The 2 Most Common Sales Incentive Plan Mistakes

This week’s guest author Carl Moe is the author of Sales Revenue System 2.0 / Your Chief Revenue Officer B2B Success Model and Managing Director of CRO Success, a Minneapolis based ‘revenue as a system’ engineering organization. CRO Success specializes in helping Chief Revenue Officers (CRO’s) restructure their revenue system for sustainable growth and optimized performance.

Moe began his career in Detroit selling computer-based production automation systems to the auto industry. Next were decades of officer and executive roles in global technology-based evenue Systems.  He has conducted business in 14 foreign countries outside North America holds BSE & MBA degrees from the University of Michigan in Ann Arbor in Organizations prior to becoming an executive coach and corporate resource.
He can be reached at
cmoe@CROsuccess.com or 952-232-6720.
Incentive plans are the most underutilized tool available to Chief Revenue Officers (CRO’s) in terms of achieving their performance objectives.  The two most common incentive plan mistakes we see today are:

1. All business (new account and continuing sales to existing accounts) earns the same incentive.
2. Companies try to ‘cap’ sales incentive earnings.
First, new account business is ALWAYS worth more than ongoing business from existing accounts because prospecting, qualifying and closing a new account is more difficult plus it’s the best way for a business to generate sustainable growth.  Businesses typically default to a “one size fits all” plan for administrative simplicity and miss one of the best opportunities to train salespeople to GROW the company instead of just booking the easy business (low-hanging fruit) that was likely coming in anyway.  One size fits all plans are simply toxic to building sustainable long term revenue performance.

Second, we still see executive teams almost paranoid regarding the possibility of a sales person closing a big deal and earning more income than some C-suite members.  Capping a performance based incentive plan makes about as much sense as a CEO announcing a management ‘cap’ being placed on the current year’s projected revenue and earnings.  The real issue here is top level sales talent is not a commodity resource and when companies don’t recognize and pay them what they are worth, they will find someone who will do that.