Optimizing sales commission rates is a critical aspect of running a successful business. By setting fair and incentivizing commission rates, you can motivate your sales team to achieve better results, increase revenue, and boost overall profitability. We will be exploring some of the best practices for optimizing sales commission rates by industry.


1. Know your industry standards

Before setting your sales commission rates, it’s important to understand the industry standards. This information can help you set realistic and competitive commission rates to attract and retain top sales talent. Each industry has different commission rates which is why it is important to always do your research.


2. Consider your sales team size

The size of your sales team can also impact your commission rates. A larger sales team may require lower commission rates in order to remain sustainable, while a smaller sales team may benefit from higher commission rates to compensate for the lower volume of sales.


3. Consider your target market

The target market for your products or services will also play a role in determining your commission rates. For example, selling to businesses may require a higher commission rate than selling to consumers.


4. Assess your products or services

The type of products or services you offer will also affect your commission rates. For example, high-ticket items may command higher commission rates than low-ticket items, as they require more effort and expertise to sell.


5. Evaluate your sales process

The length and complexity of your sales process will also impact your commission rates. A shorter, simpler sales process may require lower commission rates, while a longer, more complex process may require higher commission rates to compensate for the added effort and expertise required to close the sale.


6. Consider the level of risk involved

The level of risk involved in your sales process can also impact your commission rates. For example, sales of high-risk products may require higher commission rates to compensate for the added risk.


7. Evaluate your competition

It’s important to consider your competition when setting your commission rates. If your competitors are offering higher commission rates, you may need to adjust your rates to remain competitive and attract top sales talent.


“What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.” – Dave Thomas, Founder of Wendy’s


Once you’ve taken these factors into consideration, you can begin to set your sales commission rates. Here are some best practices to keep in mind:


1. Offer a base salary in addition to a commission

This can provide a safety net for your sales team and help ensure they have a stable income, even when they don’t hit their sales targets. Knowing that they have a basic income will give them the motivation they need to do even better.


2. Set clear and attainable sales goals

Your sales team will be more motivated to achieve their sales goals if they have a clear understanding of what they need to do to earn their commission. Be sure to set achievable goals that are realistic given the current market conditions.


3. Provide regular performance reviews

Regular performance reviews can help you track your sales team’s progress and ensure they’re on track to hit their sales goals. This can also provide an opportunity to adjust commission rates as needed to ensure they remain fair and motivating.


4. Offer bonuses for exceptional performance

Offering bonuses for exceptional performance can provide additional motivation for your sales team and help them stay engaged and motivated. A bonus will provide a more rewarding system for your employees to work towards.


5. Be transparent about your commission structure

It’s important to be transparent about your commission structure, so your sales team knows what they can expect to earn. Be sure to clearly communicate the commission rates and any bonuses or incentives you offer.


“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” – Steve Jobs, Chairman and CEO of Apple Inc.


In conclusion, optimizing sales commission rates is an important aspect of running a successful business. Planning out your own commission sales structure will benefit your business in the long run. Implementing software such as Commissionly will also make the process a lot smoother and easier.


“On any given Monday I am one sale closer and one idea away from being a millionaire.” – Larry D. Turner

There are many reasons to be in a commission-based career. Building your own profile and creating new relationships will help your career in the long run. At the end of the day, you are your own boss in a way as you decide how far you want to go to achieve success.

Being in a commission-based career creates more of a feeling of pride and satisfaction. This way you are able to motivate yourself to do better in order to achieve more. We will be discussing the different ways that a commission-based job will benefit you at the end of the day.

Sale is an outcome, not a goal. It’s a function of doing numerous things right, starting from the moment you target a potential prospect until you finalize the deal.” – Jill Konrath, sales strategist and author

1. High Earning Potential.

One positive aspect of being in a commission-based job is the potential for high earnings. With commission-based jobs, the amount of money you can make is directly tied to your performance, which means that the harder you work and the more successful you are, the more money you can earn. This can be a great motivator for many people and can lead to a sense of accomplishment and satisfaction in your work.


2. Flexibility.

Commission-based jobs also offer a great deal of flexibility, as you are typically not tied to a set schedule or a specific location. This means that you can work on your own terms and schedule, which can be especially beneficial for people who have other commitments or responsibilities. Additionally, commission-based jobs often allow you to work from home or remotely, which can be a great way to save time and money on commuting.


3. Room for Growth and Development.

Another positive aspect of commission-based jobs is the opportunity for professional growth and development. With commission-based jobs, you are often working with new people and learning new skills, which can help you to expand your professional network and develop your abilities. Additionally, commission-based jobs can help you to become more self-motivated and independent, which can be beneficial in both your personal and professional life.


4. Gaining Success and Knowledge

Commission-based jobs can be a great way to build a sense of ownership and pride in your work. Because you are directly responsible for your own success, you are more likely to feel invested in your work and motivated to do your best. Additionally, commission-based jobs can be a great way to learn about different industries and business models, which can help you to become more well-rounded and knowledgeable in your field.


5. Build Your Personal Brand.

Commission-based jobs are a great way to build your own brand. When you work on commission, you are the face of your own business. You are the one who is responsible for building relationships, closing deals, and representing your company. This means that your reputation is on the line, and you are building a personal brand that can be leveraged in the future. This is especially beneficial if you aspire to move up in your field or start your own business.


6. Every Day is Different.

Commission-based jobs can be very exciting and challenging, as you are constantly seeking new opportunities and pushing yourself to perform at your best. This can lead to a sense of thrill and adventure in your work, which can be highly motivating for many people. Additionally, commission-based jobs can be a great way to learn about new products and services, which can help you to stay current and informed in your field.


7. Becoming More Independent.

Commission-based jobs can offer a great deal of autonomy and independence, as you are typically working independently and making your own decisions. This can be especially beneficial for people who enjoy working independently and taking on responsibility for their own success. Additionally, commission-based jobs can be a great way to build your own business or brand, which can lead to greater opportunities and financial stability.


8. Building Relationships.

Commission-based jobs can be a great way to build your own network of contacts and resources, as you are often working with new people and building relationships in your field. This can help you to build a strong professional network that can be beneficial in your career and personal life. Additionally, commission-based jobs can be a great way to learn about new technologies and trends in your field, which can help you to stay current and competitive.


9. Expanding Knowledge in Different Fields.

Commission-based jobs can offer a great deal of variety and diversity, as you are often working on different projects and with different people. This can be a great way to learn about new industries and business models and can help you to become more well-rounded and knowledgeable in your field. Additionally, commission-based jobs can be a great way to gain experience in different areas of your field, which can be beneficial in your career and personal life.


10. Security and Stability.

Commission-based jobs can be a great way to build financial stability and security. Commission-based jobs typically pay well and offer opportunities for advancement, which can help you to build a strong financial foundation for yourself and your family. Additionally, commission-based jobs can be a great way to build your own business or brand, which can lead to greater opportunities and financial stability in the long run.


“One of the best predictors of ultimate success … isn’t natural talent or even industry expertise, but how you explain your failures and rejections.” – Daniel H. Pink, American author


Hopefully, these positive outcomes will create more of an understanding involving commission work and how it can impact your life and career. Instead of having a basic salary that never changes no matter your effort you can be awarded for your hard work and determination. A commission-based career can be challenging at times, but the benefits outweigh the odds.

Having a well-structured commission plan is one of the most important parts of commission sale success, it is one of the major issues a business leader encounters.

A sales team can be the distinction between stagnation and success. Ultimately assisting in sales acceleration and developing a reputation for rewarding and recognizing excellent staff performance. We will be going through some answers to your question “How can I achieve commission sale success?”.


  1. Establishing Reasonable Quotas, Regions, and Goals for your Sales Team.

Maintaining some strict yet achievable standards and goals can help you and your sales staff stay on track. When the company’s objectives are vague, unrealistic, or both, the allure of a respectable sales commission can seem tantalizingly and frustratingly out of reach.

Since both require calculating the customer ratio and, consequently, the number of possible prospects to be contacted, quota management and territorial setting frequently go hand in hand. Establishing these criteria is a simple task when using a solid sales management software system.

The actual procedure and achieving the ultimate goal, meeting targets and earning sales commission, becomes easier when a workforce is aware of what they are meant to be doing and why. Another way to look at this is to say that the employee has cause to protest if there is a sudden and inexplicable deviation from goals and targets.

Sales reps prefer not to spend too much time trying to understand excessively complex rules and useless text. Their concentration and progress are maintained by giving them the tools they require and facilitating the simple reading of important reports, including weekly, monthly, or quarterly leaderboards. Implementing a software system such as Commissionly is a fast way to help your staff track and understand the company’s ultimate goal.

“Never quit. It is the easiest cop-out in the world. Set a goal and don’t quit until you attain it. When you do attain it, set another goal, and don’t quit until you reach it. Never quit.” – Bear Bryant, American college football player and coach


  1. The Right Timing, Product, and People are Your Baseline to Success.

Determine your target market first. Make sure the item or product line fits a specific demand, whether the target audience is distributors or a single buyer. Apply consumer personas, consider a client’s lifestyle, and try to put yourself in their position. Establishing a relationship with your customer is highly important especially when it comes to spending time and energy attempting to convert the lead.

Figuring out your competitor’s market can also make or break you. This will determine if you are wasting your time on a certain area or customer and can give you a better idea of which way to go. This leads to the question “are you and your staff attempting to maintain a fair price?”. Being conscious of the stakes can make or break a business. Is there a chance to sell more items? Is it possible to set a price to close a deal without sacrificing profit, and how will this affect sales commission?

“A product is something made in a factory; a brand is something that is bought by the customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless.” – Stephen King, American author


  1. Empowering Your Team Without Relying Solely on Sales Commission.

Motivating your team will go a long way in reaching success. At the end of the day, the sales team is the engine of the entire business. It is not only about the money for your team but also inspiring them to take the step further to succeed and reach their full potential.

It is impossible to emphasize the significance of training and development. Making your staff better and more confident in their roles will make them better at sales and negotiating, so building in the opportunity to learn new skills during the work week or to improve on ones they already have—is more than just checking a box and not learning anything new.

Additionally, make sure your sales team has a thorough understanding of the culture and values of the organization. Understanding these and putting them to use in a role with excitement and knowledge is what transforms a routine job into fulfilling employment at an organization they’d be pleased to work for.

“Don’t find customers for your products, find products for your customers.” – Seth Godin, American author

  1. Rewarding Your Sales Team.

Another way to help motivate your team is to define a reward system for those who have overachieved standards in the company. Some forward-thinking businesses have had success getting their staff to perform better by considering their sales force as a portfolio of assets that demand various levels and types of care. An increasing number of studies show that the core performers are driven by various aspects of compensation plans.

While some salespeople are more skilled and internally driven than others, this is not universal. That is why your sales department will get a substantially higher return on its efforts if your sales compensation plans take into account the various needs of various salespeople and are founded on actual data rather than assumptions.

“Cybersecurity is growing like crazy and demand is off the charts for good salespeople. Too many startups are focused on immediate dollars, not thinking about the long game or retaining clients when it’s time to renew that subscription. Prospects can see this from a mile away. Your commission structure should, of course, reward net-new sales but balance that with client success and retention.” – Andrew Barnett, Vice President of Verodin


These are just a few ways how to become incredibly successful in your sales department. In any industry, the sales side is the support to the entire business so having a happy sales team and setting goals will help establish your company for the up-and-coming future.

Most companies don’t take their salespeople as seriously and in that way receive poor performances and low profits. Take a step further and help your team feel more grounded and special as they will return the respect they are given.

Commission management is a critical component in an organization and relying on spreadsheets to handle it may become overwhelming. Without a thorough plan, most companies battle with poor performance which results in the inability to achieve their goals. Motivating and making it worthwhile for your sales representative will enhance the company’s gain.

Unfortunately, many companies make sales compensation faults and avoid putting best practices in place throughout the planning stage. These issues may not be obvious but will impact the company’s performance in the long run. To help your company avoid any mishaps here are 5 commission management mistakes with ways to recognize and avoid them.


  1. Low Variable Pay Proportion.

The commission is what drives sales and the whole point behind commission is to help motivate your staff to close significant deals. The take-home pay of the sales representatives will affect their overall performance. A low proportion of variable pay will not drive and inspire your salespeople the way you would want.

Without a good enough commission pay out, there will be nothing pushing your sales representatives to go a step further. To enhance overall performance levels, it is highly suggested to plan out a worthwhile percentage for your sales representatives to take home.

“The key to realizing a dream is to focus not on success but on significance — and then even the small steps and little victories along your path will take on greater meaning.” – Oprah Winfrey


  1. Mismatching Your Company’s Goals.

Sometimes even when your salespeople are meeting their targets it may result in a well-paid team that won’t meet the company’s goals. Issues may arise when the seller’s targets don’t meet the company’s priorities. A compensation plan that drives not just your salespeople but also your company forward will be more effective.

To create an effective plan, you will need to consider targets that will help the marketing and sales roles in the company. The commission is far more than closing deals and compensating sellers.

Developing an enabling environment will drive the business to fulfil both immediate and long-term growth objectives. It is important to keep your salespeople happy with their pay but not in a way that will result in the entire business suffering from a mismatch of company goals and sales initiatives.

“I had to make my own living and my own opportunity. But I made it! Don’t sit down and wait for the opportunities to come. Get up and make them.” – Madam C.J. Walker


  1. Not Implementing a Multiplier Style Compensation.

Having a commission rate that doesn’t change or multiply based on the sales representatives’ efforts will result in low performance. Having a commission rate that doesn’t meet their efforts shows the lack of growth for the person at hand.

Implementing a multiplier compensation style will help drive your sales representatives’ performances. The way to implement this style is to consider increasing their commission rate based on the deals they close. This helps motivate the sales representatives to sell above quota.

If the quota is impacting the company in a good way, then showing your appreciation will drive your sales team to do even better in the future. This will help avoid any issues arising from your staff and keep an overall happy team.

“The most difficult thing is the decision to act, the rest is merely tenacity. The fears are paper tigers. You can do anything you decided to do. You can act to change and control your life; and the procedure, the process, is its own reward.” – Amelia Earhart


  1. Not Adjusting Your Sales Commission Plan When Your Business Grows.

Building a commission plan can be challenging but keeping up with the pace of the market will help your business. Keeping up to date with the market will help make your sales representatives feel more valued. Also allowing your sales team to give feedback will help create a more effective commission plan.

Before going headfirst into a new plan, it is best for certain salespeople to understand the market price. One of the most basic steps to take when creating this plan is to include basic elements such as amendment, eligibility, philosophy, and payments.

Once gathering your new research and critical feedback it is best to start putting your new plan together by balancing the stakeholder and employee needs. Give yourself time to create the perfect plan that matches your business’s current level. Be sure to think through each decision before committing to it.

“For my part, I will never give up, and I mean never.” – Elon Musk


  1. Not Implementing a System like Commissionly.

When facing many common issues in your business it’s best to have software where you can access everything in one area. Implementing software will not only make your life easier but will help your sales representatives track their progress. This type of software will help find a solution that will evolve with the company.

Commissionly will also help you track unpaid commissions which will help the company avoid any uncertainty within the sales team. It provides many other features that can simplify most of the issues at hand. Taking away spreadsheets that can become a mix-up and implanting a simple system will benefit your overall business.

To avoid any problems in the future, implement a system, keep your sales team happy and your company’s overall performance levels at a high with Commissionly.

“Quality performance starts with a positive attitude.” – Jeffrey Gitomer


These are a few commission management mistakes you may face in your business. Implementing the given solutions will help create a better environment within not only your sales team but the entirety of the organization. Finding a system that will take away most of your management problems will result in less stress and happier employees.

Modern day Medicare Field Marketing Organizations (Medicare FMOs) often walk a tightrope – working hard to simultaneously keep their carriers and agents happy. In order to stay competitive, its essential that every opportunity for modernization is embraced – digital transformation, and specifically, digital distribution, have an important role to play here.

In this article, we’ll explore the contribution and opportunity of digital distribution as a competitive advantage for Medicare FMOs.


What Is Meant By Digital Distribution in Insurance?

Digital distribution is the process of assets being digitally transferred – usually via the internet. In the context of the Medicare industry, digital distribution is having a transformative effect, diversifying the way in which plans are being sold and serviced. This is marked by a move away from traditional physical channels, towards more user-friendly and efficient digital ones.

Digital distribution represents a fairly radical shift within the insurance industry, as traditionally, the sector has been slow to adopt and adapt to new digital methods and channels. With the impact of the Covid-19 pandemic forcing incumbents to catch up with other industries, today, many more are embracing the opportunities and advantages that digital distribution offers.

For many, the move to digital distribution is a necessary one. Clients and prospects will no longer tolerate lengthy waiting periods, delays in paperwork or being kept on hold. Expectations, forged during interaction with other more progressive industries, have evolved. As a result, FMOs should embrace the shift towards digital distribution for the opportunities that it holds.


What Are The Core Advantages Of Digital Distribution For Medicare FMOs?

Digital distribution holds a number of exciting opportunities for Medicare FMOs in the modern insurance industry. The main opportunities include:


Being able to meet evolving customer experience expectations.
Digital distribution has influenced customer expectations – expedited workflows, instant support messaging and digital signing are all tools your agents should have access to.

A more personalized offering and service.
Through the collection and application of data, coupled with the ability to distribute assets digitally, it is much easier to customize and tailor-make Medicare offers to specific needs of clients.

Sharper messaging.
As an extension to the data opportunities available through digital channels, digital distribution also allows for greater segmentation and therefore increased ability to personalize communications according to behavioral insights gathered.

Slicker point-of-sale experience.
The ability to design e-proposals, e-renewals and e-submissions means that Medicare FMOs have the ability to create sleek experiences that elevate their brands through refined visual identities.

Increased opportunities for upsell and cross sell.
Artificial Intelligence incorporated into digital distribution platforms enables ‘next-best’ action recommendations for agents, thereby giving them greater capability to upsell and cross sell products and product combinations.

Reduced turnaround time via streamlined processing.
Digital processes allow for the removal of inefficiencies in the system and result in reduced turnaround times and streamlined processes.


What Are The Potential Pitfalls Within Digital Distribution For Insurance FMOs?

While digital distribution and its adoption into business processes hold a number of advantages and opportunities for Medicare FMOs, it is also important to understand that there are potential issues to mitigate.


The main pitfalls to look out for include:

Poor adoption and underutilization.
Implementation is vital to the adoption and utilization of any digital platform. If this phase is not carefully considered, it may result in poor adoption by agents and an asset that underperforms.

Increased training burden.
Creating understanding as to how your new platform works is vital to adoption. There will be a greater training burden associated with getting up and running, but put measures in place to ensure this can be maintained effectively over time.

Agent resistance.
Some more traditionally leaning agents may resist the adoption of digital technology. Go into the change expecting this and approach the matter pragmatically.

Attrition of agents.
As some resistance to change is inevitable, there may be some attrition of agents from the FMO as a direct result. This is usually associated with a lack of experience and confidence in digital technologies, and can be mitigated through empathetic implementation practices.


5 Best Practice Tips For FMOs Looking To Embrace Digital Distribution

1. Focus on the experience.
Ensure that the customer-facing experience is designed from every angle. Build strategies and define what each claim or renewal experience will look and feel like. The ability to control the experience is in your hands, so be sure to maximize it to its full potential.

2. Make use of data.
Digital distribution unlocks so much potential in terms of accessing detailed behavioral information at scale, and this data is the key to unleashing new levels of service and satisfaction for your organization.

3. Don’t underestimate the importance of adoption.
Be careful not to assume that all your agents will take to the platform instantly. Design a strategy that will help you ensure the very best adoption and success rates.

4. Listen to your agents.
Your agents are your eyes and ears in the marketplace. They will come to understand the opportunities and short falls of this sales method better than anyone else, and are therefore the key to optimizing the platform to become the best possible version. Be sure to listen to their feedback, both positive and negative.

5. Remain mindful of compliance.
Compliance is an essential aspect to quality insurance services in the market. Be sure to work with a platform that places compliance at the heart of its value proposition.


Digital Distribution – Your Pathway To Increased Medicare Sales?

For Medicare FMOS, digital distribution is an essential component of staying relevant and competitive in the ever-evolving world of Medicare sales. The question is no longer should you make the shift, but rather how quickly can you move to secure the long-term future of the organization?

Digital distribution should form part of a wider digital transformation strategy – embracing the opportunity that automation represents for ROI and improved operational efficiency. Commissionly offers a dedicated and intelligent solution for streaming lining Medicare commission payments, removing the admin associated with ensuring payments are accurate and on time.

By building out a modern, digitally transformed operation, you’ll be able to attract the right type of agent – keen to work with a digital-first, progressive FMO which invests in their ability to make more sales.