It’s Time To Change The Software Sales Compensation Plan

The B2B software sales compensation model hasn’t changed in decades: a rep closes a deal and gets comped for the revenue. It’s time for a change.

Why now?

  1. The need for sales to bring in the ‘right fit’ customers to reduce the chance of churn is more critical than ever.
  2. Buyers have so many options. The days of single vendor and monster deals are dwindling; the industry is moving fast to ‘land and expand’ models.
  3. Traditional sales and marketing techniques aren’t working as well to convert new prospects. Sales teams need to focus on getting more customer referrals.

Adding advocacy to your sales compensation model can boost your revenue and reduce churn. Advocates help companies grow 2.5 times faster than their competitors, because advocates spend 13% more than the average customer and refer business equal to 45% of the money they spend, according to Satmetrix.

It’s time to incentivize sales to focus on the long-term customer value—not just the short-term revenue.


In addition to comping on closed deals, a portion of your reps’ salary should be tied to creating advocates.

Advocates are your most enthusiastic and successful customers. The more advocates you have, the more positive word of mouth, testimonials, reviews and social media buzz you can expect to receive. Your advocates will also become your extended sales team by providing you with referrals, references and case studies. Their efforts can help you drive sales and close new deals faster. Your sales team needs these things—so why not incent them to make it happen?

Here’s how do we do it at Influitive:

educating sales reps on advocacy1. Educate your sales reps about the importance of advocacy

It’s crucial that your sales reps see how advocacy will benefit the company. Show them examples of how advocates are helping you reach your long-term goals.

Be sure to explain how advocacy will help each rep individually. For example, can your advocates send them referral leads that will turn into new sales? The more your reps see the benefits of advocacy, the more they will ensure your customers’ success.

rewarding sales reps for advocacy2. Give your reps rewards and recognition when they build advocacy

If you want to change your reps’ behavior, you have to make it worthwhile for them to change.

First, tie advocacy into their commission. I recommend that this portion is 10-20% of your reps’ total earnings. The amount should be meaningful, but it shouldn’t take away from their core job.

Here at Influitive, we reward reps when a customer becomes an advocate and we continue to reward the rep for every act of advocacy the customer performs indefinitely. Although using our AdvocateHub platform makes this process easy, you don’t necessarily need software to reward your reps; a spreadsheet might do the trick.

comping sales reps on advocacy3. Ignite your reps’ competitive sides

A little friendly competition can go a long way in boosting your company’s advocacy. We have a leaderboard in our office that constantly shows our sales reps’ advocacy points. Seeing their numbers every day motivates our reps to build more advocates—and beat their colleagues.

Comping based on customer advocacy works! By encouraging our sales team to seek out potential advocates—and nurturing our new customers with an advocate marketing program—we have received 782 referrals, 123 testimonials, and 187 online reviews so far this year. As a result, we can attribute 20% of this year’s new business to customer referrals. Not too shabby for a pretty small sales & marketing team.

The Little Black Book of B2B Referrals

littleblackbook-cover-232x300-transThis how-to guide has everything you need to know to about taking your referral process from desperate and awkward to downright irresistible. In this eBook, you’ll learn:

  • The real reasons your customers just aren’t that into giving you referrals
  • How to nurture your customers using advocate marketing—before you ask for a referral
  • Creative ideas for inspiring your advocates to send you new referrals on the regular
  • How other B2B marketers use advocate marketing to get high-quality referrals

Download now

6 Responses to It’s Time To Change The Software Sales Compensation Plan

  1. […] Step 4. This one may be a bit of a chore, but you must make sure your reps keep customers in the loop on the status of their referral. If your team doesn’t do it, customers won’t refer again. Just think of how angry you get when someone says “I’ll call you!”…and then you never hear from them again. Crack the whip on this one, or find a way to incentivize reps to do it. […]

  2. […] and bring them into an advocate marketing program. If possible, start an incentive program that rewards CSMs and reps who recruit new advocates from your user […]

  3. […] than provide compensation around short-term goals that are focused on one functional area, tie performance to the larger goals of the customer-centric […]

  4. […] team to focus more on driving customers success, instead of closing bad deals to meet quotas. Try changing the sales compensation plan to give out bonuses based on Net Promoter Scores and advocacy, she […]

  5. […] Mark changed the comp model, and he paid reps who had high renewal rates four times the amount the reps who had abysmal renewal rates were getting paid. He gave those reps training, and he helped them understand who are our best fit customers and how to facilitate a buying process. We need more leaders who are willing to measure not just on the close, but on the customer’s success. […]

  6. […] different departments helped Blackbaud reach its program goals. Amy’s team sought out their most excited sales reps to help invite customers to the Blackbaud Champions advocate marketing program, and drive referrals. […]

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