Commission models

Twelve ways to pay for a deal.

Every model, with the payout curve, a worked example and when to use it. Most plans combine two or three. Prowi runs any of them live.

12 af 12
By roleAll rolesAccount ExecutiveSDRAccount ManagerCustomer Success
By goalAllGet started fastHit one targetReward over-performanceProtect the downsideSupport new hiresReward teamworkKeep customersPush one thing now
Flat rateGet started fast

One fixed percentage on every deal. Quick to implement, understood in a minute, scales with headcount.

Example
Fordele
  • Promotes a shorter sales cycle
  • Good introduction model
  • Trivial to explain and audit
Ulemper
  • Does not reward over-performance
  • Not suited to complex or margin-sensitive products
Bedst tilNew sales teams, transactional products, first commission plan.
flat1
  • Account Executive
  • SDR
  • Startup or early stage
  • New product or territory
  • No historical data yet
  • You want a plan reps can remember
Milestone bonusHit one target

A fixed bonus paid only when a specific milestone is hit, typically 100% of quota. Simple, binary, and easy to budget.

Example
Fordele
  • Promotes one specific behaviour
  • Good supplement to another model
  • Predictable cost
Ulemper
  • Does not work on its own
  • Cliff effect at the threshold can cause sandbagging
Bedst tilOn top of a base model, to focus attention on one number.
milestone1
  • Account Executive
  • Account Manager
  • You want one behaviour, not a curve
  • You need to throttle growth (limited inventory, delivery capacity)
  • As a top-up on another model
AcceleratorReward over-performance

The rate steps up once quota is exceeded. Everything above 100% pays more per euro, which is why strong quarters get stronger.

Example
Fordele
  • Promotes over-performance
  • Keeps top reps selling in the last weeks
Ulemper
  • Can be complex to forecast
  • Cost rises fastest exactly when budgets are tight
Bedst tilMature teams where the quota is realistic and the upside is real.
accelerator2
  • Account Executive
  • Quotas are realistic and trusted
  • You want top reps selling in the last weeks
  • SaaS or recurring revenue
TieredReward over-performance

Several rate bands by attainment. Each band pays its own rate on the revenue inside it, so the curve bends upward gradually rather than at one cliff.

Example
Fordele
  • Promotes over-performance
  • Gives more predictability than one big step
  • Fair at every level
Ulemper
  • Can be complex to understand
  • Reps need to see their band live to act on it
Bedst tilTeams with a spread of performance, where mid-performers should not be left behind.
tiered2
  • Account Executive
  • Account Manager
  • A spread of performers on the team
  • You want mid-performers rewarded too
  • Predictability over one big step
DeceleratorProtect the downside

The mirror of an accelerator: a lower rate below a threshold, protecting the company from paying full commission on weak quarters.

Example
Fordele
  • Protects cost on low performance
  • Reinforces the quota as a real target
Ulemper
  • Can demotivate reps who are behind
  • Needs careful communication
Bedst tilCombined with an accelerator to shape both ends of the curve.
decelerator2
  • Account Executive
  • You are very confident in targets
  • Low seasonality between periods
  • Paired with an accelerator
Gross marginProtect the downside

Commission on profit instead of revenue. Discounting directly reduces the rep’s payout, so pricing discipline pays for itself.

Example
Fordele
  • Aligns reps with profitability
  • Discourages discounting
Ulemper
  • Margin must be trustworthy and visible
  • Harder to explain than revenue-based rates
Bedst tilServices, hardware, resellers, anything where price is negotiated.
margin3
  • Account Executive
  • Account Manager
  • Price is negotiated on every deal
  • Margins vary by product or delivery
  • Services, hardware, resellers
Draw against commissionSupport new hires

A guaranteed advance each period, offset against commission earned. Recoverable draws are repaid from future commission; non-recoverable ones are not.

Example
Fordele
  • Gives new hires income security
  • Smooths lumpy months
Ulemper
  • Recoverable debt can build up
  • Administratively heavy without a system
Bedst tilRamping hires and long sales cycles.
draw2
  • SDR
  • Account Executive
  • New hires ramping
  • Long sales cycles
  • Lumpy months
Split commissionReward teamwork

Several people share the commission on one deal by a fixed rule: the SDR who booked it, the AE who closed it, the account owner.

Example
Fordele
  • Rewards collaboration
  • Fair on complex deals
Ulemper
  • Rules need to be explicit
  • Disputes when roles are unclear
Bedst tilTeams with SDR/AE handoffs or overlay specialists.
split2
  • SDR
  • Account Executive
  • SDR → AE handoffs
  • Overlay specialists on deals
  • Team selling
Team bonusReward teamwork

Variable pay tied to a team or company target instead of the individual. Everyone earns when the group hits the number.

Example
Fordele
  • Builds collaboration
  • Simple to administer
Ulemper
  • Free-rider risk
  • Weak link between own effort and reward
Bedst tilSmall teams, customer success, or as a top-up to individual plans.
team1
  • Account Manager
  • Customer Success
  • Small teams
  • Customer success or support
  • As a top-up to individual plans
ResidualKeep customers

Ongoing commission for as long as the customer stays active. Rewards retention and quality of sale, not just the close.

Example
Fordele
  • Rewards keeping customers
  • Compounds for loyal reps
Ulemper
  • Cost grows with the book
  • Ties reps to accounts they no longer work
Bedst tilSubscription businesses, insurance, agencies with retainers.
residual2
  • Account Manager
  • Customer Success
  • Subscription revenue
  • Insurance, agencies, retainers
  • Retention matters as much as the close
ClawbackKeep customers

Not a rate but a rule: commission is reversed if a customer churns or cancels within a set window.

Example
Fordele
  • Protects against bad-fit sales
  • Encourages honest qualification
Ulemper
  • Unpopular if the window is long
  • Needs clear, documented terms
Bedst tilAny recurring-revenue plan, alongside the base model.
clawback2
  • Account Executive
  • Any recurring-revenue plan
  • Onboarding or delivery risk
  • Discount-heavy sales
SPIFFPush one thing now

A short, fixed-amount incentive on a specific product, period or behaviour. Loud, temporary, and separate from the main plan.

Example
Fordele
  • Moves attention fast
  • Easy to switch on and off
Ulemper
  • Loses effect if always on
  • Can cannibalise the main plan
Bedst tilProduct launches, quarter-end pushes, clearing stock.
spiff1
  • Account Executive
  • SDR
  • Product launches
  • Quarter-end pushes
  • Clearing stock or a specific SKU