What is a tiered commission structure?

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A tiered commission structure is a type of sales commission plan that offers different commission rates for different levels of performance. Higher levels of performance earn higher rates of commission. This structure is designed to motivate salespeople at every stage of a financial period, and throughout every stage of a sales cycle, by increasing their commission rates as they close more and more deals.

A tiered commission structure can be used in conjunction with base salary or on its own for commission-only reps.

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Best practices for designing a tiered commission plan
Designing a tiered sales commission plan requires diligence iceland whatsapp lead to ensure it is effective and fair for your entire team. Here are a few key considerations to keep in mind when you set out to build a tiered commission plan.

Set clear and measurable goals
Your compensation plans begin with the sales goals that will guide your rewards. It’s important to set clear and measurable sales goals that align with the company’s overall revenue goals, and to clearly communicate them to all sales reps so they understand what is expected of them.