Should appointment setters get a bonus on deals closed?

Dear Scott: We are establishing a small in-house team to set up meetings. Besides the base pay was thinking of giving our B2B appointment setters a bonus based on deals that close. What do you think?

Bonus Boy

Dear BB: Bottom line, I don’t recommend basing appointment setter compensation on deals that close. There are three reasons I don’t like this idea.

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Appointment setter compensation must encourage behavior change

1. incentives based upon deals closed is too far away and not related to what they do, to encourage the caller to maximize productivity right now.

As an owner or manager, your goal is to generate leads of a certain caliber at the most reasonable cost per appointment. Your key number is cost per opportunity.

Your incentive system should encourage callers to manage their behaviors for best productivity. You would much rather have your caller book 10 meetings a week rather than 7 meetings rather than 4 meetings a week.

Your incentive system should be the carrot always dangling in front of the caller.

As they book 3, 4 and 5 discovery calls, you want them thinking “Hey, if I book one more I get X more in my next paycheck, if I bear down and get three more I get xx in my next check. I’m focused.”

Your comp system should encourage your callers to do the things necessary to increase their weekly productivity.

Your appointment setters should constantly be thinking “Hey, if I am more careful about who I call, stay true to my scripts, do a better job at overcoming objections, screen out the timewasters better, yada yada yada, I can book an average of 8 meetings a week, rather than go through the motions and book four a week.”

Focusing on their calls and what they do and seeing the results of better behaviors hit their next paycheck keeps them focused on what they can control.

As your callers book more meetings per week on average, they should make more money, but also your cost per meeting should be going down. You win twice when average productivity goes up with your callers. More meetings in the pipeline. Lower cost per meeting.

Best commission structure for appointment setters encourages better behaviors

2. The second reason I don’t like basing incentive pay on deals closed. That pay is based upon someone else doing their job well.

Cold calling and appointment setting are tough jobs. Repetition. Constant rejection. Boring snacks. If a caller is doing a great job and booking meetings only to see them not closed or mishandled, their motivation to do a good job and make the extra effort plummets.

Why would they push push push to get more when their bonus pay is in the hands of someone else?

Many times, they feel that the sales team is not closing deals that should close and costing them money. Morale plummets. That money is too far away and beyond their control. It has very little positive impact on their outreach behaviors day to day.

It often has a major negative impact on their enthusiasm and willingness to dig in.

3. Sales managers: Does incentive compensation on deal closed help or hurt?

Appointments set that meet certain criteria have a certain value. It is the appointment setters’ job to create those meetings and they should be paid based upon how well they do that.

It is the salesperson’s job to take meetings that meet certain criteria and convert them to paying accounts. They are paid on how well they do that.

Managers should know the value of each sales step and pay accordingly.

If you focus on appointment setting as a distinct step and manage well, including compensation, you will max out on the meetings set.

As sales managers, there are opportune moments to take the easy route and moments where it is ill-advised. This is one time the easy button is not the best button.

When it comes to lead generation, you gain more when you manage the behaviors that lead to the closes, rather than the closes itself. That takes more time and more concerted effort, but pays big dividends to the organization.

If the money was mine, I would not use closed deals as a basis for incentive pay. It is a motivation killer and does not encourage focus and skill building.

I would encourage you to think of a system where they get an expanding bonus as the number of meetings set per week increases. Base plus X for 3, 2x for 5, 3x for 7. Something like that.

IMHO, the best compensation structure for appointment setters increases the money appointment setters earn, while the cost per meeting goes down. Win, win. BOOM!

If the team exceeds expectations, you can always give an additional bonus to the players you feel deserve it.

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