Designing a sales compensation plan isn’t just about throwing together a base salary and commission percentage. It’s about creating a structure that motivates, retains, and attracts top performers who will drive your revenue forward. Whether you’re building out your first sales team or reworking your current comp plan, here's how to design one that actually gets attention—and results.
Before setting numbers, define your sales goals and key metrics. What behaviors do you want to reward? Is it new business, upselling, renewals, or multi-year contract deals? Aligning your comp plan with company objectives ensures your reps are focused on the right outcomes.
Tip: Build around SMART goals—specific, measurable, achievable, relevant, and time-bound.
Top salespeople won’t bite on commission-only jobs unless the upside is life-changing. A solid base salary provides financial stability and makes your opportunity more attractive.
What’s competitive? It varies by industry and location, but aim to be within the top 25% of the market to stand out.
If your reps need a spreadsheet and a calculator to figure out their paycheck, your plan is too complicated. Keep it clear, tiered (if needed), and easy to understand.
Example structure:
Transparency builds trust—and trust keeps reps around.
Accelerators motivate your top performers to keep pushing even after they’ve hit quota.
For example: After 100% to quota, bump commission from 10% to 14%. After 125%, take it to 18%. Make it exciting to outperform.
Not all sales roles are created equal. Your SDR comp plan should look different from an enterprise AE’s.
Tailor the plan to the function and the sales cycle.
Cash isn’t everything. Recognition programs, President’s Club trips, flexible schedules, and career pathing all add value—and help you stand out in a crowded hiring market.
The best comp plans aren’t set-and-forget. Reps evolve, markets shift, and your growth strategy will change. Review your compensation plan quarterly to make sure it still drives the right behaviors and keeps you competitive.
Top sales talent is in demand, and your compensation plan is one of the first things they evaluate. The best reps don’t just chase money—they chase clarity, fairness, and opportunity. If your comp plan delivers all three, you won’t just attract great salespeople—you’ll keep them, too.
