Here are the best things I read, watched, or listened to last week.

7-11 Takeover? 7-11 is my favorite company and brand on earth. They BETTER not rebrand 😲

MLS What is Going on? This is why we have a bad reputation for Soccer in the US! Come on man….

I Like Big Mergers! (and I cannot lie!) 🍑

“It Girl” $23 smoothie. Very demure, very mindful also, lol at $23 ✨

The Origin of Demure & Mindful Must watch… iykyk

How to Structure a Sales Team Bonus Plan

When it comes to motivating a sales team, few tools are as effective as a well-structured bonus plan. Seriously. The company scales. They make bank. They’re stoked. You’re stoked. It’s a win-win type a thing, you know?

I’ve learned that the key to a successful bonus plan is aligning the team’s efforts with the company’s strategic goals while rewarding individual achievement.

Key Lessons Learned

1. Clarity and Transparency: The first lesson is that clarity is crucial. Every member of the sales team should understand exactly how the bonus plan works, what targets 🎯they need to hit, and how their performance will be measured. Transparency eliminates confusion and helps build trust.

2. Alignment with Company Goals: The bonus plan must be tightly aligned with the company’s strategic goals. Whether it's increasing market share, boosting revenue, or launching a new product, the bonus metrics should reflect these priorities. This ensures that the team’s efforts contribute directly to the company’s success.

3. Balance Between Individual and Team Goals: A successful bonus plan strikes 💥 a balance between individual achievements and team performance. This prevents a silo mentality and encourages collaboration. It’s important to recognize and reward both personal and collective contributions.

4. Flexibility and Scalability: Markets change, and so should your bonus plan. It’s essential to review 🔍and adjust the plan periodically to ensure it remains relevant and effective. Flexibility ensures that the bonus structure can adapt to new challenges and opportunities.

Structuring the Bonus Plan

1. Setting Individual Sales Goals

For individual sales reps, the bonus plan should focus on personal sales targets. These targets should be ambitious yet attainable, and tailored to each rep’s territory and market conditions. Key metrics to consider include:

• Sales Quotas: Define clear sales quotas for each rep. These quotas should reflect both volume and value, ensuring reps focus on high-quality sales.

• Customer Retention: Encourage reps to not only acquire new customers but also retain existing ones. Bonuses tied to customer retention promote long-term growth.

It’s really important to manage both new and existing customers. You must do this if you want to be successful 📈 over the long term and often times, increasing existing customer revenue is easier than closing new deals. 

2. Higher-Level Metrics for Channel and Revenue Leaders (think 

For channel and revenue leaders, the bonus plan should encompass broader metrics that reflect the overall health 💪🏻 and growth of the sales channels they manage. Consider the following metrics:

• Total Revenue Growth: Link bonuses to overall revenue growth. This encourages leaders to focus on strategies that drive substantial financial returns.

• Market Penetration: Reward leaders for expanding the company’s presence in existing and new markets. This can be measured by market share growth or entry into new territories.

• Profit Margins: Ensure that revenue growth does not come at the expense of profitability. Tie a portion of the bonus to maintaining or improving profit margins.

3. Tying Bonuses to Key Goals

The bonus plan should clearly tie individual and team performance to the company’s key goals. Here’s how to do it:

• Define Key Performance Indicators (KPIs): Identify the most critical KPIs ⚡that align with your strategic objectives. These could include revenue targets, new customer acquisition, market expansion, and customer satisfaction scores.

• Weight the Metrics: Assign different weights to each metric based on its importance. For example, if revenue growth is the top priority, it should carry more weight in the bonus calculation than other metrics.

• Set Tiered Bonus Levels: Create tiered bonus levels to reward varying degrees of achievement. This can motivate the team to strive for higher performance levels. For instance, achieving 100% of the target 🎯 could earn a base bonus, while exceeding the target by 20% could unlock a higher bonus tier.

Bonus: ➡️Uncapped bonuses can be a fine line to walk, but done right can yield very very good results for the company and the employees. Done wrong, they will be extremely costly to the organization. Use with caution.

Meet our Sponsor! Deep Ocean Partners. Also, here’s how I almost missed the biggest opportunity ever…. In early Tenzo days, we received a massive Purchase Order for a dream partnership deal but didn't have the cash to make it happen. So, we used working capital to finance the inventory, and the 6-month payback period 📆 gave us the breathing room to get paid for the sale, cover the loan, and reinvest the profit back into growth. This is how you keep the momentum rolling. 🚀 If you need a trustworthy lender with competitive rates, hit me up — I’ll introduce you to my friend over at Deep Ocean Partners. I know they can offer 2.5x - 8x longer payback and other game-changing terms.

Anyway, keep pushing the envelope on what your sales team can achieve, and don't forget to celebrate the wins along the way. 💪 By the way, what’s the most creative sales incentive you’ve ever come across? Let’s keep the conversation going and continue to learn from each other! 🪶

Peace out 👋

Steve

Founder Tenzo & Commerce Chronicles

PS: If you made it this far, feel free to share it with friends!

PSS: If you want to sponsor Commerce Chronicles - we’re offering extremely good starting rates. Hit me up!