Sales Incentives: What Do You Need—Koalas or Sharks?
More Money, More Sales. Well… maybe.
The Sales Calamity is back after a dramatic three-week hiatus! I didn’t realize anyone missed me until a few of you sent notes encouraging me to keep writing. I wasn’t planning to stop—just adjusting to my new role as Chief Revenue Officer at Brimar Industries. New gig, new rhythms, same relentless GTM obsession. But I’m back, and today, we’re diving into that magical realm where psychology, math, and delusion collide: sales incentive plans.
Commissions, commissions, commissions.
The default response to any sales issue: “Let’s raise commissions!”
Revenue will surely follow, right? Well… maybe. But also, maybe not. Sales incentives, like every other part of your go-to-market machine, are just one gear in a larger system. And when one gear is mismatched, the whole thing seizes up like a 2003 Dell laptop running Photoshop.
Your incentive plan needs to align with three things:
Your sales culture
Your objectives
Your team’s ability to adopt and understand it
And above all: make it simple. As Nobel Prize winner Richard Thaler said in Nudge: “MAKE IT EASY.” If your reps need a calculator, a Ouija board, and a prayer to figure out their commissions, they’ll ignore it. And then you’ve built a useless system.
Culture: Koalas or Sharks?
Culture is the most overlooked piece of any comp plan. Let me paint you a picture: Your frontline manager just convinced you to raise a new hire’s base salary to land the candidate. To stay within budget, you quietly reduced commissions. And just like that, without realizing it, you changed your sales culture.
Here’s a cheat sheet:
High base, low variable = Koalas. Risk-averse, reactive, sweet. They’ll answer the phone, but don’t expect them to chase.
Low base, high variable = Sharks. Proactive, hungry, aggressive. Sometimes too aggressive.
If your team is full of couch-bound koalas and you’re wondering why no one is prospecting… check the base salary. On the flip side, if your floor feels like HBO’s Industry—cutthroat, political, and exhausting—you may have accidentally created a Hunger Games economy with oversized commissions.
Be intentional. You should design comp plans to shape your culture, not let culture emerge from a thousand disconnected compensation decisions.
Should We Pool Commissions?
Hard no. In theory, pooled commissions drive collaboration. In practice, they let underperformers hide behind top reps and foster resentment. If I had a dollar for every time I heard, “I’m carrying the whole team,” I’d have… well, enough for a round of pooled commissions.
You want collaboration? Build a strong team dynamic. Hold regular reviews. Celebrate wins together. But don’t expect your comp plan to turn lone wolves into high-functioning wolves of Wall Street.
In my experience, the sweet spot lies somewhere between 50/50 and 70/30 (base/commission). Once you cross the 70/30 threshold, you’re in Koala Country. And no, they don’t sell there.
Objectives: Pay on Revenue or Profit?
The debate never ends:
Pay on revenue, and reps will discount to close.
Pay on profit, and you create alignment… if reps like math and access real-time margin data (hint: they don’t)
Again, Thaler: MAKE IT EASY.
Unless your reps have instant access to cost data and can calculate profit on the fly, paying on profit is a fantasy. You’re basically asking them to fly a plane blindfolded while you whisper, “Trust your instincts.” Instead, I recommend a commission multiplier based on discounting behavior:
Sell above list price? Get a higher multiplier.
Discount too much? Lower multiplier.
Simple. Visible. Teachable. Effective. It nudges behavior without requiring a spreadsheet wizard badge.
Product-Specific Commissions: A Well-Intended Mess
Want to pay more commission on new products? Sounds smart. Never works.
Why? Because:
The payout is fractional.
The logic is too complex.
Reps don’t notice the difference.
It turns every comp conversation into A Beautiful Mind.
Instead: use SPIFFs.
Short-term, focused, behavior-changing incentives. Roll them out with energy, structure, and a clear follow-up plan. When done right, SPIFFs work like instant-yeast for your pipeline (yes, I’ve been baking lately).
Can Commissions Be Too High?
Ah, yes. The age-old conundrum: “What if I pay my rep too much?” Well, first of all, congratulations. But also: you might be accidentally funding your local golf course economy. If commissions outpace company growth, two things happen:
Your top rep coasts the back half of the quarter.
Your struggling new rep quits before ramping up.
A good plan ensures hunger lasts longer than the quarter, and no one gets fat while the company’s still lean.
And please—don’t even mention capped commissions. Unless you’re The Office Dunder Mifflin (Saber at that point) when Jim hits his cap and checks out from work. Capped plans kill the illusion of unlimited potential, and if reached will make your sales people check-out. Keep in mind that Koalas won’t mind caps as much, but sharks will.
Temporary caps during ramp-up? Fine.
Permanent caps? You might as well issue salespeople punch cards and ration slips.
Adoption: The Most Important Thing You Forgot
The best-designed plan on Earth is worthless if your reps don’t:
Understand it
Trust it
Know where they stand at all times
Your plan must be top of mind, not buried in a SharePoint folder no one’s opened since the offsite. You need real-time dashboards, one-on-ones, and open books. I’ve seen more reps get motivated from a simple Google Sheet tracking attainment than from a glossy comp PDF emailed once a year.
TL;DR – Or, The Laws of Incentive Plans According to Sales Calamity:
Culture first. Are you hiring Koalas or Sharks? Make it intentional.
Make it simple. If it’s not easy to understand, it won’t drive behavior.
Avoid common traps:
Pooled commissions
Product-specific payouts
Capped earnings
Use SPIFFs for focus. They work.
Don’t forget adoption. A comp plan they don’t look at is just a Word doc with delusions of grandeur.
And finally: don’t let the tail wag the dog. Build your plan to reflect the culture, performance, and profitability you want—not the random collection of habits pass down through generations.