Sales Rep Salary [How To Incentivize Sales Reps To Perform]

Did you know that around 80% of sales come from just 20% of your sales team. That’s not to say the other 80% are underqualified, but it could suggest a lack of incentive to strive for better results.

How do you re-motivate your team and attract new, high-performing salespeople? 

By offering a competitive sales representative salary, attractive employee benefits, and the best results-driven incentives.

Read on to learn how to motivate and incentivize your sales team in a way that gets results.

What Is A Sales Rep Incentive?

A sales rep incentive rewards the best salespeople for their hard work. Often related to goals set by the company, they can be monetary and non-monetary rewards. 

Incentives are separate from your sales representative salary structure. A sales rep salary keeps them working to a standard level, but incentives push them to exceed their typical performance metrics.

Types of Sales Incentives

Sales representative salaries are often structured in one of three ways: Salary only, base salary plus commission, or commission only.

The salary of sales representatives won’t always motivate your team to go above and beyond. But incorporating effective commission structures will. Below are five popular incentive structures. Each can be customized to fit the objectives of your business. 

1. Role-specific Incentives

Different incentives work for different people. A sales rep who closes deals may need different incentives to lead nurturing reps. If everyone in your sales team has a specific role, offer individual incentive programs to help motivate them.

2. Split Incentives 

If you have multiple salespeople working in a specific role or location, you might want to offer split incentives. The commission is shared equally – motivating them to not only work as a team but to gain as many sales as possible.

Split incentives are tricky to manage, as they require the whole team to be equally as motivated. You don’t want reps that aren’t pulling their weight and reaping the benefits of the rest of the team. 

3. Pre-sales Incentives 

Service and software-based businesses may want to consider a pre-sales incentive structure. Companies with long sales cycles can’t expect reps to stay motivated until they’ve closed the deal. Instead, business owners should consider incentivizing staff based on incremental goals.

Incremental incentives could be for scheduling a certain number of demos per quarter, or for processing a set number of quotes. These smaller bonuses give staff the recognition they need to keep doing what they do best.

 4. Omnichannel Incentives

Sales reps aren’t always there at the purchase point. Sales teams inspire and drive sales, but the end purchase is made by the customer online. In this scenario, companies need to trace purchases back to the sales rep that found the customer.

These incentives need advanced tracking to be implemented. You want to track every point of contact up until the end purchase. No matter how long the process takes.

5. Analytics-based Incentives

If you don’t already use analytics to track your sales team, it’s certainly time to start. 

Analytics-based incentives recognize people for specific efforts rather than generalized goals. With detailed analytics, you might find that while one sales rep appears to close the most deals, another is actually a lot more efficient. Which ultimately saves you time and money.

By analyzing your team’s behavior, you can offer incentives that really motivate each individual. Far more than the average sales representative pay does alone.

How To Motivate Your Salespeople

It takes a certain type of person to succeed in sales. But that doesn’t mean every sales professional is the same. Business owners still need to take time to understand what motivates different individuals. Below are three options that may work.

Treat Your Sales Team

A good salary for sales representatives is one thing, but there are other ways to motivate your team. Experiences and freebies can be a great way to incentivize staff in a way that doesn’t break the bank.  

Remember, different people will be motivated by different things. A Friday of paid leave or Air Miles for their next holiday will appeal to different team members.  

You could also keep the treats in-house. Taco Tuesdays or free barista-style drinks in the office help staff feel appreciated daily.

Use A Commission Structure 

Commission structures allow staff to take the average sales representative salary to new levels. Simply by doing what they do best.

Some common commission structures are:

  • Tier-based commission – Commission increases incrementally based on the number of deals they close or the amount of revenue generated. Example: Earning 10% commission on deals below $100k, 15% over 100k, 25% over $300k.
  • Gross margin commission – Commission based on the profits of each sale, rather than the revenue itself. If the sales rep racked up many expenses to seal the deal, their commission would be reduced.
  • Residual commission – The best commission for SaaS companies or subscription-based models. Reps continue to earn commission as long as the client stays signed up with the company. Sales reps are compensated for bringing in long-term, valuable clients and reducing customer churn rates.

Pay Presale Incentive

We’ve mentioned presale incentives above, and they are the perfect way to motivate staff in long sales cycles. It also helps new members of the team get their foot in the door. 

Presale incentives bolster a sales representative salary on a regular basis. They give staff a little boost every month to keep them motivated – even when they feel like closing a deal is taking forever.

Sales Representative Pay: Setting Up Pay Structures For Your Sales Team 

To set up an effective sales rep salary pay structure, you should first speak to your employees. Things that motivate the sales reps in one company may not be as effective in another. You might find out this information when you’re in the hiring phase of getting your sales team together. To learn more about how to hire a sales team, read this article next.

As with anything, certain pay structures are more favorable than others. 

The Best Compensation Structure For Salespeople

Uncapped commission alongside a decent sales rep salary is the ultimate dream. The salaries are often dependent on experience level. 

Unlimited commission allows staff to reach for the sky, as there’s no limit on how much they can earn. This structure is also a win-win for business owners; there’s so much opportunity to earn, and the base sales representative salary can be lower. This means business owners continue to get their money’s worth from each member of staff. 

It also helps businesses attract the right people. The structure suits sales reps with a great track record for landing deals. As a business, you’ll have to provide less training, and the team will get straight to work. 

Uncapped commissions incentivize sales reps with or without a base salary. 

Change Compensation Method

If your current setup doesn’t seem to be getting the most out of your team, it’s time to change your compensation method. 

Nothing lasts forever, and people’s priorities change. What works for a group of 40-something sales reps, won’t necessarily work for a Gen-Z or millennial team. 

Creating A Long-term Employee Benefit Plan

Employee benefits are ‘work perks’ that are standard for all staff. They can make your job offering much more appealing. Common benefits include private healthcare, free gym memberships, or on-site daycare. 

How do you create an attractive employee benefit plan? Especially one that sites alongside a sales representative’s earnings? Read these tips.

Consider Your Business Goals

Company goals may relate to sales, diversity, or employee turnover. When relating goals to a sales rep salary, you’ll want a mix of incremental and long-term goals.

Incremental goals can be monitored monthly or quarterly. When reached, employees will gain access to smaller bonuses and benefits. Reaching long-term goals – like yearly sales targets – would then lead to a larger compensation. 

Mixing the two types of goals keeps the finish line in site for employees, while still recognizing their efforts along the way.

Assess Employee Needs 

After setting goals, break down how each employee plays a role, and what will motivate them. Start by understanding the team’s demographic, and what might be important to them.

  • What is the average age of the team? 
  • Is it male or female-dominated? 
  • Do most people have families? 

Work perks that appeal to the women workforce may seem irrelevant to males in the office. Family activities and experience days aren’t motivating for young, single professionals. You get the idea.

A study by Fractl found that women would be more inclined to apply for roles offering remote working or free daycare. Meanwhile, men prefer team bonding events, company retreats, and on-site fitness facilities.

Prioritize Benefits 

You need to establish which benefits will help you get the most out of your team. Here are a couple of scenarios to consider: 

  • Offering on-site daycare means staff can come into the office earlier, or leave a little later. This gets your business a little more for your money each day. 
  • Company retreats give workforces the chance to bond outside of the working environment. This can ultimately boost relationships within the office and provide more seamless working. 

Think about how offering certain benefits will positively impact your employees. Because happy employees are good for business, adjust your employee benefits accordingly.

Tips for Creating An Effective Sales Representative Salary Structure

Without a clear strategy, you can’t create an effective sales rep salary. Or an attractive incentives structure, for that matter. 

To create a comprehensive incentive program for your sales team, here are three tips:  

1. Coordinate with Sales Ops to Reward the Right People 

How do you currently measure the top performers in your sales team? 

Without a strong relationship with your sales ops team, you could be rewarding the wrong people. Reps missing out on rewards and bonuses will feel their efforts go unnoticed or underappreciated. 

And they’ll soon find another business to offer them a better deal.

You need to be able to measure the performance of everyone in the team, so you can reward specific behaviors that set a precedence for everyone else. And to do this, you’ll need the help of the sales op team.

2. Align the Prize with the Behavior

A sales representative salary structure needs to reflect performance. A $100 meal voucher or the promise of a 1% pay rise next year won’t keep the best sales reps motivated for the next quarter. 

You need to offer significant prizes to create significant changes in behavior. By setting clear goals with a high incentive, you’ll see your sales team race to the top to try and win the prize. 

Imagine: Someone can earn a sales representative average salary, plus a tiny commission on closed deals. Will this motivate them to find only the best clients, or will they look for any customer they can get over the line? 

After a few months, these low-value customers may just as easily be snapped up by a competitor.

3. Rewards are Fun, But Real Recognition is Better

If you’re already offering a good sales rep salary, extra incentives don’t need to break the bank. These rewards are a bonus to show reps that their hard work doesn’t go unnoticed. 

Newbies can have a hard time landing top clients. But that doesn’t mean they should miss out on the commission or have their work go unrewarded. Newer reps’ achievements are especially important to recognize.

With a little acknowledgment from senior teams, you’ll find that newer reps feel more appreciated and motivated to perform.

Sales Representative Salary Guide: FAQS 

Do sales reps make good money? 

A sales rep is the third highest-paying job for those without a degree. The sales representative average salary lands at around $62,070 in the US. A sales rep salary is often linked to their performance, so they can make staggering amounts of money in commission if they’re willing to work for it.

Why are sales reps paid so much?

A sales representative salary is often based on a base salary rate plus commission. This means that sales reps that work hard to land clients, nurture leads, and generate sales can go on to earn a lot. It makes sense for businesses to reward staff, so they stay motivated to continue. 

Do sales reps only make commissions?

Sales representative salaries differ from company to company. Some sales reps will only make money in the form of commission when they make a sale. Commission-only payment structures can be a great way for businesses to keep staff motivated. Read our article to learn more about incentivizing staff to get the most out of your team.

What are the 3 types of commission?

The 3 types of commission are straight commission, salary plus commission, and base rate commission. Straight commission is when a sales rep earns a percentage of every sale. However, they don’t have a base salary. Salary plus commission gives a rep the security of a base salary, along with the incentive to generate sales for extra commission. Base commission is a set salary or hourly rate with no commission.

Wrapping Up: Optimize The Sales Rep Salary For Success

With the right benefits and commission structures, you’ll find yourself with only the best sales representatives for your business. And with a strong team, the possibilities are endless. 

At Scaling With Systems, we can help your sales teams create killer client acquisition funnels to give your sales reps plenty of opportunities to land those deals. To find out more about what we can do for your company, book a free consultation call, and one of our advisors will get back to your shortly. 

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