5 Commission Alternatives for Customer Success

By Kristen Hayer

A few weeks ago I wrote a post about variable compensation plans for customer success teams.  Since then, several people have asked me about alternatives to commission or bonus plans.  Some of them don’t work for companies that are supportive of variable comp in general, and others just didn’t budget for it this year.  So, how do you encourage the behavior you want from your team without an incentive plan?  Here are 5 alternatives to a classic variable compensation plan:

SPIFs – This acronym stands for Sales Performance Incentive Fund and was originally used by managers to boost sales (think used car lot).  Despite it’s slightly seedy origin, the SPIF can be a great choice for customer success teams.  The time to use a SPIF is when you are trying to drive short-term behavior (like CSMs encouraging clients to adopt a new product, or Support Reps getting through tickets quickly during your busiest month).  If your SPIF is tied to concrete goals and impacts revenue it should be easy to get this approved by your finance team.

Contests – Contests can be used to drive short-term behavior (like a SPIF) but are also great for keeping your team focused while still having fun during the summer or holiday season.  You can also tie contests to either team or individual goals, so they are a very flexible choice. Contests are one of my favorite alternatives to traditional comp plans so I could go into a lot of detail here, but my colleague Natalie Macks wrote a great blog post about how to plan and implement contests so I’ll let her fill you in on the details. 

Events – The type of people who make great CSMs tend to be very social and want to succeed together as a group.  Planning a team event as a reward for hitting a big goal can be very motivating.  Event incentives work best for longer-term, team goals (like keeping churn low for a quarter, or improving customer feedback scores over the year).  However, they won’t work at all if you don’t provide your team with fun details on the event itself, so be sure to plan something really creative and promote it like crazy.

Time Off – You have to be a little careful with this one, so talk to your HR team (or maybe don’t - I'll leave that up to you!)  Millennials, especially, value flexibility and free time more than money.  You do need to be really thoughtful about how you implement this, or it can start to become an entitlement rather than a reward.  Tie time off incentives to concrete, individual goals, and have a clear start and end point for the program.  If you’re worried about time off taking time away from hitting goals, consider half-day rewards instead.

Side Projects – At VerticalResponse our support team came up with a program called Project Odyssey.  Support reps who hit their goals for the quarter would have the opportunity to intern each Friday afternoon with another department in the company, working on projects that helped them build their skills and learn about various career paths.  Side projects can serve as a refreshing break from the day-to-day of work, and allow team members to grow.  They work best as a long-term reward for hitting long-term, individual goals.

Critical to making any of these alternatives work are thorough planning and clear communication.  Incentive programs don’t work if people don’t understand what they are working toward or how to achieve it.  Think through the behavior you’re trying to drive, program details, and potential side effects.  Write up your plan and have several people on your team proof it.  Roll out your program at the same time you roll out your goals, and continue to promote it throughout the goal period.  Your team will appreciate the time you took to plan a great incentive program, and you’ll see your motivated team pushing toward their goals.

Need help building a variable compensation program for your customer success managers?  The Success League is a consulting firm that works with executives who are ready to build and develop a top performing customer success team.   www.TheSuccessLeague.io