A Accelerator is a key concept in commission models and performance pay. It describes a mechanism whereby a seller receives an increased commission rate when he exceeds his sales target or set quota. In other words: once the quota is reached, the reward accelerates.
Where a traditional commission model is often linear, an accelerator adds an extra dimension of motivation. It sends a clear signal: The better you perform, the greater your share of value creation. For many companies, it is precisely the accelerator that makes the difference between a “good” and an “exceptional” sales effort.
The purpose of an accelerator is both psychological and business. Psychologically, it acts as a powerful incentive. Salespeople find that they have an extra gear as they approach their goals. Business-wise, the accelerator helps drive growth beyond what was planned because the best sellers are rewarded for exceeding expectations.
A classic example is a quota of DKK 1 million in annual revenue. For example, until the quota is reached, the seller receives 5% commission. But once the quota is met, the rate could rise to 7% or 10%. This shifts the focus from simply managing to measure” to generating additional revenue that strengthens the entire company.
An accelerator is typically defined in a compensation plan (salary and commission plan) and is closely related to concepts such as quota, on-target earnings (OTE) and tiered commission.
For example, a model can be structured such that:
The point is that the best performers get a disproportional reward, giving a strong competitive advantage in motivation.
Accelerators are not without challenges. The advantage is that they drive top-performers to deliver beyond what was expected, and they can be critical to achieving aggressive growth targets. They can also retain talent because salespeople know that extraordinary effort is actually rewarded in cash.
The downside is that they can become expensive for the company if they are not designed with clear frames. If the accelerator is too aggressively set, a handful of superstars could potentially create a major squeeze on the salary budget. In addition, it can create internal inequality if only a few employees have a realistic opportunity to hit the accelerator level.
Therefore, well-thought-out design of commission models is absolutely central. Accelerators must balance the company's growth goals with a sustainable wage budget and a fair distribution of incentives.
In the Nordic region, the wage tradition is characterized by a high degree of fixed pay and security, but many companies, especially in SaaS, the consulting industry and the real estate industry, implements accelerators as part of their incentive structure. This is linked to increasing competition and the need to retain skilled salespeople who often work internationally.
In Denmark, we particularly see accelerators in growth companies with subscription business, where margin turnover is high, and therefore it makes sense to reward sales beyond baseline. Here, an accelerator can help ensure that top performers do not simply deliver “approved”, but strive to exceed their quota and thus generate additional ARR (annual recurring revenue).
An accelerator differs from other elements of a commission plan. It is not the same as a bonusthat is typically a one-time payment for a specific milestone. It is also not identical to a kicker, which is often a fixed surcharge for specific conditions, such as the sale of a new product.
The accelerator is unique in that it is embedded in the commission scale itself and gradually amplifies earnings the higher the performance goes. It is dynamic and continuous, rather than pointwise.
As more companies adopt advanced incentive models, we see accelerators being coupled to not just revenue, but also margin, retention and cross-cutting KPIs. For example, they may be accelerators that are activated only if customers stay for more than 12 months or if sales are made with a certain degree of coverage.
With solutions that can automate the calculations of commissions, accelerators in the future can also be individually adapted to a much greater extent. In this way, they are dynamically adjusted according to the market, customer portfolio or the seller's historical performance. This makes the accelerator even more targeted and effective as a management tool.
An accelerator is a psychological and economic tool that can drive sales performance beyond baseline and create a culture where it pays to exceed expectations.
Properly designed, an accelerator can be one of the most effective incentives in a commission plan. But it requires transparency, reasonableness and automation to function optimally. For companies in the Nordic region, where fixed pay models still dominate, the accelerator is an opportunity to stand out while ensuring that top performers stay with the company and continue to create additional value.