In an earlier post, I wrote about aligning sales compensation plans to strategic accounts.

 

If you manage or are thinking about creating a key accounts team, what is the best way to reward them for delivering on expectations?

 

Here are three possible key accounts team incentive plans and the pros and cons to take into consideration for each:

 

  1. Team Performance Plan
  2. Portfolio Plan
  3. Renewal Model

 

Team Performance Plan

This plan takes the variable pay component and splits incentives between overall team goals and individual goals. This plan can be effective when large account teams are in place and spread across multiple geographies.

 

Team Goal Examples: Total account revenues, growth over year prior, gross margins and customer satisfaction.

 

Individual Goal Examples: Winning specific sales opportunities, meeting key ownership objectives in the strategic account plan or growing/developing share of wallet in the individual’s market geography or vertical.

 

Team Performance Plan Pros Cons resized 600

 

Portfolio Plan

Much like a stock portfolio, this plan focuses on growth of the account. The measurements here can be based on individual or team performance inside the account. This plan might be useful when your key account team is segmented by vertical or end market.

 

Goal Examples: Revenue growth, profit improvements, growth of wallet, cross/up-sell improvements, product or segment churn.

 

Portfolio Plan Pros Cons resized 600

 

Renewal Model

Primarily used with a “defend” strategy, this model focuses on the team’s ability to consistently retain existing revenues. If you are saturated with an account (rare) or are holding onto revenues in a declining legacy account, this option is worth consideration.  

 

Goal Examples: Contract renewals, repeat orders, churn rate exceeds average, price/margin holds or increases and customer satisfaction.

 

Renewal Model Pros Cons resized 600

 

There are a number of creative and innovative ways to compensate your key accounts team members. In many cases, sales leaders borrow parts of each of the above purist models to make the components work well for their business strategy.

 

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