Sales commission and comp structure model

Commission and margin on the same line, per closing and per rep, with three alternative structures tested against last year's actual book. Pay for the margin you wanted instead of the volume you asked for.

$1.0M

Reference-scale value

Data sets in the model

6 weeks

Build and deploy

Derived

Evidence grade

The decision this model makes

A flat commission pays the same on a full-price sale and on one that took nine thousand dollars of incentive to close. The rep is not being greedy. The plan told them volume is what counts, and they believed it.

Commission runs 2.8% of revenue across twenty-two reps, and almost no builder has ever joined a commission payment to the margin it was paid on.

That join is the build. Everything else is arithmetic on top of it, and the moment a closing carries both the commission paid and the margin earned, the structure conversation stops being a philosophical one.

The model tests three alternative structures against last year's actual closed book, so every rep can see what they would have earned rather than what they might.

Cause 01

Structure-driven discount

Points conceded because nothing in the plan rewards defending price. Shared with the elasticity model.

Cause 02

Accelerators on incentivised volume

Thresholds hit with volume bought rather than sold. Owed under the plan as written, and worth redesigning.

Cause 03

Unrecovered base

Bottom-quartile reps carrying full base and draw. A people decision, reported separately.

Cause 04

Calculation error

Splits, cancellations, rescissions and rate changes. Pure arithmetic, and the highest recovery rate in the model.

Want more detail?

The rest of this model — the data sets it runs on, the cause split, the working behind the reference figure and a sample output — goes out by email. Two fields, nothing else.