In our Tales from the Sales Team series, we’ll cover actual concerns and questions from real salespeople about their paycheck and sales commission.
“Why did my commission rate increase for just these last three sales?”
– Deanna, a pharmaceutical sales rep
After the most recent commission cycle, our hero, Deanna, noticed that she earned a higher rate of sales commission but only on the last three sales she made. She knew she’d surpassed her quota for the cycle but hadn’t tracked how far she’d exceeded it. When she spoke to her commission manager, she discovered she’d sold 114% of her quota. That level of achievement had unlocked a sales accelerator.
When sales representatives exceed quotas, everyone wins.
What is a Sales Accelerator?
At Deanna’s company, once a sales rep hits 110% of their sales quota, they earn a higher commission, boosting their rate from 10% to 12%. This is known as an accelerator. Deanna’s last three sales for the cycle came after she’d reached the 110% milestone so she benefited from the accelerator for just those transactions.
When sales representatives exceed quotas, everyone wins. Not only will they earn commission on those additional sales, but sales organizations drive more revenue. To encourage that level of achievement, companies often apply these sales accelerators as part of their overall sales commission plan. Occasionally accelerators are accompanied by sales decelerators.
What is a Sales Decelerator?
On the other hand, Deanna’s coworkers who do not reach at least 70% of their quota will earn a lower commission, dropping their rate from 10% to 8% for each sale below that milestone. This tactic is called a decelerator and it’s used to ensure that sales reps get within a certain range of their quota.
The concept of a sales decelerator is that sales reps will be driven to reach their quota in order to earn more money. Those motivated sales reps will work harder to get more sales and earn the company more money.
A Balancing Act
Incorporating accelerators and decelerators into a sales commission plan can be a balancing act. If you’re considering these measures for your sales team, you’ll need to be prepared to answer your team’s questions and work with them to ensure they have the potential to be successful. Having sales commission management software, like Core Commissions, in place can also help give your sales reps direct access to their reports so they can see the progress themselves.
- Set reasonable quotas: Quota may not be the same for every sales rep. Consider how many sales your sales reps can manage based on their territory, the season, and their potential for leads. Take your industry into account as well: how well are your competitors selling right now? Use all of this data to set a reasonable quota for each of your salespeople.
- Communicate clearly and repeatedly: If you’re setting accelerators and decelerators as measures to incentivize performance, you need your performers to know they’re there and what they do. Communicate the details from the time your sales rep starts on day one and include it in sales meetings, materials, contracts, etc. With Core, sales reps can log into the sales portal to see where they stand compared to their quota and how far they need to go to trigger an accelerator (or to avoid the decelerator). It’s not going to work if the salespeople don’t know it’s an option.
- Provide support to your team: Give your team the tools they need to perform. That could come in the form of qualified leads, CRMs, and other sales enablement. If your team doesn’t have what they need to reach their quota, accelerators and decelerators will do nothing but frustrate your employees.
- Prepare to adjust in the face of shifting priorities: If 2020 has taught us anything, it’s that sales goals can change at the drop of a hat or the spread of a global pandemic. Be prepared to adjust goals and quotas if it’s clear that the current state of the world—or even just your office—is impacting how well your team can perform.
Whether you want to incorporate accelerators and decelerators for the first time or adjust them over time, Core Commissions can help you make it happen. Send us a note and we’ll show you how our software can automate every step of your sales commission process and give you the flexibility to adjust as needed.
If you’re interested in learning more about various sales commission terms, check out our guide on How to Speak Sales Commission Management.