Creating Incentives for Sales Teams

This is the most underrated problem I've seen when trying to build or expand partnership GTM: Leadership is initially fully behind a new partnership, excited about its potential, but that enthusiasm never makes its way down to the sales teams who are expected to execute. Without alignment, even the best partnership can stall before it has a chance to succeed. Why does this happen? Sales teams are often focused on their core products, and if a partnership doesn’t clearly benefit them or fit into their day-to-day operations, it becomes an afterthought. To turn things around, you need to make sure your partnership incentives, compensation, and training are in lockstep with the teams that will be selling your product. Here’s how to align incentives and drive results: 1. Ensure your incentives are compelling enough for frontline teams. It’s not enough to excite leadership—sales teams need a clear, tangible reason to sell your product. - Introduce a financial incentive or bonus structure that’s competitive with what reps earn on their core products. This could be a one-time bonus for the first sale, or an ongoing commission that rewards consistent effort. -Tie the incentive to their existing sales goals. If your product helps them hit their targets more easily, they’ll naturally prioritize it. 2. Structure partner compensation to motivate co-selling. If your partner compensation doesn’t align with their core goals, they won’t push your product. - Design a compensation plan that aligns with both the partner’s and your business objectives. For instance, if your partner’s core offering is hardware, incentivize bundling your software as part of the sale to create a win-win situation. - Offer performance-based incentives that reward partners for hitting key milestones—whether that’s a certain number of units sold, a specific revenue target, or even customer engagement metrics. Keep it simple and measurable. 3. Provide consistent training and engagement so your product isn’t just another checkbox. Sales teams won’t advocate for your product if they don’t fully understand its value or how to sell it. - Develop ongoing, bite-sized training sessions that fit into their schedules. Instead of overwhelming them with lengthy sessions, focus on 15-minute, high-impact trainings that teach them how to identify the right opportunities. -Pair training with real-time support. Join sales calls, offer one-pagers, and provide direct assistance during key customer engagements. When they feel supported, they’re more likely to feel confident pushing your product. This kind of alignment can make the difference between a stalled partnership and a thriving one. When sales teams are motivated, equipped, and incentivized to sell your product, the partnership stops being just another checkbox—it becomes a key driver of growth.

A sales rep makes $15K one month, then $3K, then $12K, then $6K. Every month is a fresh anxiety spiral about whether rent gets paid. And an anxious rep sells like an anxious rep: They are needy on calls, pushing too hard, and chasing every deal because they have to. Prospects are turned off by the desperation. They hear it and back away. Most sales businesses should build their comp plan around consistency, not just the peaks and valleys of their salesmanship. Every rep should be able to say: "At bare minimum, I make $X.99 every month." "Rent's paid, bills are paid, I can invest a little. And in a great month, there's a real upside of $Y on top." When a rep accepts what X is, they are no longer rocking up to calls desperate to just survive the next bill. They can let a bad-fit prospect walk. They play the long game because they're not drowning in the short one. This matters double for setters. What they do is strenuous and tedious: Calling, texting, DMing, emailing, prospecting all day, with none of the clean "I closed it, I get 10%" payoff a closer gets. So pay setters for qualified showed appointments, and bonus them for hitting activity thresholds over a time period. Reward the consistency of the work, because the work is what produces the pipeline. Comp plans tell your team exactly how to behave. If your reps are selling scared, look at the plan before you blame the people.

Most distributor incentives don't move the needle. 💯 Anyone that has worked at the distributor has seen a supplier at a sales meeting pitch a terrible incentive. Inside the whole room, except for the supplier, everyone knows that the incentive is going to fail. Here are the most common ways I have seen distributor incentives fail: 🔴 Incentive is for too few people or only executives. If you focus too few people, the rest of the team can lose interest if a couple people/teams run out to a big lead. Incentives for only executives is fool's gold. They work much less often and somehow the word always gets out and it now its weird with Field managers, KAMs, and top reps who really make the incentive happen. 🔴 No Incentive alignment with team & region sales goals. I can't believe when this one gets missed. If you are not listed as their focus brands (Quota/ Rank, Goals, etc) they send out every month. Your incentive can't pull them away from the current priority list. As soon as you talk about a time frame for an incentive, ask them if you can be listed. 🔴 The unattainable goal with the big reward. This makes the supplier look really tone deaf. "You all are going to make big money, just have to hit the goal!" Everyone has already quit on the inside. 🔴 The super hard to track incentive. It's tough when multiple suppliers ask the same distributor to read complicated dashboards, learn points systems, POS requirements, menu requirements, pricing requirements, supplier approval, buy allocated items, make our customers do a lot of work, etc. Make it easy for distributor reps to sell your product and easy for retail to buy it. When you have to call someone to explain to you, so you can explain to the team the incentive. Best Practices: ✅ Think about what you are trying to attain short and long term with the distributor incentive. ✅ Attainable Goals - Take the time to do the forecast work to see what the market and team can possibly do. Talk with your distributor and pressure test your goal. ✅ Run a deal for sell-in. With your incentive you now have extra of the distributors time and attention, make it easier for them. The deal matters. ✅ Sell through programming ready to go. POS, account programming, etc. Before the product hits the market, what can I do as a supplier to help retail & restaurants sell my product. ✅ Get the distributor wins on your own every week during the incentive. Trust me, you will thank me for this one.

I’ve seen a rep end the quarter at 68% of quota, not realizing she was only $5K away from doubling her earnings for the quarter. The comp plan had a 70% floor. Below that, she earned half of her commission rate. Above it, she earned full-rate retroactively. But she didn’t know how close she was. So she didn’t push, the quarter ended, and both she and the business left money on the table. That’s the problem with a comp plan your reps don’t actually understand: it can look right in a spreadsheet and still fail in the field. I’ve seen this happen in other ways, too. Another rep closed a two-year deal thinking she was doing exactly what the company wanted. On paper, that should have been the better outcome: longer commitment, more durable revenue, stronger customer relationship. But because of how the accelerators interacted with the discount she had to give, she actually made less than she would have made closing a one-year deal at list price. The comp plan was accidentally rewarding the easier, shorter deal. One principle I keep coming back to is that a comp plan should never give a rep a reason to avoid closing a deal today. If there’s ever a scenario where the rational answer is, “I should push this to next quarter,” that’s a design flaw. So don’t stop at modeling the plan. Walk reps through real scenarios and show them what happens at different quota thresholds. Show them how discounts, term length, accelerators, and product mix affect their payout. The plan only works if reps understand how to use it. 

Trying to drive margin discipline with a comp plan that rewards discounting is like trying to enforce a diet at an all you can eat buffet. Everyone says they’ll behave. Then Q4 hits and it’s wings, waffles, and 30% off enterprise licenses. 🕺 Michael Shields posted a killer story today via a convo he had with a CFO friend of his: - Renewal gets to the finish line. - Product is great. - Adoption is solid. - Support is top notch. But the CFO tanks the deal…because she found out a peer company got the same product…for way less. Not because of product failure. Because of pricing inconsistency. First off - let's be clear: the reps are NOT the villains. They’re just playing the game we set up for them. So if you want to fix the disconnect between short term bookings and long term trust? Fix the scoreboard. Here’s a few things I’ve seen work: 1. Tiered quota credit Reps can discount - but if they do, they get less credit toward quota. Discounting becomes a trade off, not a cheat code. 2. Discount guardrails - Set clear approval tiers. - Give reps flexibility up to a point. - But if they want to go beyond it, the CFO (or a pricing leader) needs to sign off. 3. Margin-based accelerators Reward healthy deals. - Hit quota and get 1.2x. - Hit quota and protect margin? Get 1.4x. 4. Pay on net revenue, not list price Wanna turn the dial to 11? Pay reps based on what the company actually makes, not the top line sticker. This one is definitely not for everyone…but it will fix misaligned incentives overnight. :) At the end of the day, if you want your reps to think like owners, they need to be comped like owners. And if you don’t fix that? The next “hero” deal you close might just be a churn story in 12 months.