Compensating for Field Sales Roles

183:906269490 • April 23, 2024

Incentivizing Success Beyond the Office

In a previous post on compensating inside sales roles, I kicked off my series on role-specific sales compensation with the goal of bringing attention to the complexity involved in making decisions about compensation. Inside sales has particularly been affected by Department of Labor (DOL) regulations on who is and isn't exempt from overtime, making it especially crucial to evaluate your inside sales role job content and comp plan.

Field sales has always been a bit clearer cut. You send your salespeople out into the field; they sell, and you give them commissions. But as more and more business is being conducted online, accelerated by the COVID pandemic, even field sales roles are evolving. In other words, if you haven't assessed your role descriptions and compensation plans since before COVID, it's time. In the rest of this post, I'll talk about some things that should be taken into consideration.

Understanding Field Sales Compensation

Field sales representatives are the frontline ambassadors of your company, forging connections with clients, understanding their needs, and closing deals in the field. Compensation often includes more at-risk pay than other roles, but the payoff is bigger for the organization.

A good sales rep finds this kind of setup motivating and is hungry for the sale, looking to hit target and beyond. They're the masters of their own destinies in this sense. The sky's the limit, as far as they're concerned. It's important to understand this when structuring compensation plans. You want to find that perfect balance between providing them enough security (base pay) that they feel safe to take risks and enough incentive (commissions or bonuses) to keep them focused on achieving more.

Compensation's purpose is to motivate the behaviors the organization needs to succeed in its overall objectives. That's why analyzing these roles and their corresponding comp plans is essential: each role performs differently in service to the overall strategy. Now, back to field sales.

Field Sales Compensation in the Post-COVID Landscape

The COVID-19 pandemic reshaped the way field sales professionals operate. Sales representatives who once relied heavily on face-to-face interactions have had to embrace virtual communication channels with the likes of seamless video conferencing and online presentations. While this shift has opened up new opportunities for reaching clients in distant locations, it has also required a reevaluation of traditional compensation structures.

This is going to look different in every sales organization, so it's important to sit down and read through all your role descriptions to make sure they still hold up in this more remote-friendly world. Some things to keep an eye on include:

Travel and Expenses

One of the most visible impacts of the pandemic on field sales roles has been the reduction in travel. This reduction in travel has far-reaching implications for compensation. Sales leaders must reassess the resources allocated for travel and entertainment expenses, ensuring that compensation packages remain equitable and reflective of the evolving nature of field sales roles. For example, field sales roles may no longer require a car or vehicle allowance if the percentage of travel required has declined based on the demands of the customer. Perhaps a home-based office allowance and improved computer is necessary instead.

Compensation Structures

In some cases, the changes brought about by a more remotely accessible world may mean making a complete reassessment of the compensation package for field sales roles. If a field sales representative is no longer traveling extensively and instead focusing on remote sales activities, their compensation structure may need to be recalibrated to align with their revised responsibilities and performance metrics.

For instance, if a significant portion of a field sales rep's compensation was previously tied to travel-related activity bonuses or incentives, these components may need to be adjusted to reflect the new reality of remote selling and the virtual aspects of the sales process. Similarly, if the shift to remote sales has led to changes in sales targets or performance expectations, compensation plans will need to be redesigned to incentivize shifted organizational needs with their corresponding behaviors and outcomes.

Balancing Remote Work with Field Visits

Compensation structures must strike a delicate balance between rewarding remote sales activities and maintaining incentives for in-person field visits where necessary. Sales leaders may consider introducing new performance metrics that capture the effectiveness of virtual sales engagements, such as conversion rates from virtual meetings or customer satisfaction scores for remote interactions. You may need to re-learn the perspective of the customer here.

Be sure to align the customer's and prospects' preferences for engagement with the job content. The belief is that the best outcome is aligned with the way the customer wants to interact and engage with your organization. Be sure to deliberately establish expectations for the job to ensure the appropriate level of face-to-face or virtual interactions that translate to the best outcomes for the clients as well as your organization. And the comp should follow that mix.

So, what do you do about field sales compensation after the analysis?

We've pretty much touched on your options, but once you've revisited the job content of your field sales role, if you're lucky and nothing has changed, then you're all good. But if you've found you need to make some significant changes to bring your sales program back into alignment with organizational strategy, you basically have two choices.

1. Change the role

2. Change the comp structure

Obviously, that's an over-simplification because within each of those choices is a whole task list full of things that have to get done, but that's why I wrote my first book, Starting Simple: Sales Compensation. In it, you get a simple rundown of everything you need to walk through and consider when establishing OR revising your plans.

Try out a free sample through Amazon Kindle, or grab your copy here:

Get the Book

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Structuring Timing for Maximum Success

By 183:906269490 • March 17, 2025

Over the past few weeks, we’ve delved into six crucial aspects of best practices in sales compensation: culture, financial due diligence, job content, pay mix, objectives, and plan mechanics. Each of these elements plays a pivotal role in shaping an effective and motivating compensation plan. Today, we turn our attention to another key component—timing. Defining Performance Period and Payout Timing There are two key aspects of compensation timing that affect how effective your compensation plan is at helping your organization reach its goals. These are: Performance Period : The timeframe over which sales performance is measured in the compensation plan—monthly, quarterly, annually, or per deal. Payout timing: The timeframe when a salesperson receives incentive earnings associated with their level of performance. While these concepts are distinct, they work together to influence sales behavior, business cash flow, and overall organizational success. Aligning Performance Period and Payout Timing with Organizational Objectives A well-structured performance period and payout schedule will reinforce your organization’s goals. For example, if you’re focused on rapid sales cycles and high transaction volume, you’ll probably use a shorter performance period and frequent payout timing to keep things moving along. On the other hand, if you’re prioritizing long-term account growth, large enterprise deals, or strategic selling, you’ll probably want to utilize longer periods (quarterly or annually) to encourage sustained effort and deeper customer relationships. Motivating Sales Teams with the Right Timing Salespeople are naturally driven by immediate, tangible rewards. If the gap between effort and payout is too long, enthusiasm may decline as the connection between work and reward weakens. On the flip side, overly frequent payouts—such as daily or weekly—could lead to transactional thinking rather than strategic selling. This is especially true when there are more frequent pay periods with very small amounts of pay. So before setting your performance period and cadence for payout, it’s essential to ask yourself what kind of behavior you’re trying to reward in your salesperson, as well as the sales function required to execute on your specific market and strategy. For long sales cycles where frequent payout timing simply doesn’t make sense, you’ll need to balance that by making sure your salesperson is aligned with organizational goals and that the salesperson is able to achieve meaningful levels of performance (as well as payout amounts) within that performance period. Best Practices for Performance Period & Payout Timing Choosing the right combination of performance period and payout timing is a strategic decision that shapes sales behavior and business outcomes. When well-designed, this timing structure maintains motivation, supports financial sustainability, and aligns sales incentives with broader company goals. A few best practices prevail: Align the payout to as close to the performance event (deal closing or otherwise) as possible, conditional on company affordability/sustainability Ensure that the performance period selected is closely aligned with the average sales cycle length. Generally, if there is a very short sales cycle, then a short performance period with quick pay is expected. That does scale up to very long sales cycles and longer performance periods with lesser payout frequency. Most organizations are somewhere in between. Be sure to recognize that it is specific to the sales role and not the company as a whole.

Plan Mechanics: Making it All Work

By 183:906269490 • March 3, 2025

In a way, we’ve already talked a lot about several components of sales incentive plan mechanics. We’ve covered the importance of culture , fundamental financial model ing, establishing job content , determining pay mix , and setting objectives . The next step will bring it all together. Some Important Sales Compensation Vocabulary We’ve previously described, at length, the two primary types of sales comp models (bonus plans and commission rate plans) as well as how to determine which plan best supports different sales roles. But there are a few other terms that are important to know when developing the underlying plan mechanics. The following list comes straight from my book Starting Simple: Sales Compensation . If you want a full but easy-to-understand breakdown of sales compensation, that book is the place to start. Accelerator--An increase in the rate of pay that occurs at a certain level of performance. Generally, this starts after the achievement of 100% of the target performance objective. Deal Cap--The maximum amount of pay on any single transaction Leverage--The sales incentive that would be paid out for performance between the target and the point of excellence. It is represented as a multiple of the target incentive Pay Curve--The slope of the line of the rate of pay throughout all levels of performance. Think of performance as the x-axis and payout as the y-axis. The pay curve represents the relationship between the two. In a fixed-rate plan, this is a straight line, representing a fixed rate of pay for every unit of measured performance (activity completed, dollar of revenue acquired, or percentage point of margin sold, etc.) Plan Cap--Maximum amount of pay under the construct of the plan Point of Excellence--The point on the pay curve that represents the 90th percentile of salespersons’ performance levels (should be greater than 100% of performance achievement) Rate of Pay--The amount of pay per unit of measurement. This encompasses the relationship between performance and payout at any point along the pay curve. Target--A point on the pay curve that represents 100% payout and 100% performance or (100%, 100%) Target Incentive--The sales incentive amount paid for achieving 100% of sales performance objectives Threshold--The point at which pay for performance starts. The threshold point should sit somewhere between 0% and 100% performance levels. It can be zero, which essentially means there is no threshold. Zero--The first point on the pay curve, represented by (0%,0%) for zero level of payout and zero level of performance Best Practices for Plan Mechanics A well-structured sales compensation plan aligns with your business objectives while keeping your team motivated. You need to balance risk and reward, ensuring that pay mix, thresholds, and accelerators drive the right behaviors. To evaluate whether your plan is driving the right behaviors, map your sales team’s performance along the pay curve—identifying where top, mid-level, and low performers fall. If most reps cluster near the threshold, the plan may not be motivating enough, while a heavy concentration at the high end could indicate overly generous payouts. A well-balanced distribution should show a clear progression, with incentives effectively encouraging continuous improvement and rewarding top achievers appropriately. Caps are controversial, and while they can help control costs, they can also discourage high performers. Accelerators, on the other hand, can be a powerful tool to motivate salespeople to exceed expectations. The key is to strike a balance—rewarding overachievement without creating unsustainable payout structures. Finally, sales compensation plans should evolve with business needs. In a future post, I’ll be talking about the importance of a regular review cadence for maintaining performance and fairness. When done right, plan mechanics create a system that doesn’t just pay salespeople but actively inspires them to excel.

How to Set Appropriate Targets

By 183:906269490 • January 31, 2025

Setting objectives is a constant balance between meeting your organizational goals and being realistic about the capabilities of your sales team. You want to be aggressive enough to reach revenue and profitability expectations as well as keep everyone motivated, but you don’t want to be so aggressive that your team feels it is impossible to succeed and just gives up. In part 5 of my Best Practices in Sales Compensation Series, we’ll go over some of the top things to consider for keeping your sales team engaged and successful. (Read Part 1 , Part 2 , Part 3 , and Part 4 ) When setting objectives for your organization, consider what you absolutely need versus the ideal you want; take into account the resources you have to work with (as well as the market situation and sales productivity); and create a target range ranging from easy to impossible—and place your target somewhere in the middle of that range. Types of Objectives There are several different types of objectives you might set for your sales reps. They can be sales process activities like making calls or qualifying leads. They can be progression milestones like hand-off triggers between internal teams or customer signoffs. But for our purposes, we’re going to focus on financial objectives such as revenue and profit. Best Practices for Setting Objectives Objectives need to align with organizational goals and provide achievable but challenging targets for the sales team. To accomplish this, consider these practices: Make sure that the salesperson has the ability to influence if not fully control, their capability to meet and exceed the objectives. Set realistic expectations. Unrealistic targets will stagnate your growth potential and give you a poor reputation with employees (as well as the labor market). Provide a clear and visible path to achieving the objective. Try to limit the quantity and types of objectives. More is not better. It’s better for a sales rep to be able to focus on a singular goal than to have their attention split in too many directions. Lastly, make a plan for what to do if your salesperson exceeds the target as well as underachieve target objective levels. These are just a few of the very important considerations in setting your objectives. Take some time to explore my blog or check out my books for a more in-depth look into sales compensation.

Getting Pay Mix Right

By 183:906269490 • January 14, 2025

Best Practices in Sales Compensation Part 4

Job Content is Foundational in Sales Compensation

By 183:906269490 • December 16, 2024

In my first Best Practices post, I talked about the importance of knowing what you can pay for your sales roles before worrying about what the market is saying. In my second post, I covered ways to utilize culture in a sales organization . The following Best Practice in sales compensation involves job content. Job content plays several roles in your compensation plan: 1. It gives your salesperson a guide to what success looks like in their role. 2. It gives you a guide to evaluating the performance of your salesperson. 3. It rationalizes differing levels of variable pay outcomes for varying performance levels. 4. It provides your organization with the structure needed to comply with any reporting, pay transparency, or other regulations. Hopefully, that’s enough to convince you of the importance of taking the time to define your new roles and revisit the definition of your existing roles. Now, here’s how job content actually does those things. Defining the job The first role of job content is to define the who, what, where, when, and how of the function. It can be tempting to borrow a job description from LinkedIn, Glassdoor, etc., with the assumption that the content will be similar enough to fit your needs. However, the way a specific role performs is unique to the organization it’s acting in, which is why it’s important to take the time to define the job from scratch. Here are the questions you should be answering in your job content: What does the person need to do on a daily basis? How does this individual pursue sales, and in what segment or with what type of customer? Where should they focus their time and attention when building a pipeline of deals? Who should they be interfacing with, both internally and externally? When do they engage with customers and/or prospects? What portion of the sales process do they own or support? How do they interface with and influence decision-makers? Now, even though I said to write your job description from scratch, that doesn’t mean this is the time or place to get too creative. Job seekers are going to be searching by job title or category, so it’s essential to stick to the common vernacular regarding industry jargon and expected job titles. Job Description: A Byproduct of Job Content Another positive outcome of creating job content for your roles is that you will have generated much of the information needed for a job description if or when you’re ready to hire. Information such as: Job duties and responsibilities that clarify the type of work and engagement with customers. Qualifications/Requirements that are both minimum and desired. Those include education, knowledge, skills, capabilities, and competencies. Performance measures of the role include items like achieving sales targets, new logo acquisition, development of pipeline, accuracy in forecasting, etc. With all of this information on file, it will not only be easier for you to prepare to hire for the roles you want, but it will also be easier to evaluate existing employees in those roles. Beyond all of that, you’ll be well prepared for competitive market research and establishing your variable pay program. I’ll be posting more best practices on the blog, but if you’re anxious to dive deeper into the subject of sales compensation, you can grab a copy of my book Starting Simple: Sales Compensation and consider working through the companion Workbook to build a sales compensation plan from scratch.

Sales Comp Guy