Wren Zhang· Job Architecture Lead, Silverline Media
Asked in Sales Compensation ·
I look after sales compensation for a medical devices business in Germany, about 60 quota carriers selling capital equipment to hospitals. A typical tender runs 12 to 16 months from first meeting to purchase order, so a rep who inherits an empty territory in January has almost no chance of closing anything they started before the year ends.
This year we gave ad hoc relief to nine people, each one argued separately with the sales director. It was slow and nobody thought it was fair. Finance wants a rule instead of a negotiation.
Has anyone written quota relief into the plan itself for long-cycle selling, and what did the rule look like?
7 helpful · 2 insightful · 4 replies · 249 views · 4 following
Accepted answer· by Wesley Iversen
We stopped treating it as relief and changed the measure. For capital equipment reps, 30% of target incentive now pays on milestones that happen inside the year: tender shortlisting, a signed clinical evaluation, a technical award. The other 70% pays on orders. A new rep can earn the milestone part in year one and the order part catches up in year two. Milestones are confirmed by the tender desk, not by the rep or the manager, which answers the gaming point above. Two years in, we have had three relief requests in total.
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Benefits Manager, Steinbach Industrie
We sell diagnostic imaging in the Nordics with similar cycles. Our rule: a rep taking over a territory gets quota built from the weighted pipeline they inherit, not from the territory's history. If the inherited pipeline covers less than 40% of a standard quota, the quota is reduced for the first two quarters and steps back up to full by quarter four.
It took the argument out of it because the input is a CRM report anyone can pull.
Benefits Analyst, Silverline Media
Careful with pipeline-based relief. We tried it and within a year outgoing reps were quietly closing down opportunities before a handover, or managers were inflating them, depending on who benefited. You end up auditing the pipeline instead of arguing about relief.
HR Business Partner, Northwind Logistics
Accepted answer
We stopped treating it as relief and changed the measure. For capital equipment reps, 30% of target incentive now pays on milestones that happen inside the year: tender shortlisting, a signed clinical evaluation, a technical award. The other 70% pays on orders. A new rep can earn the milestone part in year one and the order part catches up in year two.
Milestones are confirmed by the tender desk, not by the rep or the manager, which answers the gaming point above. Two years in, we have had three relief requests in total.
Wren ZhangCRP, CEP
Job Architecture Lead, Silverline Media
Thanks all. I took the milestone idea to our sales director and he liked it more than I expected, mainly because the tender desk already records those stages. We will pilot it with the 14 reps in the hospital capital team from January and keep the old plan for consumables.
