Tracking commissions is a repetitive task. However, a number of variables impact the commission calculations. Those variables may be internal metrics, such as product cost or individual performance. However, external elements factor in as well. That’s why it’s important to pay attention to sales trends and statistics that relate to commissions.
In 2022, a lot of predictions have been made about how sales performance will look for the coming year. We’ve taken a look at some of the recent sales stats reported. Based on that, we determined which ones will have the most impact on common commission calculations.
Commission administrators need to keep an eye on sales trends in case something that comes along impacts commission tracking.
Read on to get more information about these sales stats and trends and how they could affect commissions.
Average Yearly Quota
Account executives selling software as a service are on the hook for $770,000 in annual contract value. Of course, this statistic factors greatly if you’re in SaaS. However, organizations operating outside of that industry may target other quotas. As of 2013, the average yearly quota for any inside sales rep came in at $985,000, according to the Harvard Business Review. That’s likely grown in the last decade.
Any organization adjusts quotas over time to account for things like inflation. It’s important to be aware of changing quotas for your entire team as you calculate commissions each cycle.
Outside sales reps, the ones out in the market and having face-to-face meetings average a 65 percent quota attainment. That stat outpaces inside sales reps by about 10 percent. Although, the cost of an inside sales call is on average about 16 percent of what an outside one runs.
Whether or not your sales team as a whole or individual sales reps attain quota impacts commissions. This kind of information needs to be incorporated into commission tracking at all levels. If an organization offers accelerators, decelerators, or any other quota-dependent element, quota attainment is key to calculating that.
Sales Referral Rates
Often organizations reward commission for a successful referral. In fact, we here at Core Commissions provide a referral bonus. It’s important for organizations to stay competitive when offering such a bonus. Companies that established a referral program saw an 86 percent increase in revenue growth over the past two years. In order to incentivize that referral program, commissions tracking needs to keep up with its rates and performance.
Sales Onboarding & Turnover
The average sales rep requires almost five months to reach their full potential. In that time, they’re training on the product and with the team. They also need to get to know the customer. During the onboarding process, commission administrators need to be aware of start dates, training rates, and other changes that will take place.
Those same sales reps will generally spend less than three years on the job meaning that the process has to start all over again. By delivering reliable commission tracking and distribution, organizations can increase the tenure of that candidate.
With Core Commissions, your commission tracking can be prepared for all of these sales trends and more. Contact us for more information today or set up a free demo. We’ll walk you through how our application can handle even the most complex calculations.