Multiplier (commission multiplier) is a factor that increases or decreases a rep's commission based on specific criteria such as performance, deal characteristics, or strategic priority. Multipliers are used to dynamically adjust commissions without changing the underlying commission structure. According to Alexander Group (2024), 45% of sales organizations use multipliers in their commission plans.
Multipliers provide flexibility in commission design:
According to Gartner (2024), strategic multipliers increase sales of targeted products by an average of 31%.
| Type | Description | Example |
|---|---|---|
| Product multiplier | Increases commission on specific products | 1.5× on new product |
| Performance multiplier | Based on quota attainment | 1.2× at 120%+ attainment |
| Customer multiplier | For strategic customer segments | 1.25× on enterprise customers |
| Seasonal multiplier | Compensates for seasonal swings | 1.3× in Q1 (low season) |
| Quality multiplier | Rewards deal quality | 1.1× for multi-year contracts |
Commission plan:
Rep: Sarah closes a deal:
| Calculation | Formula | Result |
|---|---|---|
| Base commission | $70,000 × 8% | $5,600 |
| + Product multiplier | $5,600 × 1.5 | $8,400 |
| + Enterprise multiplier | $8,400 × 1.25 | $10,500 |
| Final commission | $10,500 |
Multiplier impact: $4,900 extra (87.5% above base commission).
| Method | Formula | Result (at $5,600 base) |
|---|---|---|
| Additive (1.5× + 1.25×) | $5,600 × (1.5 + 1.25 - 1) | $9,800 |
| Multiplicative (1.5× × 1.25×) | $5,600 × 1.5 × 1.25 | $10,500 |
Most companies use the multiplicative method, but clearly define in the commission plan which method applies.
Multipliers below 1.0× reduce commission and are called decelerators:
Keep it simple: Maximum 2-3 multipliers per deal to avoid confusion.
Communicate clearly: Reps should be able to calculate their expected commission.
Time-limit strategic multipliers: Product launch multipliers should have expiration dates.
Monitor stacking: When multipliers combine, commission can rise quickly - consider setting a cap.
Multipliers adjust commission at the deal level based on characteristics. Accelerators increase commission based on overall performance above quota.
Technically yes (below 1.0), but they're then called decelerators. They're used to reduce incentive for unwanted behavior like excessive discounting.
Make multiplier tables easily accessible and show them in real-time in commission dashboards, so reps can see the impact on each deal.
Multipliers add complexity to commission calculations. With Prowi, you can configure multiple multiplier types, automate calculations, and give reps instant visibility into how multipliers affect their commission.