This quick reference explores a strategic approach to designing commissions that incentivize business developers to continuously win new contracts. Traditional commission structures often inadvertently discourage ongoing business development by providing equal compensation across the years of multi-year contracts. This approach creates a disincentive for business developers to actively pursue new business opportunities.
RSM Federal’s recommended commission strategy addresses this challenge by implementing a dynamic compensation model that rewards new contract acquisition. By structuring commissions with decreasing rates for existing contracts and higher rates for new contracts, companies can motivate their sales teams to remain proactive in business development.
This method transforms commissions from a passive reward into an active tool for driving business growth. The strategy encourages sales representatives to consistently seek new opportunities, preventing revenue stagnation and maintaining organizational momentum. Ultimately, the approach aligns individual financial incentives with broader business development goals, creating a more dynamic and competitive sales environment. Search the RSM Federal Vault with keyword ‘commission’ for comprehensive examples of compensation strategies and watch the Deep Dive Video on Hiring Business Developers for a virtual walk-through.
