Pay Your Hunter Sales Reps to Win

Today's blog post is by Christopher Cabrera, CEO of Xactly Corporation, the industry leader in sales compensation automation.

Do you pay your hunter sales reps to perform their best?  This role is important to companies of all sizes. Hunter sales reps account for new sources of revenue.

A team focused exclusively on new business should be a separate group with its own rewards. The sales cycle for cultivating new accounts is longer than, say, subscription-based customer renewal. You need to compensate accordingly.

How?

Hunter reps have to do more work than other salespeople do. That's because they have to sell customers on something entirely new. You need to compensate and reward this additional effort.

Hunter reps play an important role in whether certain deals close or not—your incentive compensation plans should account for this responsibility with a higher variable portion in their pay mix. We recommend between 50-60% variable pay, but the best ways to optimize pay mix with variable pay can vary.

Your commission plans should also offer higher payout levels as reps hit higher goals. Make sure you set appropriate quota levels for your industry and individual rep territories. Here are tips for setting fair and accurate quotas.

Most companies set annual quotas. But in some industries quarterly and monthly quotas make more sense.

Be sure to review past performance when setting payout percentages and quotas.

You should also use your commission software tool to run what-if scenarios with your data analytics tools. That way, you can course-correct in advance.

Getting advanced

Do you credit revenue differently for different products, services or on some other metric? Make sure you write these rules into your commission tracking software. If you use spreadsheets for tracking sales compensation, this could take a long time to do. It's also likely you’ll make errors. (See here for more on what's wrong with spreadsheets.)

You may want to set additional rules to split credit for certain sales across a team, give credit for deals in a geographic territory or assign credit based on a product line.

Be careful to only give credit for business that the sales representative can influence. If you only measure quota attainment, you aren't tracking profitability, so watch for discounting.

Remember, pay more for risk. Pay less for deals that are easier to close. What motivates your hunters?

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This post is part of Xactly Corporation's blog series on job goals and how to best reward for them. It started with rewarding support specialists and incenting your renewal team, also known as farmer sales reps.

The series celebrates the launch of the Xactly Plan Store, which makes customized sales incentive compensation plans available in our solution for small-to-medium businesses.