I'm in the middle of finalizing Alfresco's (for the Americas) sales compensation plan. It has been one of the most difficult things I've ever done. You'd think it was just a matter of setting commission percentages and accelerators, but it's harder than that. It's very difficult to fine-tune incentives so that nomads work for the group.
One of the aspects of creating the plan was what to do with renewals. Some of Alfresco's peers comp renewals - others don't. Some give full commission and booking credit in the first year, and then 50% commission credit (and no booking credit) thereafter.
I've opted to fully comp and credit renewals. Why? Because it aligns interests between the salesperson and the customer. (One large open source company has apparently adopted this model recently, having started with a "no reward for renewals model," so companies of any size can adapt to it.) …
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