will fall through the cracks. 

Common problems your sales team may face include: 

• The sale took so long to close that the prospective client became disinterested
• The sales pitch was too focused on the product or your brand and not on how it could specifically help the client 
• The lead may perceive your sales rep as unqualified or untrustworthy 
• The lead may simply not understand your brand’s product or service because it wasn’t explained well 

The Solution 

The best way to avoid these issues is to train your sales team. They need to be experts on your product or service to feel like experts. 

You can also have their manager work with each sales rep individually to iron out any kinks and pair them with the best support tools. The goal is to have every sales rep work with their strengths. 

AI, ML, and automation tools can also be powerful. Investing in technological solutions can help automate many aspects of the sales workflow, allowing you to respond faster to leads, send follow up emails automatically, and provide a personalized experience.

How to Improve Your Sale Lead Generation Strategy Further

If you don’t equally invest in your customer retention strategy, you put your hard work at risk. Long-term, loyal customers are invaluable. They cost the least overall yet generate the highest revenue, especially with subscription-based models. A 2023 PYMNTS study found that 30% of loyal subscribers (loyal customers) made up 80% of the merchant’s revenue. 

You can quickly start improving your customer retention efforts with a few key improvements to your operations: 

Improve Ongoing Customer Communication 

While it would be nice if your customers never had a problem with your product or brand, that’s unrealistic. The chance of something causing a problem increases significantly the longer your relationship lasts – especially if you run a subscription-based service. 

That’s why you need to invest in customer service. 

One fundamental way to do that immediately is to improve customer communication methods. For example, you can boost call center customer retention by providing your agents with an AI-powered support tool that makes it easy to assist customers, track calls, and more. 

You can also use chatbots to help customers get the needed information or escalate problems to a human representative. 

Reward Loyalty 

Another easy way to keep customers is to reward their loyalty. You could:

• Lower their price: You can offer membership discounts that increase over time. 
• Offer VIP access: Treat existing customers like VIPs. For example, give them early access to sales or one-on-one training sessions. 
• Offer new value: Include new, high-quality content, products, and services in their subscription or product. This will encourage customers to continue using your brand. 

Final Thoughts

You can quickly address many of the challenges with lead generation by supporting your sales team and aligning your sales and marketing teams’ efforts. Remember to meet your leads where they are and then lead them through the pipeline. 

Creating multiple pipelines for your leads allows you to naturally convert a suspect into a prospect, new customer, or client. Then, you can follow through on those closed deals by improving customer retention efforts. 

Combined, you’ll lose less sales and increase the value of each deal you close. 

Author Bio:

David Becker is a Growth Marketing Manager at Leadfeeder, a powerful website visitor analytics software. He helps drive Leadfeeder’s growth strategies and demand generation with a keen focus on mental health and well-being in the workplace. David excels in creating impactful marketing campaigns, analyzing trends, and boosting customer engagement for the team.

Managing commission payments shouldn’t be a manual, error-prone process. Yet, 72% of companies still struggle with inefficiencies and inaccuracies, leading to delays, frustration, and lack of trust among sales teams.

That’s why we’re excited to introduce QuotaPath’s new integration with Rippling—a seamless connection that automates commission payments from calculation to payout.

For the first time, finance and HR teams can push commission earnings directly into payroll with just a few clicks, eliminating the need for tedious CSV exports or last-minute manual uploads.

Why This Matters

For many businesses, managing commissions means downloading reports, formatting spreadsheets, and manually uploading payout data into payroll systems. This outdated process is slow, error-prone, and frustrating—both for those managing payroll and the sales teams waiting to get paid.

Even worse, 75% of sales reps don’t trust the calculations of their commissions.

This lack of transparency and confidence in the payout process can have a direct impact on sales performance and motivation.

QuotaPath’s integration with Rippling changes that.

What This Integration Does

Automates Commission Payments

No more spreadsheets. No more manual data entry. QuotaPath now sends commission payouts directly to Rippling’s payroll system, ensuring accuracy and compliance.

Syncs User Data for Seamless Access

Rippling users are automatically provisioned in QuotaPath, keeping teams in sync from hiring to offboarding.

Provides Real-Time Commission Visibility

Sales reps, finance teams, and HR see what’s being paid, when it’s being paid, and why, eliminating guesswork and increasing trust.

Simplifies Security & Compliance

With single sign-on (SSO) and automated approvals, finance teams stay in control while removing unnecessary admin work.

The Impact for Rippling + QuotaPath Users

• Saves Hours Every Pay Run
  With payouts flowing directly into payroll, finance and operations teams cut down processing time by 60+ minutes per cycle.
• Improves Accuracy and Reduces Risk
  Automated syncing eliminates the risk of duplicate entries, incorrect payments, or missed commissions.
• Empowers Sales Teams with Transparency
  Reps no longer have to chase finance for payout updates—they can track their earnings in real-time.

Get Started

QuotaPath’s integration with Rippling is fast and easy to set up, so your teams will be up and running in no time.

“This integration has drastically improved our payout process by reducing risk and ensuring accuracy in a fraction of the time,” said Joan Schiffer, Director of Accounting at Virtuous.

Ready to transform your commission payouts?

Schedule a demo to see how QuotaPath + Rippling can simplify your sales compensation process today.

As we move deeper into 2025, the main priorities for mid-stage companies are shifting. 

High-growth metrics like revenue growth rate, annual recurring revenue (ARR), and pipeline expansion once dominated the conversation.

The focus was clear: rapid scaling and capturing market share, often at the expense of efficiency and sustainability. 

However, as economic conditions evolved and investor expectations began changing in late 2022 and throughout 2023, companies have found that this growth-at-all-costs approach is no longer viable. 

Instead, the spotlight remains on profitability and operational efficiency.

This new mindset has brought a different set of sales KPIs to the forefront, emphasizing metrics like customer acquisition cost (CAC), customer lifetime value (LTV), and gross revenue retention (GRR). 

These profitability-driven indicators reflect a broader strategic shift toward retaining high-value customers, maximizing long-term value, and optimizing sales efficiency. 

What’s the cause? Most of it is fueled by rising interest rates, tighter funding environments, and increasing pressure from boards and investors to deliver sustainable results.

In this blog, we’ll share how these changes redefine sales KPIs and compensation strategies for 2025. 

We’ll examine why metrics like retention, efficiency, and unit economics remain the top priorities and provide actionable guidance on aligning your compensation plans to promote sustainable growth. By understanding these trends, your organization can navigate the changing landscape and position itself for long-term success.

The Shift in Sales KPIs: Profitability Over Growth

With tighter capital markets and inflation rates through the roof, what leaders cared about throughout the 2010s significantly differs from today’s landscape. Leaders — especially those in Finance- now scrutinize every dollar spent and prioritize metrics that ensure sustainable growth while minimizing risks.

Below are three of the most common. 

Customer Acquisition Cost (CAC)

In 2025, reducing CAC is a key priority for mid-stage companies. 

As funding becomes less accessible, companies must ensure that the cost of acquiring a customer aligns with their long-term revenue potential.

Lifetime Value (LTV)

LTV has taken center stage as companies aim to maximize the value of each customer relationship. By analyzing LTV trends, sales and RevOps leaders can identify high-retention, high-value customer segments to prioritize.

Gross Revenue Retention (GRR)

Retention is the cornerstone of profitability. GRR measures how much revenue a company retains from existing customers before accounting for upsells or cross-sells. In 2025, expect compensation plans to reward customer success teams and account managers for maintaining and growing GRR.

“Alignment” Most Needed Area of Improvement in Sales Compensation

We asked leaders, “What area of your sales compensation management process needs the most improvement?” 25% reported “alignment to business goals” as the top focus.

Read More

Compensation Strategies That Drive Profitable Growth

The transition to profitability-focused KPIs requires a strategic overhaul, particularly in the structure of compensation plans. 

Aligning these plans with the right metrics ensures that your sales team is incentivized to prioritize sustainable growth over quick wins. 

In fact, our recent report asked leaders, “What area of your sales compensation management process needs the most improvement?”

 25% reported “alignment to business goals” as the top focus. This was followed by improving simplicity, optimization, visibility, and automation. Here are some actionable strategies to ensure your compensation structures support this new focus:

Here are some actionable strategies to ensure your compensation structures support this new focus:

Incentivize Multi-Year Contracts

Multi-year contracts provide predictability and stability in revenue streams, improving GRR and lowering churn. By offering higher commission rates or bonuses for multi-year agreements, sales teams are encouraged to prioritize long-term deals over one-off wins. QuotaPath simplifies the tracking of these contracts, ensuring accurate commission payouts that motivate sales reps.

Learn how to set up multi-year incentives from our VP of RevOps, Marketing, and Sales, Ryan Milligan.

Reward High-Retention Customer Segments

Not all customers are created equal.

Compensation plans should emphasize acquiring and retaining customers with high LTV and low churn risk. 

Offer higher commission rates for your ideal customer profiles (ICPs) or bonuses.

Paying your reps more for customers that give you more long-term is worth it. We recommend using QuotaPath’s AI-Powered Plan Builder to set up ICP bonuses in your plan to drive those selling behaviors. This will enable your reps to see and forecast how much more they make on ICP deals in their pipeline vs. non-ICP and re-direct their attention to those more valuable to the biz. 

Prioritize Upsells and Cross-Sells

Revenue growth from existing customers is often more cost-effective than acquiring new ones. Compensation plans should reward account managers and sales reps for identifying and executing upsell and cross-sell opportunities. 

By leveraging such strategies, you lay the groundwork for a more data-driven approach to managing sales compensation, which is where QuotaPath truly excels

Data-Driven Compensation Management with QuotaPath

A leader in sales compensation management, QuotaPath helps organizations to align their compensation strategies with key business goals. 

By integrating with CRMs like HubSpot, QuotaPath provides real-time insights into earnings, commissions, and sales performance. This level of transparency motivates sales teams and ensures that your organization’s compensation plans drive sustainable growth.

Why Choose QuotaPath?

• Seamless CRM Integration: Sync compensation data directly with your CRM to track KPIs like CAC, LTV, and GRR.
• Customizable Plans: Design compensation plans tailored to your business priorities, whether it’s multi-year contracts or retention-focused incentives.
• Actionable Insights: Use QuotaPath’s reporting tools to identify trends, optimize sales strategies, and make data-driven decisions.

Navigating the Future: A Profitability-First Approach

The sales landscape is evolving, and mid-stage companies must adapt by prioritizing profitability over growth. 

Organizations can drive sustainable success by focusing on KPIs like CAC, LTV, and GRR and aligning compensation strategies with these metrics. QuotaPath stands at the forefront of this transformation, offering the tools and insights needed to navigate this new era.

Redefining your compensation strategy for today’s market? 

Let’s chat.

Schedule a demo with QuotaPath and see how we can help you align your sales KPIs with long-term profitability.

What Is Sales Productivity?

Sales productivity is the ratio of a sales team’s output to input. For instance, a ratio of revenue or closed deals to time, effort, and resources used. It measures how efficiently a sales team converts resources like time and effort into revenue, quantifying the revenue generated per unit of resources used. 

It’s a critical metric for organizational success as it directly impacts the bottom line by revealing how well the sales team utilizes their time and resources to generate revenue. This allows companies to identify areas for improvement and optimize their sales strategies to maximize profitability. 

Improving sales productivity directly affects revenue by increasing the number of closed sales per salesperson, leading to higher overall sales figures. This, in turn, grows profitability by maximizing the return on sales efforts, reducing wasted time, and allowing for more efficient resource allocation.

Boosting sales productivity also positively affects team morale by giving sales reps a sense of accomplishment, recognition for their hard work, and the ability to spend more time on sales activities rather than on administrative tasks. 

Below, we discuss how to measure it, sales productivity tools, and more.

How To Measure Sales Productivity

First, let’s start with measuring sales productivity.

Measuring and tracking your progress as you strive to boost sales productivity. Consider the following metrics, tools, and challenges as you start.

KPIs to Track:

Tools and Methods:

Challenges in Measurement

However, please note that leaders do experience some challenges when measuring this.

Common difficulties measuring sales productivity include data accuracy, technology integration, metric overload, lack of alignment on metrics, and attribution.

Inaccurate, outdated, or unconsolidated data from multiple disparate platforms can cause misleading or incorrect evaluation. Failure to align and focus on metrics due to overwhelm by the sheer number of metrics or competing priorities can limit meaningful insights. Determining the exact factors to attribute to sales involving marketing campaigns and sales efforts can also be challenging.

7 Ways To Boost Sales Productivity

To help, here are seven tactics to drive sales productivity.

Knowing which metrics, how to track them, and being aware of the potential challenges is only the beginning. Now, you need to learn how to increase sales productivity. 

1. Set clear and achievable sales goals: Clear and realistic goals provide the sales team with a focused direction and attainable targets. This boosts motivation and facilitates more effective planning and execution.
2. Provide ongoing training and skill development for your sales team: Learning and development enhance sales rep productivity by ensuring team members continuously improve their techniques, stay updated with industry trends, and effectively adapt to changing market conditions.
3. Leverage commission automation tools like QuotaPath: Visibility into forecasted earnings helps sellers prioritize what deals to spend time on as they can quickly identify which ones make themselves (and the organization) the most money. 
4. Streamline sales processes to minimize administrative tasks: Reducing non-sales tasks, including commission tracking, frees more time for sales reps to focus on core selling activities. Consequently, this enhances overall sales productivity and efficiency.
5. Regularly analyze and optimize sales territory mapping for better coverage and efficiency: This leads to enhanced sales productivity and more strategic resource allocation.
6. Use data-driven insights to prioritize high-potential leads and opportunities: These insights enable your sales team to focus their efforts where they are most likely to succeed, thereby maximizing efficiency and enhancing overall sales productivity.
7. Foster collaboration between sales, marketing, and RevOps to ensure alignment and resource sharing: Collaboration across teams leads to a cohesive strategy to increase sales productivity and drive better business outcomes.

Why You Should Care About Improving Sales Productivity

Although improving sales productivity is continuous, the rewards are worth the effort. For instance, McKinsey found that the top productivity companies generate 2.5 times higher gross margins than the least productive, giving them higher revenue potential.

The same study showed that top companies had better resource utilization, offloaded or automated non-sales activities, increasing sales team capacity by 20 percent by doing more with less. So, it’s not surprising that the study also found that businesses with greater sales productivity had enhanced ROI, generating 2.6 times the sales ROI of laggards.

Another benefit of improving sales productivity is a significantly stronger competitive advantage, allowing an organization to generate more revenue with the same resources. They gain the ability to close deals faster and adapt quickly to market changes, effectively outperforming competitors who are less efficient in their sales processes. 

Boosting sales rep productivity improves employee satisfaction, making salespeople feel more efficient, accomplished, and valued. A survey revealed that employees are happier and more engaged when their work is meaningful and positively impacts the company. Plus, Forrester found that removing process friction and automating administrative tasks improves sales productivity while reducing seller stress and employee satisfaction.

Better customer experience is a natural outcome of improved sales productivity as it allows sales representatives to be more efficient, provide more personalized attention, and dedicate more time to understanding customer needs. This results in smoother and more satisfying interactions. 

Lastly, improving sales productivity directly contributes to better scalability in a business, allowing a sales team to handle a larger volume of customers with the same resources. This means the sales process can be expanded without increasing overhead costs.

Common Challenges That Lower The Productivity Of Sales Teams

Remember, the common challenges that teams face that can hurt sales productivity include:

Inefficient sales processes: Wastes sales rep time on unnecessary tasks, repetitive actions, and redundant information gathering. This limits time spent actively engaging with potential customers and closing deals, resulting in lower sales numbers and missed opportunities.

Lack of clear goals or direction: This leaves salespeople unsure of what they should focus on, leading to wasted time, inconsistent effort, difficulty measuring success, and hindering reps’ ability to close deals effectively.

Excessive administrative tasks: Reduces selling time by engaging with potential customers, making sales calls, building relationships, and closing deals.

Poor lead quality or lack of prioritization: Receiving low-quality leads from marketing or an inability to identify high-potential prospects leads causes reps to waste valuable sales time chasing the wrong deals.

Inadequate training and onboarding: Leaves sales reps unprepared to engage with customers, significantly hindering performance effectively.

Misalignment between sales and other teams: When sales, marketing, and RevOps teams aren’t aligned on messaging and lead generation, this creates confusion.

Outdated or insufficient tools and technology: Too many disparate sales tools or poor integration between systems can create inefficiencies and data silos.

Difficulty tracking and analyzing performance data: Makes it more difficult to identify areas for improvement and make informed decisions to drive sales growth.

Low employee morale or high turnover: This creates a disengaged workforce, decreased motivation, poorer customer service, increased errors, and a disruption in workflow as new employees are onboarded. This ultimately results in fewer closed sales and lower overall revenue.

Unrealistic quotas or poorly designed compensation plans: Demotivates salespeople, leading to decreased effort and less focus on quality sales practice. This often results in higher turnover, as reps feel unable to achieve their targets and earn a fair reward for their work, thus impacting overall sales performance.

Ineffective communication and collaboration: Leads to misunderstandings and lost opportunities.

Market competition and external economic pressures: This can lead to price wars, longer sales cycles, and increased stress on sales teams as they struggle to meet targets amid tough economic conditions.

Start Boosting Sales Productivity with QuotaPath

Sales productivity is the ratio of a sales team’s output to its input. It measures how efficiently the team converts resources into revenue and is a critical metric.

Improving sales rep productivity enhances revenue by increasing closed sales per salesperson, maximizing profitability, and allowing for efficient resource allocation while boosting team morale.

Leverage the insights and tips we’ve shared to increase sales productivity in your organization and reap the rewards.

See how QuotaPath helps you boost sales productivity. Schedule time with a team member today.

Choosing the right compensation management software is essential for aligning sales performance with business goals while ensuring accurate and transparent payouts.

With a growing number of solutions available, businesses need tools that not only automate commission calculations but also provide flexibility, reporting, and seamless integrations.

This guide evaluates five leading platforms—QuotaPath, Xactly, Spiff, CaptivateIQ, and Performio—based on their usability, key features, and effectiveness in streamlining sales compensation processes. Whether you need real-time reporting, AI-powered intelligence, or intuitive commission tracking, this comparison will help you find the best fit for your organization.

What Is Compensation Management Software?

Compensation management software is a tool used by organizations to plan, manage, and administer employee compensation packages. These packages may include salaries, bonuses, and other incentives. The software helps ensure fair and competitive pay structures aligned with organizational goals while adhering to compliance regulations. Compensation tools also help organizations make informed decisions about employee compensation based on data-driven insights. 

What To Look For In A Compensation Management and Planning Tool

The global sales compensation tools sector is projected to triple in value by 2033 compared to 2022.

Although the market is becoming increasingly competitive, choosing the best salary benchmarking tools for your business can be straightforward if you know what factors to look for during the selection process.

Here’s what to consider when choosing the best compensation management software for your organization.

Sales Commission Reports in QuotaPath

QuotaPath’s sales compensation reporting helps you measure the business value and performance of the GTM team’s compensation plans and performance.

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Sales commission reporting

Your solution should produce executive- and rep-level revenue forecasts and quota attainment reports. Choose compensation analysis tools that automatically generate accurate estimates using CRM data, allowing leadership to view their sales team’s projections.

Compensation plan modeling

When it’s necessary to modify or develop new plans, your platform should enable you to outline a plan proposal and evaluate it using historical sales data.

Ensure that your chosen compensation tool gives you autonomy to build and edit plans without the need of Support. “I’m really impressed that we can build our comp plans ourselves in QuotaPath and have full ownership of the process. Having that understanding and control is a huge factor for us,” said Hadley Kornacki, VP of Operations at Edgility Consulting. 

Plan effectiveness tracking

Adjusting incentive plans based on their effectiveness and market conditions is a standard practice. Choose a tool that supports compensation plan performance monitoring to assess a compensation plan’s success. This type of platform provides insights into team performance and displays sales metrics such as average effective rate, plan attainment, and total earnings by salesperson.

ASC-606 compliant

The compensation tool you select should enable your accounting team to monitor audit trails and recognize commission expenses to simplify compliance with the new ASC 606 regulations.

Easy support access

Choose a vendor that is easy to contact after you sign up. 

Seek continual customer support services with short response times for creating and adding new plans, adjusting comp plans, or running payouts.

Rep motivation

Identify a solution that Finance, RevOps, and your Reps will enjoy using. The software you choose should have an intuitive interface that’s easy to navigate. It needs to help reps to understand their comp plans by providing them with reporting and dashboards to easily view goals, accelerators, and bonuses and monitor milestone achievement progress.

Meet the Industry’s First AI-Powered Compensation Plan Builder

Speaking of intuitive… have you heard about QuotaPath’s AI-Powered Plan Builder to configure your comp plans to QuotaPath with ease?

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In-app communication

Team collaboration features in your selected platform help streamline the compensation discrepancy dispute resolution process. For example, look for features that enable reps to escalate disputes through the software, where Finance and Accounting can quickly respond.

Top 5 Compensation Management Tools

We’ve gathered insights about the five best salary benchmarking tools to aid in your selection process.

QuotaPath

QuotaPath is a commission tracking and sales compensation management software. It simplifies and automates processes across RevOps, finance, and sales teams, integrates with CRM and finance systems, and offers resources for compensation plan design and implementation, suitable for various organizations. 

Key Features:

• Performance Plan Modeling and Forecasting
• HubSpot and Salesforce visibility directly in those apps
• Multi-level payout approvals 

Best Used for: cost-effectiveness, ease of use, and ability to improve commission visibility and confidence among sales teams, with strong customer support, seamless tech stack integration, and robust plan modeling and forecasting capabilities 

G2 Rating:  4.7 out of 5 

Xactly

Xactly streamlines incentive compensation plans to align sales rep behavior with revenue goals. It cuts admin time, boosts quota achievement, and ensures accurate payouts. Integrating with CRM, ERP, and other systems, it provides a full view of program effectiveness and aids strategic decisions.

Key Features:

• Compensation configurator
• Customized incentive statements
• Real-time reporting and dashboards 

Best Used for: excellent customer support, ease of configuration, and accurate commission calculations. 

G2 Rating: 4.3 out of 5

Spiff

Spiff software integrates the simplicity of spreadsheets with comprehensive commission automation, allowing finance and sales operations teams to effectively manage complex incentive compensation plans. It enhances organizational trust, motivates sales teams, and provides performance visibility for enterprises of various sizes.

Key Features:

• Advanced Reporting & Analytics
• Advanced Team Management
• Powerful Testing Capabilities 

Best Used for: visibility into commissions, ease of use, and intuitive navigation 

G2 Rating: 4.7 out of 5

CaptivateIQ

CaptivateIQ is an adaptable commission management solution that combines the simplicity of spreadsheets with sophisticated automation tools. It enables organizations to efficiently design, compute, and oversee intricate incentive compensation programs. This software facilitates teams to swiftly adapt, reduce errors, and obtain real-time insights, thereby ensuring alignment with evolving business objectives.

Key Features:

• SmartGrid™: ELT & Calculation Engine
• Assist: AI-Powered Intelligence
• Enterprise Workflow Automation 

Best Used for: highly customizable, user-friendly, and effective for clear reporting and commission calculation transparency, supported by a strong customer service team 

G2 Rating: 4.7 out of 5

Performio

Performio software is an incentive compensation management tool for automating and managing sales commission calculations. It enables businesses to create complex compensation plans, monitor sales performance, and simplify the calculation and distribution of commissions to sales teams.

Key Features:

• Native data integrations
• Pre-built incentive automation
• Robust reporting capabilities 

Best Used for: Ease of use and navigation, plus commission tracking ease

G2 Rating: 4.4 out of 5

Partnering with the Best Compensation Planning Software

The growing complexity of compensation structures, a focus on revenue performance, and the rise of remote work have made compensation analysis tools essential. Choosing the best compensation management software is crucial for optimizing sales performance and ensuring fair, transparent, timely, and accurate payouts.

There are advantages of leveraging compensation tools such as increased payroll accuracy and efficiency, earnings transparency, sales rep motivation, and cost savings.

QuotaPath provides a user-friendly interface with straightforward updates and transparent, low professional service fees when compared to major competitors. The platform includes free native, real-time integrations, a free trial period, quick implementation, and dedicated support.

Multiple native CRM integration options, visible pricing, short implementation times, and compensation plan modeling make QuotaPath different than other compensation management tools.

As you work through the compensation management software selection process, seek:

• Easy and accessible sales compensation reporting
• Compensation plan modeling and testing capabilities
• Plan effectiveness tracking
• Streamlined commission payouts
• ASC-606 compliance capabilities
• Driving sales performance
• Support access
• A platform your reps will use and enjoy
• In-app team collaboration features

QuotaPath fulfills these requirements and more, making us the top compensation management software.

Discover why QuotaPath is the best option. Explore QuotaPath with a free trial or schedule time with a team member today.

FAQs

How does compensation management software work?

Compensation management software consolidates data through integrations with various platforms enabling plan administrators to create, calculate, and manage employee compensation packages. Such a platform automates processes, ensuring fair and competitive pay while adhering to budget constraints and market trends. It typically includes features for compensation analysis, benchmarking against industry standards, and reporting to facilitate informed compensation decisions.

What are the benefits of using compensation management software?

The benefits of leveraging compensation management tools include efficiency, accuracy, improved sales, motivation, transparency, and a single source of compensation information.

This software helps eliminate errors in payroll calculations, reduces the time needed to prepare payroll, and gets all teams on the same page through access to the same compensation data.

Employees also gain a greater understanding of how they earn and can track their earnings, motivating them to pursue and achieve greater results to drive organizational goal attainment.

Can compensation management software integrate with other tools?

Yes, compensation management software can integrate with other tools fundamental to the commission process. Integrations include CRMs, data warehouses, spreadsheets, business analytics, and payment and ERP systems. This facilitates smoother data flow and more accurate compensation calculations by pulling relevant employee data from multiple sources. These integrations also enable robust reporting, enabling informed strategic decision-making.

What types of compensation can these tools manage?

Compensation management tools can manage a variety of compensation types. For instance, compensation tools administer base salary, bonuses, commissions, incentives, stock options, merit increases, performance-based pay, benefits, paid time off, and other types of employee incentives. These platforms also enable adjustments based on individual performance, market data, and company budget.

Sales commissions are a strategic tool for sustained business growth. An effective sales compensation plan aligns incentives to business goals, motivating the right behaviors to achieve business objectives. This, in turn, improves the quality and quantity of deals and customers.

In fact, companies that focus on employee motivation and engagement realize 27% higher profits, 50% higher sales, 50% higher customer loyalty levels, and 38% above-average productivity.

Additionally, a strong sales commission structure drives business goal achievement and facilitates recruiting and retaining reps. The facts speak for themselves. The Sales Happiness Index showed that 51% of sales reps would be motivated to leave for higher pay. Plus, a Sales Management Association study revealed that companies with effective sales compensation programs had a 50% higher employee retention rate than those with weak programs.

Let’s break down a typical sales commission structure, review best practices, and share some compensation plan examples.

What Is A Typical Sales Commission Structure

Before we discuss the various types of compensation structures, let’s review the common frameworks and elements used to build a typical sales commission structure.

The SPIF Report

Read the ungated report to learn the most commonly implemented SPIFs and accelerators in 2024 and the average commission rate increase for multi-year contracts.

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Types of Sales Commission Structures

Now, let’s look at some commonly used typical sales commission structures.

Single-Rate Commission
An easy-to-understand plan that pays the same rate on every deal. A single-rate plan is an excellent “first” compensation plan. It works well for a Startup, early-stage company, new product, or new territory when you don’t have historical data to leverage when developing your compensation strategy. It is also the easiest plan to execute and suit various industries.

Commission with Accelerators

This tiered commission structure is an effective way to reward overperformance. However, it can become costly if your entire team overperforms. This plan is typically adopted by SaaS companies that are confident in their quota and target calculations.

Commission with Accelerators & Decelerators

A 3-tiered sales commission structure is commonly used by SaaS, offering products that aren’t impacted by seasonal shifts in buyer behavior. However, we don’t recommend this compensation plan if you’re in ecommerce. This plan is well suited for mature companies confident in their targets and seeking to contrast the top performers from the underperformers.

Commission with Accelerators & Milestone Bonus

This plan effectively incentivizes consistency with high-velocity, lower contract-value sales. However, watch out. This plan can lead to sandbagging.

Commission with Accelerators & Cliff

This plan establishes a minimum threshold before reps qualify to receive commissions, protecting the business from paying reps who aren’t performing up to standard. However, this structure is more commonly used in leadership plans as it can lead to sandbagging and unhappy reps.

Tips for Sales Team Commission Structures

There is no one-size-fits-all typical sales commission structure. It takes research, analysis, reiteration, and refinement. However, the rewards are worth the effort. Remember the following best practices to help you create an effective incentive structure for your sales teams. (NUMBERED)

1. Align with Business Goals.

An effective commission structure supports company objectives by incentivizing behaviors that drive business goal achievement—for instance, motivating reps to increase customer lifetime value or expand into new markets.

2. Keep it simple.

Your commission structure needs to be easy to understand. This enables reps to know what they need to do to earn incentives and are motivated to take action to drive the desired results. Otherwise, you risk reducing performance, increasing rep turnover, and falling short of organizational objectives.

3. Set fair and realistic quotas.

Analyze your sales team’s quota attainment record to find the balance between ambitious and achievable quotas. The sweet spot is between 60 and 100 percent. Less than 60 percent of achievement reveals too high of a quota, whereas 100 percent means the quota isn’t high enough. Setting fair and realistic quotas motivates reps and drives business goal achievement. However, establishing unattainable quotas typically leads to demotivated reps and employee attrition.

4. Communicate Effectively

Introduce your compensation plans promptly, especially if you make mid-year changes to your commission structure or plan elements. Start with leadership providing an overview of the plan. Then, share various formats of support materials, such as videos and print material, including plan documents and examples of how to calculate commissions, with all team members. Discuss changes and why they are occurring. Review the plan with your team as well as in 1-on-1 meetings.

Ensure reps understand the changes, the reasons for them, and how the company will support them under the new plan. Provide multiple channels where reps can get answers to their questions. Confirm reps understand their plan by having them sign off on plan verification.

5. Research market OTEs.

As base salaries for sales reps consistently change yearly, you must do market research as you create or update a typical sales commission structure. This helps you attract and retain top talent with a competitive incentive plan as competitors and industries evolve.

6. Use a Sales Commission Calculator: 

A platform like QuotaPath can help you accurately calculate commissions and analyze the impact of various structures on your sales team’s earnings and your company’s bottom line. This type of software also enables sales reps to run what-if scenarios with new plans, boosting plan understanding, motivation, and buy-in.

Free Sales Commission Calculator Template

A free spreadsheet to simplify the commission tracking process. Track what you or your team have earned in 4 inputs.

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7. Repeat and Adjust 

Lastly, a comp plan isn’t set in stone and should be reviewed and updated at least once a year but no more than twice a year. Evaluate commission plans for effectiveness by identifying what is working and what isn’t. Adjust based on these observations, organizational goals, marketplace, and economic shifts.

Typical Sales Manager Commission Structure

Sales manager compensation plans differ from sales rep plans in focus, pay mix, and metrics.

For instance, sales rep structures are tied to individual performance, such as deal size, quota achievement, and activities, such as the number of demos or meetings scheduled.

Conversely, a typical sales manager commission structure is tied to team performance elements like team development, coaching effectiveness, and collective quota achievement.

The pay mix typically differs between sales rep and manager compensation structures. For example, reps often receive a 50/50 mix of base and variable pay, while managers receive higher base pay plus bonuses.

Key performance indicators (KPIs) used to gauge achievement are also a central area where typical sales rep and sales manager commission structures differ. For instance, sales rep incentives are often tied to closed/won deals and activities metrics. By contrast, manager incentives are commonly tied to team attainment, team growth, and retention.

Below are three typical sales manager commission structure options to consider as you build yours.

Single Rate Sales Manager Commission Structure

Sales managers’ quotas are usually based on the combined quotas of their team members. However, this is not always the case. Sometimes, a “buffer” of 10-20% is applied when calculating a sales manager’s quota, allowing for a potential shortfall in team quota attainment. For instance, a sales manager has six reps reporting to them, each with a $150k quota. The manager’s quota is 90% of that sum. So, instead of $900k (6*$150k) it is $810k ($900k*90%).

The sales manager’s compensation based on the deals their reps close enables them to focus their efforts on coaching their team members to close more deals. 

Single Rate Sales Manager Commission Structure example:

Quota: $945k per quarter (based on a team of 6 reps at a $175k/quarter quota, held to 90%)

On-Target Earnings: $200k per year

Base Salary: $100k per year

On-Target Variable: $100k per year

Commission Structure: 2.65% of all deals their reps close

Notes: This simple structure utilizes a single rate commission. That means that the manager earns the percentage on all deals their team closes, despite their team quota attainment. This type of plan is commonly adopted because it is easy to understand, implement, and build on as a company grows.

Sales Manager Commission Structure: Commission with Accelerator

The plan is a typical sales commission structure that is commonly adopted for sales managers. 

In this compensation plan, the manager receives a fixed commission rate for each sale made by their team. After the team exceeds 100% of its quota during the quota period, the manager’s commission rate increases for each additional deal.

The commission rate should be adjusted as the team’s size changes. Failing to do so can substantially impact the manager’s income potential.

Including a “cliff” in this plan is typical, protecting the company from rewarding underperformance.

Sales Manager Commission Structure Example: Accelerators

• Commission Tiers:
  0-100%: Base rate: 3.1%
  100%+: 1*5 base rate 4.63% (non-retro)
• Annual OTE: $200,000
• Base:variable: $100,000 / $100,000
• Pay mix ratio: 50:50
• Annualized Team Quota: $3.6M Annually
• Quarterly Team Quota: $900,000
• Manager Buffer: 90%
• Manager Quota: $3.24M Annually

Sales Manager Commission Structure: Bonus

This final sales manager commission structure example includes bonuses as incentives.

This structure designates managers receiving a pre-determined bonus for each attainment point linked to their team’s overall quota achievement.   

The Sales Manager’s bonus percentage for this compensation plan is based on their team’s quota attainment percentage. For example, if the team achieves 93% of their quota, the Sales Manager will receive 93% of their bonus (calculated at $250 per percentage point), regardless of the quota size.

This structure also incorporates a manager buffer of 10% to account for a potential shortfall.

However, regardless of team size, the manager’s bonus remains consistent within this sales leadership compensation plan. While the team may grow or scale back, the per-attainment bonus remains unchanged. 

Sales Manager Compensation Plan Example: Bonus

• Single-rate bonus: $250 per percentage point of attainment
• Annual OTE: $200,000
• Base:variable: $100,000 / $100,000
• Pay mix ratio: 50:50
• Rep Quota: 150,000 Quarterly
• Annualized Quota amount: $3.6M Annually
• Quarterly Team Quota: $900,000
• Manager Buffer: 90%
• Manager Quota: $810,000 Quarterly
• Manager Quota: $3.24M Annually

Typical Sales Commission Structures — Final Thoughts

A typical sales commission structure facilitates sustained business growth. It aligns incentives with business goals, motivating the right behaviors to achieve business objectives while boosting revenue and loyal customers. An effective compensation plan also helps attract and retain sales talent, further stabilizing company growth.

One size does not fit all when it comes to building compensation plans. Select a structure and consider our best practices as you create your plans.

See how QuotaPath streamlines compensation plan creation and administration. Schedule time with a team member today.

FAQs About Sales Commission Structures

How much should I pay in commissions?

The percentage of total compensation that is commission impacts on how much the employee can potentially earn. One size does not fit all when determining how much commission to pay. Factors to consider when making this decision include the type of sales role, the company’s sales goals, the person’s experience and performance, and industry benchmarks.

How do commissions affect my bottom line?

An effective sales commission structure positively impacts a company’s financial health. By aligning sales goals with company objectives and incentivizing desired behaviors, you can increase sales productivity and revenue. A competitive commission plan also protects your bottom line by boosting employee retention, reducing turnover costs, and increasing sales force stability.

What’s the difference between OTE and base salary?

On-Target Earnings (OTE) refers to the total amount an employee can potentially earn in a year if they meet all their sales targets. This figure includes their base salary and incentives. By contrast, the base salary is the fixed amount of money an employee receives regardless of their performance. Therefore, OTE represents the employee’s total potential earnings while base salary is the guaranteed minimum pay.

When managing any organization, efficient payroll is essential.

Handled correctly, you can ensure that staff are consistently paid on time. But all too often, bottlenecks occur, slowing the process. This can lead to employees feeling frustrated and less motivated in their roles.

Of course, the larger your organization, the more complex the payroll process becomes. 

That’s why businesses are turning to cloud-based solutions to improve the payout accuracy. This technology centralizes employee data into a unified space. The software can automate manual tasks from here and guarantee regular and error-free staff payments.

On an even bigger scale, the cloud can transform organizational efficiency, boost employee satisfaction, and cut costs with the right approach. In this article, we’ll explore these robust solutions in more detail.

We’ll also show how to transition from outdated legacy systems to a cloud-based approach. 

Benefits of cloud-based solutions for payout accuracy

There’s no denying that cloud-based solutions represent the next step for payroll. But what benefits does the technology bring to the department? We’ve explored some of the top advantages below. 

Enhanced data management and real-time processing

Cloud-based payroll solutions simplify data management thanks to real-time processing. This technology processes data as soon as it becomes available. It can then be outputted to systems that require time-sensitive responses. 

Real-time processing enables cloud-based payroll systems to calculate employee wages and taxes as they are earned. This is as opposed to making a manual calculation at the end of each payment period. This guarantees that employees can have quicker access to their hard-earned wages. 

Ultimately, an employer that pays staff more quickly will always be preferred to a slower alternative. In this way, cloud-based payroll can also be a factor in reducing staff turnover and maintaining good employee relations.

Automation and reduced human error

Automation is a key aspect of all cloud-based solutions. Consider the different manual processes involved in payroll. In addition to the basic wage, additional factors such as allowances, expenses, and bonuses add complexity. By carrying out this process manually, not only are mistakes more likely, but so are delays, which can lead to employee frustration.

With all this complexity, mistakes can creep in at any stage of the process. Cloud-based solutions will automate and standardize a wide range of processes, from invoice processing to tax calculations, removing manual activity and cutting out the risks. There’s no danger of mistakes, as the software will carry out tasks as programmed, consistently and accurately. 

The same goes for external contractors and freelancers that you work with. If they’re not already, they should be encouraged to use invoicing software to automate and manage their invoicing process, reduce the risk of errors, and ensure they are getting paid on time. 

Scalability and flexibility in financial operations

The more employees your organization takes on, the more difficult the task of the payroll team becomes. Each new staff member requires paperwork and onboarding. All wages must also be logged for financial accountability. 

Without cloud-based software, your payroll team must also scale up. You’ll need additional employees to handle the rise of manual tasks. Conversely, if you scale down your employee base, you’ll need fewer payroll staff. 

Cloud-based solutions make scalability much simpler. Most software is extremely flexible, allowing you to choose the features you need. You can pay to scale up alongside the growth of your organization. What’s more, this approach is usually more cost-effective than hiring a larger team. You don’t need to worry about training or onboarding, as cloud-based tools work straight away. 

Key cloud-based technologies for payout accuracy

There are many clear benefits to using cloud-based technologies for payroll. But which tools are most useful for boosting accuracy and guaranteeing efficient payout? We’ve explored some top examples below. 

Data analytics and AI integration

It’s useful to know what your payroll numbers are and what they mean for your business. That’s why payroll analytics software has been incredibly useful not only in determining where improvements in the HR process can be made but also for employee insights that boost performance, such as when individuals or departments are due a raise. 

Listed below are some of the main ways data analytics can provide useful payroll insights: 

• Identify savings – Software enables you to keep a close eye on costs, and spot areas where savings can be made. 
• Predict trends – Using AI-powered machine learning, analytics can predict future payroll trends. For instance, you can forecast periods where you’ll require additional employees. This way, you can more effectively budget for the future. 
• Spot fraud – Analytics can help you identify inaccuracies within your payments. You can spot mistakes or fraudulent activities before they become too costly. 

Smart contracts and automation tools

AI-powered contract automation tools allow us to create ‘smart contracts’. These contracts are automated and run on a blockchain. They’re programmed to carry out certain actions once predefined tasks have been completed. Payroll teams can use smart contracts to automatically send payments to employees once they have completed a set amount of hours. 

Smart contracts present a much more efficient alternative to traditional contracts. Instead of paying employees on a set date, staff are paid once work is complete. Employees will be happier as this means they can get access to their earnings more quickly. 

Secure cloud storage and data encryption

Managing data securely is now more critical than ever. To keep the trust of employees, and remain compliant with emerging data legislation, businesses must keep payroll information secure. 

Using a cloud-based platform helps to keep your data safe. These solutions offer data encryption, making sure that information is only available to those with access. Cloud platforms are also designed to be compliant with data laws. With data stored on the cloud, there’s less risk of incurring costly fines. 

Steps to transition from legacy systems to cloud-based solutions

What if your payroll team is still using outdated legacy systems? Stick to the following steps to bring your software up-to-date. 

Assess current systems and define objectives

The process should begin with thoroughly assessing your existing systems and budget. It’s logical to upgrade your payroll alongside carrying out a wider overhaul of your HR systems, but this requires careful planning.

Use your accounting software to forecast your cash flow and create reports that will help you make strategic decisions. With a clear budget and objectives, you can monitor costs and analyze how this transition to a cloud-based solution has benefited your business over time.

Once you’ve determined your budget, you should list and review all the critical areas in your payroll systems. Which are in most need of an upgrade? To measure current performance, you could track systems against payroll KPIs. For instance, you might look at the volume of data input issues or calendar length (the length of time it takes to complete an average payroll run). 

Select the appropriate cloud solution

With so many cloud-based payroll solutions available, it can be difficult to know where to start. The ‘best’ choice will depend on the unique needs of your business. As a broad rule, look for the following features: 

• Software that is recognized by your local tax authority. 
• Varied functionality that allows you to manage payslips and other employee documents. 
• The ability to scale payroll requirements alongside a growing workforce. 
• The option to share documents and easily collaborate with other payroll or HR staff. 
• Integration with HR and other business tools. 

Carry out data migration and system integration

It’s important that you can smoothly migrate data from your legacy systems to the cloud. Luckily, most cloud-based software offers a simple setup with minimal steps. Your provider should assist you with a step-by-step guide for a simple and smooth migration. 

In general, you’ll need the following details when migrating to a new system:

• Employee details (full name, address, start date of employment, etc). 
• A list of year-to-date earnings and deductions. 
• Employer year-to-date information (e.g. an employee’s net pay). 
• Details relating to pension schemes and providers. 

Customize and optimize your tools

Once you’ve set up your cloud-based system, it’s important to tailor it to your needs. Cloud solutions adopt standardized processes. As mentioned, though, the best solutions allow you to configure these so you can make sure that your organization’s needs are met. 

To begin, consider the best dashboards to allow you to present your payroll analytics. These should include performance against your KPIs and other measures that help you manage your processes and deliver maximum effectiveness. Look for cloud solutions that offer easy-to-digest visualizations that allow staff to track performance and support strong data analysis. 

Alongside this, consider access to your cloud data. Are appropriate levels of access assigned to the right people? Consider division of responsibilities to guarantee integrity. Are important documents stored correctly, and are you on top of version control? 

There are many areas where the right configuration choices will boost performance. By optimizing your tools, you can make sure you’re getting the most out of your cloud solution. 

Deliver staff training and change management

As we’ve explored, introducing cloud-based payroll systems brings many benefits. The transition, though, represents a change for your staff. Some employees, particularly those who have worked for you for a long time, may be apprehensive about this change. To reduce concerns, highlight the benefits of cloud automation before an upgrade. Explain how the transition will help to make employees’ lives easier. 

Once systems are in place, be sure to offer training and ‘show the ropes’ to your team. Payroll training services can provide expert knowledge and insights. If you have any employees with previous experience, it may also be wise to appoint ‘champions’ to provide additional assistance to teammates who are struggling. 

Lastly, create a space on your LMS or HR platform so that staff can access learning materials. These resources should be accessible on the go so that staff can learn in an environment that suits them.  

Key takeaways

The rise of cloud-based technologies represents an exciting opportunity for payroll teams. It’s a chance to reduce error, cut out manual work, and pay employees more quickly. 

Here, we’ve explored some of the key cloud-based technologies to enhance the payout process. Thanks to AI-powered analytics, teams can gain greater insights into their payroll data. With smart contracts, you can guarantee faster payment. Most importantly, the cloud provides a secure space to protect sensitive employee data. 

So, why not embrace the future? Follow our steps and switch to a cloud-based payroll system today. 

A variable compensation plan drives performance by improving employee motivation and retention and creating alignment between employees’ day-to-day tasks and business goals.

We love a variable comp plan, because when they’re well done, they boost employee motivation.

Linking financial rewards to performance encourages employees to invest more effort and achieve greater results. This increased motivation ultimately leads to improved performance and better outcomes for the organization.

Variable compensation plans also play a crucial role in enhancing employee retention.

Offering incentives such as stock options and performance-based bonuses helps employees feel valued and acknowledged, reducing the likelihood of them exploring other job opportunities. Furthermore, these plans align employee efforts with company goals, fostering greater commitment.

What Is a Variable Compensation Plan

A variable compensation plan is typically salary plus performance or growth-based pay. Variable pay structures link incentives directly to company goals and fluctuate based on employee performance. This method motivates greater productivity and aligns individual and team efforts with organizational goal achievement.

Although there are different types of variable compensation, all types result in employees earning more pay when they meet or exceed targets or when the company achieves its growth goals.

Profit-sharing plans: A portion of a company’s profits distributed to employees, typically paid on a quarterly or annual basis, cultivating a sense of ownership and shared success. (Read more on a profit-sharing based comp plan.)

Stock options and equity-based incentives: Stock options give employees the right to purchase company stocks at a pre-determined price, whereas equity-based incentives grant employees company shares. Both incentives align employees’ interests with those of the investors.

Watch: Equity 101: Understand What Equity, Stock, and Options Really Are

The median employee stock option program (ESOP) is typically 13-20% of company equity, according to Carta. These forms of company bonuses are popular with 58% of companies including equity in their variable compensation plans according to Alexander Group’s 2024 survey.

Variable Compensation Plan Examples

How do you translate these incentives into compensation plans for different roles in your organization?

These variable compensation plan examples will help you get started.

Account Executive Sample Plan

Quota: $200,000 of ARR per quarter
On-Target Earnings (OTE): $150,000 per year
Base Salary: $80,000 per year
On-Target Variable: $70,000 per year
Commission Structure: 10% commission on all ARR sold until quota is reached, then 15% commission on all ARR above quota

Notes: This plan includes a straightforward accelerator to reward over-performance. The sales rep earns a flat commission rate until they hit their quarterly quota. Once the quota is achieved, the commission rate increases for any revenue generated beyond the quota. Importantly, the higher commission rate only applies to the incremental revenue above the quota, not retroactively to the revenue earned earlier in the quarter.

Customer Success Rep Comp Plan

Quota: 85% customer retention rate per quarter + $50,000 in expansions per quarter

On-Target Earnings (OTE): $100,000 per year

Base Salary: $70,000 per year

On-Target Variable: $30,000 per year

Commission Structure:

• Retention Goal: Achieving 85% retention secures one-third of the variable pay ($10,000 per year or $2,500 per quarter).

• Expansions: A 10% commission on expansion ARR until the expansion quota is met, then a 20% commission on expansion ARR above quota to incentivize growth.

Notes: This plan combines retention and growth to align with the dual focus of Customer Success teams. Hitting the retention goal secures a reliable portion of the variable pay, while commissions on expansions offer significant earning potential through accelerators. The higher commission rates on expansion ARR above the quota encourage the rep to prioritize upsell and cross-sell opportunities, driving both individual and company growth.

 VP of Sales Variable Compensation Plan

Quota: $2.5 million of new business ARR, broken down quarterly based on the financial model

• Q1: $350k
• Q2: $550k
• Q3: $750k
• Q4: $850k

On-Target Earnings (OTE): $450,000 per year

Base Salary: $270,000 per year

On-Target Variable: $180,000 per year

Commission Structure:

• $400 per attainment point of quota: For every percentage point of quota achieved, the VP earns $400. For example:
  •   If they achieve 92% of their Q1 target, they earn 92 × $400 = $36,800.
  • If they achieve 105% of their Q2 target, they earn 105 × $400 = $42,000.

• $15,000 quarterly bonus for hitting financial target: The VP earns a flat $15,000 bonus if the quarterly financial target is met. This bonus is not prorated for partial attainment and does not increase for over-attainment.

• 1.5% equity vested over 4 years: A long-term equity incentive to align the VP’s interests with the company’s growth and performance.

Notes: This VP of Sales compensation plan is structured to incentivize over-performance with a “per attainment point” bonus structure, rewarding incremental progress toward and beyond the quota. The quarterly quota increases over time to reflect business growth goals. The flat bonus for hitting financial targets encourages focus on broader strategic outcomes, and equity provides a meaningful long-term incentive to stay aligned with the company’s overall success.

Variable Compensation Plan Template

Still need more help? Our free templates will help you build your new variable compensation plans.

•  Account Executive Compensation Plan Templates
•  Account Manager Compensation Plan Templates
•  Sales Development Reps Variable Plan Templates

Variable Incentive Compensation Plan Best Practices

The following best practices will help you build and maintain an effective variable incentive compensation plan.

1. Clearly Define Goals and Metrics

Aligning incentives with key performance indicators (KPIs) makes the plan easy to understand, minimizes confusion, and facilitates tracking performance and success.

Measurable goal examples include a 20% increase in monthly sales revenue, a specified quarterly customer retention rate target, and a designated quarterly average Net Promoter Score (NPS) goal. Not only should goals be measurable, but it’s also essential that they be specific, measurable, achievable, relevant, and time-bound (SMART).  

2. Balance Simplicity and Flexibility

Overly complex plans can confuse employees and reduce motivation. Plans must be easy to understand and transparent, boosting employee buy-in, participation, and outcomes. Plans are not static so flexibility is crucial for routinely adapting to changing market or business conditions.

3. Incorporate Accelerators and Thresholds

Accelerators, higher payouts for overachievement, can motivate employees to exceed targets. By contrast, using thresholds ensure minimum performance levels are met before payouts begin. Accelerators and thresholds can work together to by rewarding salespeople who exceed quota while protecting the business from paying reps who are underperforming.

4. Regularly Review and Update the Plan

Periodic reviews are essential to ensure the plan remains relevant. Regularly gather employee feedback to identify pain points or improvements, giving them careful consideration when making plan changes. And adjust plans in response to business changes, such as new products or market shifts.

5. Ensure Fairness and Transparency

Clear communication of the plan builds trust and reduces disputes. When employees understand the rules, expectations, and incentives, their plan will motivate desired behaviors and boost employee engagement and satisfaction. Fairness in metrics is essential to avoid perceived favoritism or inequity. Goals must feel attainable, relevant, and equitable.

Tips for communicating variable compensation plan changes or updates effective include: 

• Workshops led by leadership, reviewing plan changes.
• Explanations of why the changes are being made.
• A review of the incentive calculations with leadership and in a reference document.
• Resources and enablement support to help achieve new business goals.
• Feedback loop channels where employees can ask questions.

6. Tie Compensation to Both Individual and Team Performance

Rewarding individual achievements while encouraging collaboration with a combination of individual and team performance incentives strengthens team dynamics and fosters teamwork.  For instance, hybrid structures that incentivize personal performance and team success include both individual variable compensation plan elements and team bonuses.

7. Use Technology to Track and Automate Compensation

Leverage tools like QuotaPath and CRMs for tracking performance and automating calculations. Manual commission calculations are error-prone and reduce transparency, leading to disputes and inefficiencies. Automation removes these errors, ensuring accurate and consistent payouts.

Compensation automation also streamlines incentive management by automating calculations, approvals, and reporting, saving time and resources. Sales incentive automation enhances trust by providing real-time insights into earnings and performance.

Allowing reps to track their commissions and progress toward their goals increases their understanding of how they earn incentives, boosting their motivation, and driving greater rep performance.  Real-time visibility also enables managers to monitor performance and identify coaching opportunities.

8. Monitor Plan Effectiveness

Measure the plan’s success through metrics like revenue growth, employee satisfaction, and rep turnover rates. Revenue growth shows how sales commissions impact revenue growth and business goal achievement.

Gathering feedback from quota-carrying sales reps helps ensure compensation plans align with their motivations and drive success. And sales rep turnover rate, which reveals the rate at which salespeople leave the organization, reflects how well compensation plans motivate and retain talent.

Market data helps to benchmark salaries and incentives against industry standards, ensuring you can attract and retain top talent with fair and competitive pay. This research also helps you identify emerging compensation trends and new incentive or benefit types.

Regular reporting to leadership to assess ROI of the incentive plan is advantageous to ensure profitability, relevance, and market alignment.

Frequently Asked Questions About Variable Compensation Plans

What roles are best suited for variable compensation?

Variable compensation is especially effective for roles like sales, customer success, and marketing where the connection between employee performance is clear and easily measured. For instance, at a software company, various teams contribute to revenue growth. The sales team drives revenue by engaging leads and closing deals, marketing attracts and nurtures qualified leads, and customer support fosters positive experiences to retain customers.

How do you balance fixed versus variable pay?

Finding the right balance between base salary and variable pay helps attract, retain, and motivate employees while driving business goal achievement. The balance varies based on several factors including role type, company goals, employee experience and performance, and marketplace benchmarks. Consider these factors to determine the best balance between fixed and variable pay as you build your variable compensation plans.

Can variable compensation plans work in non-sales roles?

Yes, variable compensation plans are effective for sales and non-sales roles alike. These incentives can be tied to a variety of goals such as achieving sales targets, meeting project deadlines, or reaching specific financial metrics. Rewards go beyond commissions and include profit-sharing plans and retention or recognition bonuses that could apply to any role.

How do you handle disputes or miscommunication about payouts?

Payout dispute resolution should be initiated promptly by an employer. Start by reviewing the calculation process and clearly explaining the rationale behind the payout to the employee. Provide the employee with easy access to relevant performance metrics and openly communicate while addressing any concerns. Ensuring transparency throughout the dispute resolution process is key to maintaining employee trust and minimizing further issues.

Compensation planning has always been a critical yet complex process, demanding precision, flexibility, and alignment with unique business goals.

Today, we’re excited to introduce QuotaPath’s AI-Powered Plan Builder, the industry’s first AI solution to easily create, customize, and optimize compensation plans faster than ever within a commission tracking platform.

Generate plans in QuotaPath directly from existing documents or natural language. Organize plan components from an extensive library with drag-and-drop functionality and accurately streamline quota management in one intuitive platform. 

This isn’t just another tool with AI slapped on it—it’s practical and applicable to simplify the entire compensation planning process. 

“I’ve been blown away by the impact of AI-Powered Plan Builder on the plan-building experience and the reactions from early customers,” said QuotaPath Chief of Product Wyndham Hudson. “We’ve taken an inherently complex problem and made it easy for anyone to build plans. Even if you’re starting from a complex formula, you can plug that in, and we’ll instantly create a plan you and your team can easily understand.” 

AI-Powered Plan Builder helps teams develop, manage, and deliver plans that effectively support their company’s goals while eliminating complexity in the plan creation process when automating commission management. 

Drag and drop components within the plan structure to seamlessly establish or change structure hierarchy and visualize plan elements such as shared quotas and dependencies. Take pre-existing plans and use the AI prompt to add new tiers, adjust quotas, or modify commission rates to reflect your current goals and strategies.

With our AI-Powered Plan Builder, deploy compensation strategies that drive selling behaviors that align with your business goals—and deliver them in record time.

“This a great use case for AI,” said RevOps Co-Op Founder and CEO Matthew Volm. “It’s giving someone a head start with a comp plan, a key part of every revenue operator’s day-to-day, and it does it on the first try. You can’t really ask for anything more than that.”

Read more below.

Sample Use Cases

We get it. Seeing is believing. So, here are a few examples of how we’re using AI in sales compensation design within the QuotaPath platform. 

Scenario 1: Translating Your Existing Plan into QuotaPath

New to QuotaPath, you begin building your first comp plan using the sales commission software. Instead of jumping on a support call, you type out a brief plan description in the AI window.

Prompt:
“Quota for my reps is $480k ARR per year or $40k ARR per month; i pay commissions on a monthly basis and want to average a 10% commission rate, but i want a tiered comp plan with 3 tiers to get there, where the first tier pays out at 7.5%, the 2nd tier at 10% and the 3rd tier at 12.5%; the 3rd tier should be uncapped.”

How AI-Powered Plan Builder Helps:

Custom Plan Creation: The AI generates a draft plan with a $480K annual quota, monthly quota of $40K, and three multi-tier commission rates that average 10% and set to 7.5% payouts on all deals under 100% attainment, 10% on all deals between 100-150% attainment, and 12.5% on all deals above 150% attainment uncapped.

Flexible Adjustments: Edit rates or quotas, use the AI to add a SPIF or milestone bonus, or drop in either from the Component Library.

Scenario 2: Refreshing Last Year’s Plan

You’re starting with last year’s plan but need a refreshed structure for your Account Executive (AE) team that will reward for overperformance. 

Prompt:
“I want to refresh last year’s plan for my AE team. Set a quota at $50K. For commissions, let’s do 5% below quota and 10% for anything above.”

How AI-Powered Plan Builder Helps:

Custom Plan Creation: The AI generates a draft plan with a $50K quota and two commission tiers: 5% for earnings under $50K and 10% for earnings exceeding that amount.

Flexible Adjustments: Fine-tune the rates, quotas, or add additional components directly in the plan builder interface.

Scenario 3: Building a CS Team Plan Rewarding NRR and GRR

You’re looking to incentivize upsells and renewals and need help creating a customer success compensation plan. However, you need a plan that incentivizes net revenue retention (NRR) and gross revenue retention (GRR). You leverage QuotaPath’s AI-Powered Plan Builder for ideas and advice. 

Prompt: “A compensation plan for a CS team that rewards GRR and NRR tied to a quarterly book. This includes a commission floor requiring 60% of quarterly bookings before earning commissions.”

How AI-Powered Plan Builder Helps:

Custom Plan Creation: The AI generates a draft plan set to a 1% commission rate on any upsell amount and another 1% for standard renewals. 

Flexible Adjustments: Increase or decrease the floor. Adjust the weight of the quotas. For example, if you want the team to focus more on GRR, the quota should be higher – 70/30 – and the commission rate. 

These are just a few examples of how you can use our AI-Powered Plan Builder to get started in QuotaPath with your unique compensation plan.

Start Using Your Comp Plans to Drive Selling Behaviors

Your compensation plan is more than just a must-have document. It’s one of the most powerful tools for driving performance, engagement, and growth. 

And now, we’ve made creating dynamic compensation plans in commission software nearly effortless. Streamline your end-to-end commission process with AI-Powered Plan Builder. 

By simplifying plan creation, automating commission management, and aligning incentives with your business objectives, AI-Powered Plan Builder empowers your team to focus on what matters most: achieving and exceeding goals.

Turn compensation into a growth engine with AI at your side.

To learn more, schedule time with our team. 

Welcome to 2025!

With the start of a new year, go-to-market leaders can align their sales teams with fresh goals and incentives. 

Many RevOps and Sales leaders will continue to finalize their compensation plan rollouts to unveil at their annual kickoffs. But that doesn’t mean you can’t start off the year with some fast-start bonuses or SPIFs to ignite motivation ahead of the new plans. 

After all, a strong start can set the tone for the entire year.

That’s where strategic SPIFs come in. 

These short-term bonuses drive urgency, competition, and focus among your sales reps. Whether rewarding the first to close new logos or incentivizing early pipeline building, SPIFs can generate momentum — and revenue.

Below, we outline five actionable SPIF ideas tailored to jumpstart your team’s performance this quarter. 

Let’s get started.

1. First to 3 new logos SPIF

What it is: Reward the first rep to close three new customer accounts (“logos”) in Q1 with a bonus or special prize, such as a cash reward, a tech gadget, or a weekend getaway.

Why it works: Encourages fast action and prioritization of new business development. This creates friendly competition among team members, motivating everyone to identify and close new opportunities early in the quarter.

Example:  $1,000 cash bonus or equivalent (e.g., a high-value tech gadget like an Apple Watch or noise-canceling headphones).

2. SPIF on all deals c/w by Feb. 15

What it is: Offer a bonus on every deal closed by a specific date, such as February 15. For example, add a flat bonus per deal (e.g., $500 per deal) or a percentage of deal value (e.g., an additional 5% commission).

Why it works: Drives urgency and focus during the critical early weeks of the year, ensuring deals in the pipeline move quickly through the sales cycle. It helps build momentum for the team and sets a strong foundation for hitting quarterly and annual targets.

Example:  $300–$500 per closed deal or an extra 3–5% commission on deal value

3. Pipeline Builder SPIF

What it is: Reward reps for building a strong sales pipeline early in the year. Offer a bonus for sourcing and qualifying a set number of new viable opportunities by the end of January or mid-February.

Why it works: Encourages prospecting and ensures a steady flow of leads to set up success for the rest of the quarter.

Example:  $50–$100 per qualified new opportunity added to the pipeline, capped at 10–20 opportunities.

Note: We recommend setting clear guidelines so reps don’t game the system. For instance, demo occurred might be a good rule to enact.

4. Upsell or Cross-Sell SPIF

What it is: Incentivize reps to upsell or cross-sell to existing customers. For example, offer a bonus for adding additional products or services to existing accounts by March 1.

Why it works: Helps grow revenue from your existing customer base while showing customers the value of your broader offerings.

Example:  5–10% of the upsell value as a bonus, or $250 per successful upsell.

5. Team Challenge Bonus

What it is: Create a team goal where everyone gets rewarded for hitting a collective target by the end of the first quarter. For instance, if the team collectively closes $X in new business or reactivates Y dormant accounts, they all receive a bonus or special experience (e.g., a team lunch, gift cards, or a fun outing).

Why it works: Fosters collaboration and motivates underperforming team members to contribute to the group’s success.

Example: $500–$1,000 per team member if the collective goal is met, or a shared group prize like a team outing worth $2,500.

Deploy & Manage SPIFs with QuotaPath

As you kick off the new year, remember that a well-structured compensation plan can be the catalyst for driving early success. 

Whether through innovative SPIFs, strategic bonuses, or team-based incentives, starting the year with a flurry of sales can set the tone for sustained performance throughout the remaining quarters.

QuotaPath offers a seamless way to adapt your compensation strategies to align with shifting market demands, seasonality, or even short-term motivational boosts for your reps. 

With features like the flexible Plan Builder and AI-driven component suggestions, you can quickly refine and deploy compensation plans and temporary bonus paths that resonate with your team and drive the proper outcomes. 

Automate complex calculations and adjust components such as quotas and accelerators with QuotaPath to ensure your comp plans remain dynamic and effective.

Stay agile and let QuotaPath take the complexity out of compensation management so you can focus on inspiring your sales team and achieving your revenue goals. 

Here’s to a strong Q1 and an even stronger 2025.

To learn more, schedule time with our team today. 

Check out our latest report, The SPIF Report: Accelerators That Drove $7.3M in Sales Commissions Paid in 2024. 

Based on QuotaPath platform data, we built this report to highlight how revenue teams leverage SPIFs (Sales Performance Incentive Funds) and accelerators to align sales behaviors with key business goals.

SPIF Q1 Micro Report

After automating commission payouts of more than $7M in short-term incentives and accelerators for our customers, we unpacked what incentive types are most widely adopted, when, and why.

View Report

What’s Inside

Throughout 2024, QuotaPath customers paid out $7.3 million in SPIFs and accelerators alone, demonstrating these incentives’ strategic role in modern compensation plans. 

This report analyzes data to surface actionable trends revenue leaders can adopt to refine their sales strategies.

Here’s a preview of our findings:

• Multi-Year Accelerators Drive Results: Represented in 15% of plans, these incentives generated 25% of total revenue, showcasing their power in promoting long-term deals.
• Popular SPIF Categories: From rewarding quick wins to celebrating consistent performers, we identified the top four SPIF structures in 2024.
• Commission vs. Bonus Structures: An overwhelming 95% of SPIFs on our platform were structured as commissions, emphasizing their effectiveness over flat bonuses.

Why It Matters

SPIFs and accelerators aren’t just perks—they’re strategic tools for aligning sales behavior with your company’s North Star metrics. When thoughtfully implemented, they can energize teams, build momentum, and maximize revenue potential.

What’s Next

This report is just the beginning.

We’ll continue to publish regular insights based on platform data to help you design compensation strategies that drive measurable results.

Ready to discover how these tools can work for your team? Dive into the full report here.