Commission Gates And Brakes

Sales people the world over are creaking under the strain of corporate cost cutting. Those departing of self accord go with no replacement, basics are frozen, bonus plans squeezed. I came across a number of specific measures from Big Blue that, the sales team suspects, feature the further erosion of sales numbers as a facet.

The main issue was a “gate”. No commission at all is paid until 55% of target is attained. Whilst a floor of this sort is nothing new (and often an essential extra motivator), this particular threshold does appear eye-poppingly high.

Another measure seems destined to change the team-sales ethos of IBM for good. The days of multiple deal splits are over. Commission pay outs are now given to just one or two key people, rather than the old established prevailing practice of awarding pieces of the pie to all and sundry that claimed influence on the deal. Although I for one could never quite fathom how some deals made money in such culture, so perhaps is a more realistic shift long overdue.

One final rabbit punch is that items that qualify for commission are being reduced. For instance, Services. Once fully paid out on, they are now zero percent rated. That’s a huge shift.

There are of course mitigating forces here. Clients are undeniably spending less. Potential new prospects ‘asset sweat’ as they elongate cycles making do with what they’ve already got. Larger sales territories can slightly offset falling deal till-rings, but the overall trend is clear. Sales pay packets are not bounding ever upward.

For anyone involved in their own, one-on-one sales plan negotiations, right now or later in the year, the IBM approach can serve as a good reminder of what your opposite aims should be. Document accurate figures for market shrinkage as part of your prep. Yes, take a larger turf, but try and extend the net of what counts towards your numbers. And if you must conceded something, try a gate, but nowhere near 55% of course.