You have a high velocity of sales and lower contract values.
Commission with Accelerators & Milestone Bonus
Hoping to incentivize consistency when dealing with a high velocity of sales? This is the sales comp plan for you. Warning: Can promote sandbagging if you’re not careful.
When to use this plan?
Why use a Commission with Accelerators & Milestone Bonus plan?
This combo incentivizes consistency.
Customize the Commission with Accelerators & Milestone Bonus Plan
Like this plan? Sign up for QuotaPath for free to add your business inputs and adjust the variables.
Forecast earnings & plan performance
See potential earnings based on your inputs and goal attainment progress.
Check the health of your Quota:OTE ratio
Use the calculator to quickly measure how realistic, attainable, and healthy your OTE to quota ratio is.
Streamline plan management
Assign the plan to your team and automate sales commission calculations. Be confident your team is being paid fairly and accurately.
How to adjust this compensation plan template
To customize this plan, you will input these 7 variables.
On-Target Earnings (OTE)
OTE combines base salary with variable pay and represents the total amount of money your reps can expect to earn if they hit 100% of quota.
Pay Mix
Refers to the percentage of a salesperson’s total compensation, made up of base salary, commission, and other incentives. The most common pay mix in SaaS is 50/50.
Company Revenue
Revenue is the total amount of income that a company generates from its primary operations. In SaaS, annual recurring revenue is one of the most important metrics.
Quota:OTE Ratio
This ratio quantifies how much larger a quota is to a sales rep’s OTE. The most common multiplier in SaaS is a quota 5x that of the OTE, but this will vary based on size and stage of the company.
Annualized Quota
An annualized quota is a sales goal that is set for a year
Average Contract Value
Often abbreviated to ACV, this number represents the average deal size that your company sells.
Quota Period
Your quota period sets the frequency at which your team’s quota resets. In SaaS, the most common quota period is quarterly. However, this number will vary based on your sales cycle.
What is an accelerator in sales?
An accelerator pays reps a higher commission rate once they achieve a pre-determined percentage toward quota attainment, deal size, or total amount of sales in a month or quarter. Accelerators are also known as multiple rate commissions.
What is a milestone bonus?
A milestone bonus in sales compensation is earned once the rep achieves designated stipulations and is paid a set amount, as a result. These bonuses do not vary if the rep is below or above these prerequisites. Any deals that come in below quota, the rep earns nothing. Reversely, any closed/won opportunities that finalize after the rep his quota, the rep will not earn any additional bonuses.
Are accelerators necessary?
Accelerators (and decelerators) incentivize overachievement of quota and serve as rep motivation. Not only are they one of the most common compensation plan components (80% of comp plans use accelerators), but they’re very well understood by sales reps. If you’re hoping to see a lot of reps overachieve, we suggest including accelerators.
Is this plan too complex?
It’s considered one of the more complex sales commission structure examples. If you’re hesitant about this compensation plan being overly complicated, you could try one of our other commission plans like Account Executive: Commission with Accelerators or Single Rate Commission with Contract Term Multiplier.
How long are comp plans supposed to be for?
Typically, your comp plan will align with your fiscal calendar. But that doesn’t mean you set it and forget it until the year’s end. Instead, conduct ongoing evaluationss throughout the year. Measure its efficacy. Experiment with SPIFs, review team and individual attainments, note average contract values (ACV) and time to close, and adjust accordingly. Keep documentation and data on everything to inform the next comp plan.
What does compensation mean?
In sales, compensation is the amount a rep makes or can make when incorporating bonuses, commissions, and other forms of variable pay. Most sales positions today blend a base salary with sales incentive compensation. To learn the basics, check out our blog.
How can you automate the sales compensation processes?
QuotaPath can remove the manual entry of commission tracking and sales compensation by automating the entire process. Immediate visibility into real-time earnings data and forecasted deal and attainment views motivate reps and increase revenue. See your comp plan in QuotaPath today by booking a demo with the team.
Explore similar compensation plans
Commission with Accelerators
The most popular account executive commission structure in SaaS, this plan rewards over performance. Works best when you’re confident about your quotas and targets.
Commission with Accelerators & Decelerators
This comp plan works best when you’re very confident in your targets. But, if you see a lot of variability or seasonality between quota periods, like ecommerce, this won’t work as well.
Milestone Bonus
Works best paired with another compensation plan, but you can run it on its own when you need to throttle growth, such as limited inventory.
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