Choosing the right reporting hierarchy isn’t just about structure – it’s about driving performance and aligning sales efforts with strategic goals. The right hierarchy can supercharge your sales compensation plan, fostering motivation and boosting results. Here’s how to determine the best fit for your organization:
Standard Reporting Hierarchy (Functional/Role-Based):
Perfect for companies with established sales processes and clearly defined roles. This structure works best in stable markets with straightforward products. It simplifies management and ensures seamless compensation rollouts. Example: A national insurance provider uses this model to maintain consistent performance standards across all branches.
Product-Based Hierarchy:
A must-have for organizations offering diverse products requiring distinct sales approaches. By organizing teams around product lines, businesses drive deeper product expertise and targeted growth. Example: A tech firm selling hardware, SaaS, and consulting services leverages product hierarchies to maximize focus and performance in each division.
