Sales Compensation Glossary

The A-Z guide for Finance, RevOps, and Sales teams to debunk sales commission terminologies.

Couldn’t find a term you’re looking for?
Add your query by filling out the form below and we promise we’ll get back to you. :)
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Sales Compensation Terms & Definitions

Use this collection of commonly used terminologies and definitions to learn more about sales commissions.

Clear All
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Sales Compensation
The amount provided to sales professionals (e.g. sales reps, sales management, and sales support) in exchange for sales outcomes. Includes creating strategies, administering compensation, and reporting to management.
s
Sales Compensation Plans
Plans for sales compensation contain the specifics and components of a salesperson's pay for performance, which are often comprised of a basic salary, commission, and extra benefits, incentives, or bonuses.
s
Sales Force Automation (SFA)
Sales Force Automation refers to the automation of sales and sales operations-related duties.
s
Sales KPIs
Sales KPIs (Key Performance Indicators) are metrics used by businesses to measure the performance of their sales team and the success of their sales efforts. Examples of common sales KPIs include sales revenue, sales growth rate, win rate, average deal size, customer acquisition cost, and customer lifetime value. By tracking and analyzing these KPIs, businesses can gain insights into their sales performance and make data-driven decisions to improve their sales processes and drive revenue growth.
s
Sales Performance Incentive Fund (SPIF)
SPIF stands for Sales Performance Incentive Fund, which is a short-term incentive that sales managers use to motivate sales representatives to achieve specific behaviors or goals.
s
Sales Performance Management (SPM)
Sales Performance Management (SPM) is focused on maintaining the performance of a sales organization. It involves planning, administering, analyzing, and improving sales performance by integrating sales objectives with overall organizational objectives. Key components of SPM include designing sales plans, managing quotas and territories, communicating and accepting plans, administering and reporting compensation, managing incentives, resolving disputes, providing coaching, and using analytics to improve sales performance.
s
Sales Quota
Quotas are sales targets that salespeople must surpass during a specified period to qualify for variable compensation.
s
Sales Target
Sales Goals are objectives for sales departments, teams, and individuals. Objectives and Quotas are equivalent terms. Generally, "Target" is employed in APAC and EMEA, whereas "Quotas" is utilized in the US. Often, targets and quotas are created for a specified period (aka period).
s
Sales goals
Sales goals are specified objectives for a salesperson or a sales team. Examples of common sales objectives include raising revenue, increasing client retention by a particular percentage, streamlining sales procedures, growing the number of customers, boosting sales personnel's productivity, and eliminating time waste.
s
Sales organization
The sales organization is responsible for selling a company's products and services, and its main goal is to distribute and sell to the customer. It also recruits and trains employees, conducts market research, manages budgets, and develops policies for channels of distribution, pricing, and other sales-related topics.
s
Sales representatives
Sales Representatives work directly for the company and serve as the company's liaison with customers. Typically, they possess exceptional communication, public speaking, and negotiation abilities, which enable them to comprehend what the consumer wants, create trust with the client, and demonstrate topic mastery. They must ensure that all clients receive the products and services they requested, as well as pitch future clients.
s
Sales team
A sales team is a group of employees tasked with selling the company's products, subscriptions, and services to customers. It has a significant impact on brand image, customer retention, developing long-term consumer connections, etc., in addition to generating revenue.
s
Service Level Agreement (SLA)
Service Level Agreements from software suppliers are assurances, like an SLA for a Service with high availability; a 99.99% uptime.
s
Spiff
In sales, a Spiff is a special incentive or bonus offered to salespeople to motivate them to sell more of a particular product or service. It is typically a temporary bonus offered until a certain sales goal is met or for a limited time period. Spiffs can be effective in boosting sales, but it's important to design the incentive program carefully and track its results to ensure it aligns with the company's goals and values.
s
Split
The number of incentive payments and associated costs that are divided among two or more employees.
s
Sorry, we couldn't find what you're looking for.
Couldn’t find a term you’re looking for?
Add your query by filling out the form below and we promise we’ll get back to you. :)
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.