Ron,

I can only talk in generalities as the specifics of our compensation plan
are confidential:

1) We have separate commission structures for product versus service
revenues. For the record, service revenue commissions are higher
2) We have gone back and forth on how much to compensate for sales versus
revenue. Currently, compensation is completely tied to revenue, which
upsets the BDM organization as they own the process through closing, but
don’t control the revenue. I have had models with 50/50 splits of
commissions for sales/revenue, which has its challenges, but is better
liked by the BDMs.
3) We have tiered commissions based on thresholds. I’ve had mixed success
with this and have actually reversed the model to incent early sales and
sales during slow periods.
4) There’s a ‘kicker’ for margins. I’ve done many iterations, including
floors, bonuses for exceeding levels, and multiple complex scenarios. What
I have found is the market drives price and these margins rarely have a
major impact, other than to penalize individuals who don’t meet the
minimum.

Hope this helps.

Joe G.

You might want to check out Charles Green’s Book (circa 2000) on the “The Trusted Advisor”. He goes through selling models for professional services and also touches on comp models.
Best,

Chris