Talk to an Expert

Quick wins

Sales compensation and the deal desk

5 min on the light depth

The frame

Two documents set your prices. The first is the pricebook, the schedule of list prices for everything you sell. The second is the sales compensation plan. A rep paid on bookings earns the same commission on a discounted dollar as on a dollar closed at the scheduled net price, the price the pricebook intends for that commitment. The concession costs the rep little and costs the company the margin on the line. Pay the same rep on gross profit, revenue less the cost of delivering it, and the concession comes out of their own number. What the rep defends changes with it.

This is the second quick win, and it needs no change to licensing, packaging or the price list. It reads from the same closed-deal record as the first: the gap between list price and realized price, what a customer pays per unit after every discount. Two cautions come with it. Compensation is a lever and never the fix. Reps cover gaps in the architecture with price, so a discount pattern is usually a packaging or licensing symptom. And the deal desk, where a deal that does not fit the pricebook is decided, has to write down what it decided, or the pricebook stops being the record.

The compensation piece argues that a revenue plan cannot see the gap between scheduled and realized price. The deal desk piece argues that the desk exists for the true exception, each one a reading on which of the three decisions is under strain. The value-based selling piece argues that a rep can hold a price on what the software does for the customer only when packaging and the pricing model give them something to hold.

What does your compensation plan pay a rep to defend, and where is the deal that broke from the pricebook decided and written down?

Three things to say in the room this week

  • Our compensation plan sets prices too: a rep paid on bookings is paid to discount.
  • Before we blame the sales team for discounting, show me which packaging or licensing gap each discount was covering.
  • Every exception is decided in one place and written down, so the pricebook stays the record of what we intended.

Core reading

Go deeper: the heavy depth

Read the core in this order.

  • Compensating sales on gross profit: the starting frame. A revenue plan pays the same on a discounted dollar as on one closed at schedule; a gross-profit plan prices the rep’s own concession, once a scheduled net price exists to measure against. Architecture first, then the pricing surface, then the plan.
  • Deal desk software for B2B software: the desk is where a deal that does not fit the pricebook is decided. What reaches it is a reading on which decision is under strain, and how much reaches it says how badly.
  • How software pricing facilitates value-based selling: the conditions for selling on value are set before the first call, in simple packaging, a programmatic pricing model and earned incentives every buyer can see.

Then the shelf.

  • Combating the nibble: the small ask after the deal is agreed. As a pattern across the sales team it is a pricing signal, and the fix is upstream of the negotiation.
  • Why most value-based pricing and selling in B2B software is a hoax: a rep cannot sell on value from list prices nobody believes.
  • One pricebook, two motions: self-serve and direct sales may differ on commitment, term and service wrap, and never on the unit counted or what an edition means.
  • Pricing exceptions: a deal priced off the surface by discretion moves several parameters at once, so the row survives and the observation does not.

Glossary page to open: pricebook. Two research hubs hold the peer-reviewed work on how organizations buy. They cover buying committees, procurement and negotiation, and incentive contracting in enterprise software, each study read with a written ceiling on what it supports.

Stage 4, staged change, begins the moves that do touch licensing and packaging: the gaps the discount pattern pointed at.

The shelf

Terms

Which depth did you take?