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How Do You Pay Your Sales Force

Chart showing how variously-sized companies pay their sales forces: salary, incentive program, or combination.
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For 10 years now, the combination plan (base salary plus incentive) has reigned supreme. But among companies with $5 million to $25 million in revenues, the use of combination plans dropped 18 percentage points, from 82% two years ago; the use of "straight salary" rose 10 points. The smallest companies still make the most use of incentive-only (commission) plans to pay their sales force.*

* * *

Percentage of companies using:
Companies with
Straight Incentive Combination

revenues of: salary only plan**

Less than $5 million 20.8% 18.1% 61.1%

$5 mil. - $25 mil. 24.5 11.0 64.5

$25 mil. - $100 mil. 13.9 10.6 75.5

$100 mil. - $250 mil. 13.8 -- 86.3

More than $250 million 13.3 11.2 75.4

Overall 19.4 13.1 67.5

* * *

*Senior, intermediate, and entry-level sales reps

**Includes companies that use all three plans

Source: "Sales Force Compensation," a survey of U.S. companies, 66% with sales of less than $25 million, the Dartnell Corp., Chicago, 1992.




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