Get Started with Tier Payouts

Learning Objectives

After completing this unit, you’ll be able to:

• Explain the tier payout function in Spiff.
  
• Describe how tier payouts work.
  
• Create a sales accelerator table.
  

Meet the Tier Payout Function

Salesforce Spiff is a leading sales compensation software that automates and simplifies the process of calculating and managing sales commissions. Tier payouts are a way to reward and motivate sales reps who are high-performers.

The tier payout function, tier_payout, is similar to the vlookup function, but for a range of values. It uses what Spiff calls a range table. It identifies which range a numerical value or variable falls within, and returns the specified column expression for that row.

The syntax for the tier payout function is tier_payout(value, table, [tiebreak_below], [return_column]).

Let’s examine each of the function’s arguments.

• value represents the value that will be compared against the range table.
  
• table references the range table created to determine the appropriate commission rate.
  
• [tiebreak_below], which is optional, determines what happens if the value entered is present in multiple tiers. If no argument is entered for the tiebreak, the default is the tier with the lower value.
  
• [return_column], which is optional, defines a specified return column. Use this argument if multiple return columns exist on a range table. If only one return column exists on the range table, it is selected by default without this argument. You specify the return column within quotation marks.
  

You can use previously created worksheet calculations and mathematical operations within a range table. Use the syntax WorksheetName!CalculationName to reference‌ this. Make sure to spell the worksheet name and formula name exactly, including capitalization.

In this module, find out how tier payouts work, create a range table, build a tier payout rule, and set up metrics.

How Do Tier Payouts Work?

A sales accelerator table increases the commission rate that a sales rep earns after a certain milestone. To illustrate a tier payout, imagine your company has this sales accelerator table.

In a monthly statement period, one rep brings in $125,000 in total annual recurring revenue (ARR). In this tier payout structure, every deal is commissioned at a 4% rate. If another rep brings in $220,000 in total ARR, this brings them into the second tier, so every deal in the statement is commissioned at an 8% rate.

How is this different from a marginal payout? In marginal payouts, for the rep who earned $220,000 in ARR, all of the deals that bring them up to $150,000 are commissioned at a 4% rate. The remaining $70,000 in ARR is in the second tier, so deals earning that final $70,000 are commissioned at an 8% rate. This can result in some deals having what we call blended rates. Why? Because a deal they close might be partially commissioned at the rate for one tier, and partially commissioned at the rate for another tier.

To recap, here’s the difference between tiered and marginal accelerators.

• Tiered accelerators apply the maximum achieved rate to the entire period’s sales.
  
• Marginal accelerators apply only the amounts within each range to the sales in that range.
  

Create a Range Table

In this module, we assume that you’re a Salesforce Spiff administrator with the proper permissions to set up tier payout rules. If you’re not an administrator for Spiff, that’s OK. Read along to learn how your admin would take the steps in a production org. Don't try to follow these steps in your Trailhead Playground. Spiff isn’t available in the Trailhead Playground.

To build a tier payout rule, you create a range table that represents the sales accelerator table. Let’s get started!

Under the Plans tab in Spiff Designer, click the menu and select the option for New Range Table.

If you create the range table here, it isn’t associated with any plan. If you want the range table to stay within a plan, hover over the plan name and select the same option (New Range Table). This is similar to the folder structure on your computer. You can always drag a table to change its location.

To rename your table, hover over your new range table and click the menu option, or double-click the table name. ‌Your table has a name and a display name.

• The name must start with a letter and contain only letters, numbers, and underscores. This name is what is referenced in the tier_payout function for the table argument.
  
• The display name is what shows in the Library panel and can contain spaces and special characters.
  

Simply click a cell in any column of your range table to edit your values. Just remember to save your changes when you’re done.

To edit the column header name, double-click the header itself. Note that you can’t rename or delete the first three columns as they’re necessary for the functionality of this table type.

To add or delete columns, click the dropdown on a column header while in edit mode.

You can use previously created worksheet calculations and mathematical operations within a range table. Just make sure to spell the formula name exactly, including capitalization.

You’ve created a range table, learned how tier payouts work, and understood the tier payout function. In the next unit, let’s build a tier payout rule.