Decelerator

Decelerators vs. Accelerators

While sales accelerators reward high-performing salespeople by increasing a rep’s base commission rate as they exceed their sales targets, decelerators work in the opposite way. Companies use deceleration policies to decrease commission rates when salespeople fail to meet their targets or underperform. In other words, accelerators motivate salespeople to achieve more and decelerators act as a penalty for not meeting goals.

The decision to use decelerators or accelerators depends on the company’s sales goals and priorities. If the company wants to discourage certain outcomes, decelerators may be more appropriate. Conversely, if the goal is to encourage behaviors or reward high performance, accelerators may be the better choice. It’s important to consider desired behaviors and outcomes before deciding to use decelerators, accelerators, or a combination of both.

In some cases, companies may use a combination of decelerators and accelerators to strike a balance between encouraging desired behaviors and discouraging undesired ones. For example, a company may use an accelerator to reward salespeople who meet or exceed revenue targets but also incorporate a decelerator to reduce commission rates for salespeople who excessively discount prices to close deals. This approach can help create a compensation plan that motivates salespeople to achieve results while also aligning with the company’s strategic objectives.

Common Types of Sales Decelerators

Sales teams use decelerators in a variety of ways. Like most sales strategies, how you leverage decelerators will depend on your goals, your industry, and your team. Let’s take a look at some of the more common scenarios in which a company may incorporate a decelerator into their comp plans:

Prioritize (or deprioritize) specific products or add-ons

For companies that offer a range of products or solutions, it often makes sense to use accelerators or decelerators to encourage sales across the entire product portfolio.

For example, Company ABC sells one primary SaaS platform that has multiple paid add-ons (i.e. integrations, services, features). The commission plan at Company ABC rewards reps with an accelerator after reaching quota attainment– meaning, they receive a larger percentage of variable pay for any deals they close past a certain threshold.

This setup, however, has an unintended consequence: Reps now see add-ons as time-consuming pitches that have minimal impact on their wallets or their sales quotas. As a result, they’ve stopped trying to sell add-ons and move on to new deals quickly in order to hit that accelerator faster.

To correct this behavior, Company ABC adds a decelerator to the team’s comp plan that requires reps to sell a certain number of add-ons each quarter– reps who don’t hit this goal receive a smaller percentage of variable compensation during the next pay period. This encourages reps to sell the full range of products and discourages them from trying to game the system to hit their accelerator faster.

Avoid capping your compensation plans

Nothing lowers morale and kills motivation like a capped commission plan– even if your reps never reach that threshold. But, even though most companies understand the risks of commission caps, they’re sometimes a necessary evil due to budget constraints, market conditions, or other factors outside the company’s control. The good news is, you can use decelerators in a similar way, without having to place traditional caps on your plans.

Here’s an example: Company XYZ uses the same commission rate across all teams and deal sizes. The issue they regularly run into is that they struggle to keep reps motivated after they reach quota each quarter. They consider adding an accelerator to their comp plan that bumps up the commission rate for all deals closed after quota attainment. But, after crunching the numbers, the leadership team worries that this accelerator might work a little too well– causing them to spend more than they budgeted for sales comp.

Although one could argue this is the appropriate scenario to implement a commission cap, Company XYZ knows capping earnings can be hard on a sales team. Instead, they add both an accelerator and a decelerator. The end result looks something like this:

• 10% commission rate up to quota attainment
• 15% commission rate on deals closed between 100% to 150% of quota attainment
• 12% commission rate for deals closed after 150% of quota attainment (flag to RevOps team and sales leadership to reevaluate quota setting process)

The thought process here is this: The company wants to have controls in place to prevent overspending on sales commission but doesn’t want to cap commission completely to keep their sales teams encouraged and engaged. They set the threshold for the decelerator knowing that if they set quotas correctly, the decelerator would impact very few sales reps. Should a rep hit that threshold, the leadership team would then use that as a signal to reevaluate quotas.

Penalize underperformance

The third and most common way companies use sales decelerators is to penalize underperforming sales reps. Typically companies tie this type of decelerator to quota attainment in the same way an accelerator might be. For example, Company EFG has a significant number of reps who aren’t meeting quota. Although they’ve implemented an accelerator to encourage overperformance, it did little to incentivize the reps that weren’t achieving quota attainment.

For this reason, Company EFG also implemented a decelerator. Here’s how it works:

• Sales reps earn 10% on each deal they successfully win at the end of each pay period.
• Once a rep achieves quota attainment, they earn 12% on each deal they successfully win at the end of each pay period.
• However, if a rep ends the pay period at 60% of quota or lower, the decelerator kicks in and they earn just 7% of each deal instead of the 10% they’d be paid if they were closer to quota attainment.

In this example, the decelerator almost acts like a tiered commission structure but discourages underperformance rather than encouraging overperformance.

Best Practices for Using Commission Decelerators in Your Comp Plans

It’s important to use decelerators strategically to avoid confusion and discontent in your sales organization. Here are a few best practices we recommend:

• Clear communication: It is essential to clearly define the criteria that will trigger the decelerator. This ensures transparency and helps to avoid any confusion or disputes. Sales representatives should be aware of the specific conditions that may result in a deceleration of their commission earnings.
• Align decelerators with sales performance goals: Decelerators should align with the overall performance goals of the company. They should discourage behaviors that are not in line with the company’s objectives or values. By linking decelerators to specific performance metrics, companies encourage sales reps to focus on the desired outcomes.
• Provide regular feedback and coaching: Regular feedback and coaching sessions are crucial when using decelerators. Sales managers should provide constructive feedback to help reps improve their performance and avoid triggering decelerators. This helps create a supportive environment and encourages continuous growth and development.
• Balance out decelerators with positive incentives: Decelerators often highlight negatives and punish underperformance. In order to avoid creating a negative, high-pressure environment it’s important to also reward high-performing reps and incentivize positive behavior. By also offering positive reinforcement, sales reps will be less likely to let decelerators discourage them or create discontentment throughout your sales team.
• Review and adjust decelerators periodically: It is important to review and assess the effectiveness of decelerators regularly. This allows the organization to make adjustments and refinements based on the changing needs and dynamics of the sales team and the organization as a whole. By continuously evaluating the impact of decelerators, companies can ensure they are achieving their desired outcomes.