How to Create an Effective Incentive Plan for a Sales Team in a Mid-Sized IT Company?

I need help to frame an incentive structure for our sales team. Please share inputs on:

- What should be covered in the incentive plan/policy?
- What percentage of incentive should be given to salespersons in the IT industry for different targets, considering the incentive is paid on revenue and not profits?
- Should the incentive percentage be different for repeat business and new business?

To design an effective incentive plan for your sales team in the IT industry, consider the following key points:

- Incentive Plan Coverage:
- Clearly outline the objectives and targets that will qualify for incentives.
- Define the eligibility criteria for sales team members to participate in the incentive plan.
- Specify the frequency of incentive payouts and the mode of calculation.

- Incentive Percentage:
- Determine a base percentage for achieving standard targets based on revenue generation.
- Consider offering higher percentages for surpassing set targets to motivate salespersons further.
- Regularly review and adjust the percentage based on market trends and business goals.

- Differentiating Incentives:
- It is advisable to have different incentive percentages for repeat business and new business.
- Higher incentives for new business can encourage salespersons to focus on expanding the customer base.
- Repeat business incentives can help in fostering long-term client relationships and ensuring customer retention.

Remember to align the incentive plan with the company's overall goals and ensure transparency in communicating the plan to the sales team. Regularly evaluate the effectiveness of the incentive structure and make necessary adjustments to drive desired sales outcomes.