Sales Commission Rate

  • Direct Sales Commission Rate – The percentage of the Bookings value earned by an individual Sales Representative for closing an opportunity. The rate will vary between software subscription, subscription services and non-recurring services. Sales Commission Plans or Sales Incentive Plans (SIPs) offer various incentives that increase the sales commission rate if certain criteria are met. The following two components are involved in calculating the Direct Sales Commission rate: Base Commission Rate (BCR) – This is the sales commission rate earned by sales representative for closing Bookings contracts and is calculated as a % of the Bookings value.
  • Accelerator – The Accelerator is an additional percentage added to the BCR for all Bookings above a certain amount, which is usually the sales representatives’ quota.

Loaded Sales Commission Rate – The percentage of the Annual Contract Value earned by the individual Sales Rep as well as all qualified team members for closing an opportunity. Other members of the sales team typically include sales management, sales operations and sales engineers. Companies with a sales partner (Partnership, OEM, Channel) strategy will incentivize the appropriate team to avoid conflicts between direct and partner channels.

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