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The Tiered Commission Structure Every Business Owner Needs to Know
There’s a question I hear more than almost any other from business owners: “How should I compensate my salesperson?”
It sounds simple. It isn’t.
Get it wrong early and you create a situation that’s hard to fix. You either end up with a salesperson negotiating from a position you can’t push back on, or a top performer reconsidering their role after a change to commission. Both are expensive. Both are avoidable.
In this latest episode of Sales is NOT a Dirty Word, I break down how to build a compensation structure that works for you and your salesperson, without guesswork, frustration, or unintended leverage.
Here’s what I cover:
A strong compensation plan should be a win/win. If it doesn’t, it will show up in your results.
If you’re not sure how to structure compensation, start with your margins, identify what you need off your plate, and build from there. And if you want support doing exactly that, including building a repeatable and predictable sales process your salesperson can actually run, book a Sales Level Up Call with me: 👉 https://calendly.com/aleasha/salesteam-levelup
[00:55] Real client story: Inheriting a salesperson with a comp plan that does not work
[01:55] The Sales Diva phenomenon and why salespeople are very good at internal sales
[02:45] What a win-win compensation plan actually looks like and why profit margins matter
[03:35] Designing incentives around the behaviors you want: paid-in-full contracts, month-to-month tradeoffs
[04:00] The base salary principle: cover cost of living, drive everything else with commission
[04:45] Tiered commission structures and why unlocking levels beats a flat rate
[05:30] The three goal tiers: minimum viable, excited, and "gobs of money"
[06:00] Why you need to get comfortable with your salesperson being the highest paid person in the company
[06:45] The CFO trap: why cutting a top performer's comp is a short-term gain with a long-term cost
[08:00] Do not mess with a salesperson's money. Period.
[08:45] How to use KPIs to make performance conversations objective, not subjective
[09:15] Monthly vs. quarterly vs. annual bonuses and the 90-day brain science behind it
[10:05] Annual team goals as a retention and culture-building tool
[10:40] Why salespeople fail: no process, no training, no direction
[11:15] Outbound vs. inbound roles and how that changes the base
#SalesCompensation #SalesTeam #SalesLeadership #SalesIsNotADirtyWord #BlackSheepSales #HiringASalesperson #SalesStrategy #CommissionStructure #SmallBusinessSales #BusinessOwnerTips #SalesManagement #ScalingYourBusiness #RevenueGrowth #SalesProcess #EntrepreneurMindset #B2BSales #SalesCoach #WinWinSales #SalesPerformance #AleashaBahr
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By Aleasha Bahr
5
2323 ratings
There’s a question I hear more than almost any other from business owners: “How should I compensate my salesperson?”
It sounds simple. It isn’t.
Get it wrong early and you create a situation that’s hard to fix. You either end up with a salesperson negotiating from a position you can’t push back on, or a top performer reconsidering their role after a change to commission. Both are expensive. Both are avoidable.
In this latest episode of Sales is NOT a Dirty Word, I break down how to build a compensation structure that works for you and your salesperson, without guesswork, frustration, or unintended leverage.
Here’s what I cover:
A strong compensation plan should be a win/win. If it doesn’t, it will show up in your results.
If you’re not sure how to structure compensation, start with your margins, identify what you need off your plate, and build from there. And if you want support doing exactly that, including building a repeatable and predictable sales process your salesperson can actually run, book a Sales Level Up Call with me: 👉 https://calendly.com/aleasha/salesteam-levelup
[00:55] Real client story: Inheriting a salesperson with a comp plan that does not work
[01:55] The Sales Diva phenomenon and why salespeople are very good at internal sales
[02:45] What a win-win compensation plan actually looks like and why profit margins matter
[03:35] Designing incentives around the behaviors you want: paid-in-full contracts, month-to-month tradeoffs
[04:00] The base salary principle: cover cost of living, drive everything else with commission
[04:45] Tiered commission structures and why unlocking levels beats a flat rate
[05:30] The three goal tiers: minimum viable, excited, and "gobs of money"
[06:00] Why you need to get comfortable with your salesperson being the highest paid person in the company
[06:45] The CFO trap: why cutting a top performer's comp is a short-term gain with a long-term cost
[08:00] Do not mess with a salesperson's money. Period.
[08:45] How to use KPIs to make performance conversations objective, not subjective
[09:15] Monthly vs. quarterly vs. annual bonuses and the 90-day brain science behind it
[10:05] Annual team goals as a retention and culture-building tool
[10:40] Why salespeople fail: no process, no training, no direction
[11:15] Outbound vs. inbound roles and how that changes the base
#SalesCompensation #SalesTeam #SalesLeadership #SalesIsNotADirtyWord #BlackSheepSales #HiringASalesperson #SalesStrategy #CommissionStructure #SmallBusinessSales #BusinessOwnerTips #SalesManagement #ScalingYourBusiness #RevenueGrowth #SalesProcess #EntrepreneurMindset #B2BSales #SalesCoach #WinWinSales #SalesPerformance #AleashaBahr
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