A Comp Plan That Drives the Right Behaviours, Not Just Activity.
Sales compensation and incentive design that aligns rep behaviour with company revenue targets. OTE benchmarking, quota methodology, commission mechanics and accelerator design that motivates performance at every level.
Sales compensation is one of the highest-leverage levers in a revenue organisation. A well-designed plan drives the right deals, at the right deal size, with the right customers, and retains the reps who deliver them. A poorly designed plan creates exactly the wrong behaviour: discounting to close, ignoring small accounts that add up, churning customers who were sold the wrong product, or leaving to join a company with a more motivating structure. Koldconvert designs comp plans from the revenue model up, so every mechanic is affordable, motivating and aligned with what the business actually needs.
What is sales compensation design?
Sales compensation design is the process of structuring how salespeople are paid relative to their performance against defined targets. It encompasses the base-to-variable split appropriate for each role type, the on-target earnings figure that benchmarks against market rates, the quota methodology and how individual quotas are set, the commission rate and payout mechanics, accelerator rates for above-quota performance and any additional incentive structures including SPIFs and performance contests. A well-designed comp plan is affordable within the revenue model it is designed to produce, motivates the specific behaviours the company needs to grow, is simple enough for reps to understand without external help and retains the performers the company most wants to keep. A poorly designed plan does the opposite on each dimension simultaneously, creating overspend on the wrong deals, demotivation among the best reps and a finance team that cannot predict compensation cost as the headcount scales.
The Compensation Architecture Components
OTE and Base Benchmarking
Benchmark on-target earnings and base salaries against market data for each sales role, geography and company stage. The anchor that ensures the comp plan attracts and retains the talent it needs without over- or underpaying.
Quota Methodology
Design the quota-setting methodology: top-down from revenue target, bottom-up from rep capacity or hybrid. Set individual quotas at the level where 60-70% of reps should achieve them in a healthy quarter, with clear process for new hire ramp periods.
Commission and Accelerator Structure
Design the commission rate, payout frequency and accelerator mechanics for above-quota performance. Build the structure that creates significant upside for top performers without creating a cost model that breaks at high attainment.
SPIFs and Contests
Design short-term performance incentive programmes for specific behaviours: launching a new product, penetrating a new vertical, increasing deal size or accelerating pipeline at a specific stage. Targeted incentives that supplement rather than replace the base comp plan.
Signs Your Comp Plan Needs Redesign
- Reps are optimising for the metric you pay them on rather than the outcome you need. Heavy discounting to close quickly, avoiding complex deals that take longer to close even at higher value, or ignoring expansion revenue because the comp plan only rewards new logo acquisition.
- Your best reps are leaving and citing comp as a factor. OTE has not been benchmarked against market rates recently, or the accelerator structure does not provide enough upside for top performers relative to what competitors offer.
- Quota attainment is clustering: either very high numbers of reps hitting quota (quotas too low) or very low numbers hitting quota (quotas too high or too inconsistently set). Neither produces the performance distribution a healthy comp plan should generate.
- The comp plan is so complex that reps cannot calculate their expected commission without a spreadsheet or a conversation with finance. Motivational plans require line of sight: reps need to know what an action is worth before they take it.
- The compensation cost model has surprised the finance team at least once. Unanticipated high attainment or a structural error in the accelerator design has created a payout that was not in the financial plan, triggering a mid-year comp plan change that damaged rep trust.
From Revenue Model to Comp Architecture
Revenue Model Review
Understand the unit economics of the revenue model: average deal size, sales cycle length, gross margin by product, churn rate and growth targets. The comp plan must be affordable at the target revenue model before any specific mechanics are designed.
Role and OTE Design
Define the role archetypes across the sales organisation, benchmark OTE against current market data for role, geography and company stage, and design the base-to-variable split appropriate for each role type's degree of closing responsibility.
Quota and Accelerator Design
Set the quota methodology, design individual quotas with new hire ramp consideration, build the commission rate structure and design the accelerator mechanics that create meaningful upside at above-quota performance without breaking the cost model.
CRM Configuration and Launch
Configure the CRM to track all metrics the comp plan pays on, build the commission calculation model in the comp management tool, and run the rep launch communication that ensures every person on the team understands their plan completely.
The Koldconvert Comp Architecture Framework
The Koldconvert Comp Architecture Framework starts from a single premise: what you pay for is what you get. Every element of a comp plan is a behavioural instruction to the sales team. Commission on revenue without margin guardrails instructs reps to discount. Commission on new logo only instructs reps to ignore expansion. Commission with no accelerators instructs top performers to stop pushing at quota. Our design process maps the behaviours the business needs, identifies the comp mechanics that produce those behaviours, stress-tests the cost model at multiple attainment scenarios and then layers in simplicity as a final design constraint. The comp plan that emerges is one where reps can calculate what any deal is worth before they close it, where top performers are meaningfully rewarded beyond quota, where the plan is affordable across the attainment distribution and where finance can model the cost. Simplicity and correctness are not in tension. A correctly designed plan is always simpler than a poorly designed one because it does not need complexity to compensate for structural errors.
The most common comp design mistake is adding complexity to solve a behavioural problem that should have been solved with a simpler plan. A rep who is closing the wrong deals needs a plan that pays differently for the right deals, not a plan with five additional metrics, two kickers and a quarterly bonus gate that nobody understands fully. Complexity kills the motivational effect of a comp plan because reps cannot maintain a clear mental model of what each action is worth. When in doubt, the rule for comp design is: if a rep cannot calculate their expected earnings for a specific deal in their head, in thirty seconds, the plan is too complex. That test eliminates more bad design decisions than any benchmarking database.
Koldconvert Revenue Operations Team
What You Receive
- Revenue model analysis confirming the affordable comp cost range at quota, at 80% attainment and at 120% attainment across the full sales headcount
- OTE benchmarking report for each role type against market data for geography, company stage and industry vertical
- Comp plan design documents for each sales role: base, OTE, quota methodology, commission rate, accelerator tiers and any additional incentive mechanics
- Commission calculation model with scenario modelling at multiple attainment levels to confirm the cost model is affordable and the payout curve is motivating
- Quota-setting framework with methodology documentation and the ramp schedule for new hires by role type
- Rep launch communication pack: plan summary in plain language, worked examples for common deal scenarios and FAQ covering the questions reps ask most often at launch
Tools and Platforms We Work With
Sales compensation, answered
Sales compensation design is the process of structuring how salespeople are paid relative to their performance. It covers OTE, base-to-variable split, quota methodology, commission rate and accelerator mechanics. A well-designed plan motivates the right behaviours, is affordable and is simple enough for reps to understand without a spreadsheet.
OTE, on-target earnings, is the total compensation a rep earns at 100% quota attainment: base salary plus the full variable component. It is the benchmark against market rates for each role, geography and company stage, and is the anchor for all other comp mechanics.
Enterprise AEs typically operate at 50:50 to 60:40. Mid-market AEs at 60:40 to 70:30. SDRs and BDRs at 70:30 to 75:25. Customer success managers with renewal targets at 80:20 to 70:30. The ratio should reflect the degree to which the individual controls the revenue outcome.
Comp plans fail for three reasons: the plan incentivises the wrong behaviour, the plan is too complex for reps to understand their earnings in real time, and quotas are set incorrectly. All three are design problems. A correctly designed plan is always simpler than a poorly designed one because it does not need complexity to compensate for structural errors.
Plans should be reviewed annually at minimum, aligned with the business planning cycle. Reviews should also be triggered by significant changes in the sales motion, product, deal size or market. A plan designed for a transactional motion will misalign when the business moves to enterprise sales.
How to Work With Us
Comp Plan Audit and Redesign
A 3 to 4 week engagement to audit the current comp plan against the revenue model, identify the behavioural misalignments and produce the redesigned plan with cost model and rep communication pack.
Full Comp Architecture Build
Complete compensation architecture for a new or scaling sales organisation: OTE benchmarking, quota methodology, commission design, accelerator structure, comp management tool configuration and launch.
Annual Comp Review
Annual compensation review service: benchmark OTE against current market data, evaluate whether the current plan is producing the intended behaviours and recommend adjustments for the new financial year.
Ready to build a comp plan your best reps want to stay for?
Book a strategy call. We will review your current comp mechanics, identify the behavioural misalignments and scope the redesign.