You get what you pay for, literally
Commission structures are not just compensation plans. They are behaviour design tools. Whatever you incentivise, agents will optimise for. If you pay the same commission on every deal regardless of size, agents will close easy small deals. If you reward volume over quality, you will get high churn customers.
Design your commission structure to drive the specific outcomes your business needs.
Common structures and what they drive
Flat percentage
A simple percentage of every sale, regardless of size or type. This is the easiest to understand and administer. Agents sell whatever is easiest to close.
Best for businesses with a single product and relatively uniform deal sizes.
Tiered percentages
Higher commission rates at higher revenue thresholds. For example, 10% on the first $20,000 per month and 15% on everything above that. This drives volume and rewards top performers disproportionately.
Best for businesses that benefit from volume and want to retain high performing agents.
Variable rates by product
Different commission rates for different products or services. This lets you steer agents toward products with higher margins, strategic importance, or lower market penetration.
Best for businesses with multiple products that want to control the sales mix.
Recurring commissions
Agents earn a percentage of ongoing revenue, not just the initial sale. This creates long term alignment. Agents have an incentive to bring in customers who stay, leading to better qualification and expectation setting during the sale.
Best for subscription or recurring revenue businesses.
Bonus accelerators
Additional bonuses for hitting quarterly or annual targets. These create urgency and sustained effort throughout the period.
Best for businesses that need consistent performance rather than sporadic bursts.
Matching structure to strategy
If you want larger deals
Set a minimum deal size below which no commission is paid, or use a tiered structure where the commission rate increases with deal size. Agents will naturally focus on larger opportunities.
If you want customer quality
Tie a portion of commission to retention milestones. Pay 70% at the point of sale and 30% after the customer has been active for 90 days. This incentivises proper qualification.
If you want new market penetration
Offer enhanced commission rates for sales in new territories or to new customer segments. This compensates agents for the extra effort of breaking into unfamiliar markets.
If you want fast growth
Use aggressive tiered structures with uncapped earnings. Remove commission ceilings so top performers have no reason to slow down.
Keep it simple enough to calculate
No matter how clever your structure, if an agent cannot calculate their expected earnings in their head, the incentive effect is diminished. Aim for a structure that can be explained in two minutes and calculated on a napkin.
On Zepys, commission structures are transparent and automatically calculated, so agents always know exactly what they are earning.