The Impact of Technology on Sales Commission: Trends and Insights

Ruby McKenzie
5 Min Read

Sales commissions are now being influenced by new technologies which have the potential to change the way that salespeople sell. The use of new technologies has helped to eliminate the need for so many salespeople and commission rates are now being kept lower to be able to afford the new technology costs. The number of salespeople who will be needed in the future as a result of new technology is unknown and could dramatically change the commission rates. The impact of technology on sales commission rates is changing the way that commissions are paid out to sales staff and this is making it more difficult for salespeople to earn as much as they used to. New software and methods of tracking the performance of all salespeople has made it much easier for companies to change their commission systems and stay competitive with their competitors.

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1. Payment Systems: 

Sales commissions have been a major form of income for salespeople but in recent years the commission structures have become more complicated as companies try to stay competitive. Salespeople once earned a fixed commission from each sale but now many new methods of payment are being introduced and these are being used by sales teams. New payment systems have been introduced which consist of split payments, bonuses and individual recognition. The split payment system splits down the total value of a sale into fixed and variable levels which is then based on the performance scores of all staff involved.

2. Individual Recognition: 

Individual recognition is one of the most effective methods of encouraging salespeople to produce and perform better because it is based entirely on individual performance. Performance recognition is the payment of a bonus to staff who have produced exceptional results and this has been used by many companies in recent years. Individual recognition is based on individual performance which results in all staff being paid the same. Individual recognition has proven to be more effective than team recognition because it motivates all of the sales staff to do their very best to ensure that they will receive a bonus.

3. Pay for Performance:

Many sales staff believe that the reason for implementing new rewards and payment systems is to increase the bottom line and ensure profits. Pay for performance can be categorised into two different types of performance which are individual and team type. The individual type of pay for performance is based on all sales staff getting paid the same regardless of how they perform and this is where most individual recognition relates to. Team type performances means that there are no differences between sales staff if they perform well but do not will be paid less overall or possibly fired.

4. Sales Commission:

The sales commission rate is the rate of commission that a company pays to the sales staff for every sale that they make. The average sales commissions are now being adjusted as the impact of technology on sales commissions is forcing companies to change their commission systems. Sales staff are now worried about how much commission they will be paid for their efforts based on new software costs and other extra expenses. Some companies have decided to cut their commission rates because they believe that this will encourage employees to work harder in order to get better results.
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