What is a sales accelerator?
Sales accelerators are a great way to motivate your sales team and increase productivity — when they’re executed well.
In this short article, we’ll answer the question of what a sales accelerator is and why it could be a significant benefit for your business.
What is an accelerator in sales commissions?
A sales accelerator is a component of a sales compensation plan designed to motivate and reward sales representatives for above-average performance. It’s one of the various monetary incentives employers offer to encourage them to sell more.
For example: if a sales rep closes 110% of their quarterly sales quota, the sales accelerator clause may mean they earn an additional 5% on top of their normal commission. Depending on the plan, that 5% might only be applied to the portion of sales over quota, or it could be applied retroactively to all the sales in that period, resulting in a significant increase in income.
Sales commission accelerators reward high performance, and decelerators penalize underperformance, such as failing to meet a minimum quota. For example, if your total closed sales fall below 70% of your quota, you may receive a smaller payout for your commissions.
What are the benefits of using sales accelerators?
Adding a sales accelerator into your sales compensation plan is a reliable way to boost sales and increase overall business activity. In one study, the Harvard Business school found that businesses that used accelerators had 13% more revenue and 2% higher total profits than companies that didn’t use accelerators.
The more significant benefit of sales accelerators is increased productivity in your sales team. With the promise of additional rewards comes an increased effort to attain those rewards. A sales accelerator can lead to a higher-performing and more engaged workforce.
What are the downsides of accelerators?
There are some unfortunate downsides or risks to using accelerators in your sales organization.
The first is the additional burden for your sales managers. It will ultimately fall to them to ensure that the team understands how the sales accelerators work and what they need to do to benefit from them.
The second is how much more complexity it adds to the calculation and administration of commission. Organizations that use traditional formula builders or spreadsheets to administer compensation may struggle to maintain pay accuracy given the added complexity.
The final potential downside we’ll cover here is its effect on those underperforming employees. It can be disheartening for those that consistently fail to get the accelerator, turning it into a disincentive for the middle and lower performers.
Sales Accelerators Are Worth the Investment
Sales accelerators are powerful when included in your arsenal, but there are some risks if you do not plan and execute them carefully.
No two businesses are the same, and you must customize your sales accelerators to be as effective for your business and motivate the people on your team. It will take some trial and error before you find an accelerator structure that works.
That all adds a layer of complexity that can slow down your sales compensation process, confuse your sales reps and frustrate your sales ops analysts.
However, once you have got past that awkward stage where your salespeople are figuring out how to adjust their practices and improve upon them, you should notice an increase in sales.