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Who Gets Credit for the Sale?

By Jon Randall, Towers Watson  |  January 2015

For some companies, the question of "who gets credit for the sale?" is a non-issue because a single selling role is able to represent the full offering of products or solutions, make the pitch and close the sale without any support or teaming from other roles. Who gets credit for the sale? The salesperson, of course.

For other companies, however, decisions on who to credit and how can be more complex. This article focuses on three scenarios associated with aligning sales crediting rules with go-to-market strategy:

  • When team selling or some form of collaboration is a fundamental component of selling strategy.
  • When the company seeks to support a multichannel go-to-market strategy.
  • When the company needs to ensure disciplined salesforce deployment to the right market opportunities.

Scenario 1: When Team Selling is Fundamental

For some companies, the ability to draw upon a broad range of products and expertise to deliver an integrated solution that best meets customers' needs is a core component of the customer value proposition. For these companies, a successful sale typically will require the collaboration of more than one role.

Sometimes the collaboration is among roles that bring different types of expertise to the sale. For example, the collaboration might combine expertise across a broad product/solution offering, combine product/solution expertise with industry and account-specific knowledge, or combine in-depth product knowledge with process consulting or implementation expertise. Other times, it's about getting the same role to collaborate, such as when the sell-to or "purchasing" customer is located in one territory and the ship-to or "using" customer is located in another territory in the same company but requires influence, installation and/or post-sales support.

In either scenario, the challenge is how to credit multiple sales roles for collaborating on the same deal without escalating the compensation cost of sale. As outlined in Figure A, two options are available: double/multiple sales crediting and split crediting. The best-fit approach generally depends on the form of incentive in place.

For roles that are rewarded through a goal-based target incentive plan (such as when a sales achievement earns a percentage of a target incentive instead of a percentage of the actual sale), the ideal approach is to both double quota and double credit. (Despite common use of the term "double" crediting, the concept can extend to more than two sales roles.) This approach allows multiple contributing sales roles to receive full sales credit for the sale against a quota, which, importantly, has been adjusted to allow for the fact that the company is allowing double/multiple sales crediting to occur.

Under this approach, sales roles have every incentive to team on sales. Their quotas have been adjusted to reflect some amount of additional sales that are expected to flow from this collaboration, and they receive 100 percent credit for the sale. At the same time, by adjusting quotas appropriately, the company controls its compensation cost of sale.

For roles that are rewarded through a commission structure, in which the incentive is a percentage of the sale and the commission rate is not adjusted based on assigned quotas, the better option is to split credit for the total sale among those who directly contributed to closing the deal. Under a credit-split approach, if two people participated in closing a deal, one salesperson earns 50 percent of the sales credit and the other earns the other 50 percent (or any variation such as 60 percent/40 percent, 70 percent/30 percent, etc.)

A credit-split approach has some potential downsides that require sales leaders' attention to overcome. For example, some sales employees might prefer to focus on sales opportunities that do not involve a splitting of credit, so sales leaders need to clearly lay out expectations for team selling and hold employees accountable. In addition, determining the appropriate sales credit "split" is often a case-by-case decision that can consume a fair amount of sales management time. Despite these potential shortcomings, a credit-split approach is the preferred approach under a commission structure, because assigning more than 100 percent sales credit without adjusting commission rates would escalate costs.

Figure A: Sales Crediting Options Overview

* Despite common use of the term "double" crediting, the concept can extend to more than two sales roles.

Scenario 2: When the Company Uses a Multichannel Strategy

Many companies pursue a multichannel strategy, such as having physical stores or branches and online sales, to reach customers. From the company's perspective, multiple channels make sense as it strives to reach a wider customer base, support "ease of doing business" for the customer and manage its overall cost of sale. However, when salespeople in branches, stores or in the field feel that they are competing with online or other channels, their sales and service behaviors can undermine the customer experience and the effectiveness of the overall multichannel strategy.

In this scenario, the sales crediting challenge is to structure sales crediting so that the salesforce is channel-agnostic, meaning it does not matter to the salesperson which channel customers use to place orders.

The solution is to give branch or field sales roles the credit for any sale that comes from assigned accounts or geography, regardless of the channel capturing the sale. At the same time, quotas should be increased somewhat to reflect the additional sales expected to flow from other channels. This aligns sales role rewards with the success of the multichannel strategy and removes incentives to undermine the strategy.

Scenario 3: When the Company Needs Disciplined Salesforce Deployment

Most sales organizations try to intentionally deploy the right resources to the right market opportunities, such as a specified customer tier, territory or set of named accounts.  Yet, in their drive to meet sales quotas, some sales employees might pursue prospects, markets or opportunities that are off-strategy, assuming that any sale is a good sale and will be applied against their quota. For example, one company introduced a short-term program to reward salespeople for new sales into a specific segment but did not clearly specify the types of sales that would earn sales credit. The salesperson who achieved the most success under the program did so by approaching distributors to carry the company's products and then leveraged that channel to reach end users.

This was highly effective in the short-term, but it undermined the company's channel strategy and created subsequent channel conflict.

In this scenario, the challenge is to devise sales crediting rules that help ensure focused deployment of your salesforce to assigned accounts or portfolios.

The solution is to clearly specify up-front which assigned accounts, products, geography or buyers have been used as the basis for establishing the assigned quota or goal. Do not award credit for sales outside that portfolio, without advance approval of relevant sales leadership.

It's Worth Establishing Clarity Up-front

Who gets credit and how they get credit for the sale might be a non-issue for some companies. For other companies, establishing clearly defined sales crediting rules can help to drive the right selling behaviors and align sales roles with overall go-to-market strategy.

About the Author

Jon Randall is consulting director, West Division, Sales Effectiveness and Rewards, at Towers Watson.


Read the January edition of Sales Compensation Focus.

Contents © 2015 WorldatWork. No part of this article may be reproduced, excerpted or redistributed in any form without express written permission from WorldatWork.

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