The ROI of a tiered commission structure

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Cons One potential disadvantage of a tiered commission structure is that can emphasize volume over quality.

For example, if an outbound SDR team is compensated for the number of meetings they book, a tiered commission structure might encourage a quantity-over-quality mindset. This incentivizes them to book as many meetings as possible, rather than with prospects who are the right fit.

Compared to a flat-rate commission plan, tiered commission structures also have more variables to keep track of, which can make them more difficult to design, implement, and manage. New companies who don’t have access to incentive compensation management tools might find it more challenging jamaica whatsapp lead to manually track a tiered commission plan.

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The return on investment (ROI) of a tiered commission structure can be significant if implemented properly. A well-designed tiered commission structure can motivate sales representatives to sell more, leading to increased revenue for the company.

In addition, a tiered commission structure can help you identify top-performing sales reps, who will receive recognition and rewards for their exceptional work. This can help to retain top talent and reduce employee turnover – which saves costs on recruiting and onboarding in the longterm.