Glossary
Commission frequency
Number of commissions earned from one sale.
Frequency is the total number of times sales reps can earn commission from one sale. This is largely determined by your company's revenue model: if customers pay once each time they purchase something, then pay reps a one-time commission. If customers make recurring payments (e.g. SaaS) then you need to choose between capped and uncapped compensation.
If customers pay monthly recurring fees for your product, rather than paying capped or uncapped recurring commissions to the sales rep, you can use the annual contract value (ACV) to calculate a one-time commission to the rep. For example, rather than paying a monthly 10% commission of $10 in perpetuity on a $100/month product, pay a one-time commission on the $1,200 ACV equal to $120.
If customers pay monthly recurring fees for your product, rather than paying capped or uncapped recurring commissions to the sales rep, you can use the annual contract value (ACV) to calculate a one-time commission to the rep. For example, rather than paying a monthly 10% commission of $10 in perpetuity on a $100/month product, pay a one-time commission on the $1,200 ACV equal to $120.