Today I want to talk to you about the pros and cons of the sales incentive or success fee tool , how it relates to pay and how to use it effectively. Most people reduce the concept to “you sell and I’ll give you a commission” , but in reality there is much more.

Even if this statement is not wrong, it is important to delve into what is behind it to take advantage of all the advantages that the success fee can bring to your business. In the following paragraphs I will explain to you what the success fee is , why you should include it in your commercial strategy and some applications and case studies of the use of this tool

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Success fee: what is it?

The meaning of success fee ? In the financial sector this term is used to indicate a percentage of sales, i.e. a commission paid to the seller for each completed transaction.

We speak, therefore, of sales incentive , a form that encourages sellers to do more than what is needed to be productive without some criteria established by the employer.

Incentives to sell can take many forms, from a bonus added on top of a standard commission to one-time cash bonuses or any other benefit that recognizes the salesperson’s skill and contribution to the company’s success.

The main purpose of the success fee is to motivate the sales force , encourage the team to put more effort to ensure constant revenue growth.

Through an additional fee, competition is also encouraged among the members of the sales team, encouraging them to do better, by developing new commercial strategies compared to those commonly used to obtain the required results.

In short, the success fee is the tool that all entrepreneurs and managers dream of using as effectively as possible. What benefits can you get from its application?

The success fee allows you to:

Directly delegate part of the commercial responsibility to the sales department and to the sellers.

Simultaneously reduce the fixed costs and risks of the negotiations, while keeping the motivation of the salesmen high.

Increase sales and turnover

To be used effectively, however, it needs precautions that take into account the context, the company strategy and the commercial one.