Here is the detailed policy for Andovar OTE Plan for the Year 2021
Farmers (Account Managers)
Farmers (or AMs) will be targeted on account retention and growth.
Their strength is their ability to forge deeper and stronger relationships with clients and uncover new areas of business from developing those relationships.
They will manage a Book of Business, which will cover a diverse range of clients. They will receive a bonus based on the overall growth of all accounts under their care at the end of the year.
Account Managers
AMs will be remunerated for the sales based on an OTE (on-target-earnings) bonus structure. This policy takes effect as of Jan 1st, 2021.
An OTE structure rewards AMs for achieving specific targets set for existing business. These targets are based on previous sales performance of each customers.
Only Existing Business, i.e. sales from a client that has been with Andovar more than 365 days will count towards an AMs target. In case of a referral obtained from an existing customer or a client belonging to a BDM who has recently left the company, the one-year rule does not apply.
Payment of the bonus will be done yearly at the end Q1 of the next calendar year, should the AM have achieved partial or full target in that year.
OTE Structure 2021
The proposed structure for the Andovar OTE model is as follows:
|
Retention OTE |
75-100% Sales Retention of Previous Calendar year |
Payout 1 |
|
Growth OTE |
5% |
Payout 2 |
|
Growth OTE |
11% |
Payout 3 |
|
Growth OTE |
17 % |
Payout 4 |
AMs will be informed individually about their targets and the bonuses. This information is confidential.
Payment will be made once all the invoices for those sales have been paid by the customers with a cut off date set on the 31st of March 2022. Any invoices that have been invoiced by 31st December 2021 but haven’t been paid by the 31st of March 2022 will not count towards 2021’s quota. Instead it will be counted for 2022 as long as the client has paid the invoice.
Targets
Targets are based on expected revenues from your overall book of account.
Targets will be reviewed on an annual basis and are discretionary.
- Should AMs achieve 100% of their target consistently, they will be considered for further career advancement.
Factors affecting changes of AMs target between years:
- Completion of target in previous years
- Salary increases
- Periods of long absence (due to sickness / maternity or paternity leave / etc.)
What Business Counts?
Existing Business
The OTE structure for AMs is designed to reward Existing Business only.
Any sales from New Business accounts will not count towards the OTE target, however you are expected and required to manage these accounts with the same urgency as existing client. No preference or favoritism will be tolerated. As a reminder, Existing Business accounts are clients who have been working with us for more than 1 year.
New Business includes invoiced sales for one year from the date of first invoice.
New Business comes from:
- Companies Andovar has never worked with before
- Leads handed off from Lead Generators
- Companies whom we have worked with before, but have not given us any business for more than 2 years (based on date of invoice)
AM FAQs
What about sales I made last year, but which only got invoiced this year?
The 2021 target is based on invoiced business in 2021. So, if you have any Existing Business sales from 2020 which were only invoiced in 2021, then those will also count towards your 2021 target.
Who is going to be managing the existing business accounts while I’m away?
Existing business accounts will be managed by another AM of the same region/office as yours.
Why are BDMs not allowed to keep Existing Business clients?
We want BDMs to focus purely on winning New Business. Managing Existing Business gets in the way. We want to separate the two functions, to allow BDMs to be more efficient.
What happens when a New Business client closes won?
Once a new client is won, there will be a formal hand-over to the AM team at project kick off.
Why can’t BDMs manage communications with the client?
We want BDMs to focus only on selling. Account communications and admin work will slow you down. To begin with, you may still be copied in on communications, but the goal is to move all client communications, administration, quotes, complaints, etc., away from the BDM to the AM so that the BDM can focus on new business only.
How have targets been set?
Targets have been set based on the need for the company to achieve its own overall goals. AMs are split into tiers based on their loaded costs to the company, with other factors being their expected level of performance, industry norms, experience level, previous years’ sales, prolonged periods of absence.
We want all targets to be achievable, but not easy.
What will be my target?
Your target and bonus will be announced to you individually. This information is confidential.
What if I am a new starter?
Your target will be set as a percentage of the overall target. We will factor in that you are new to the company, but you will still be placed in a tier according to your overall loaded costs to the company. For those starting mid-year, the target and bonus will be adjusted pro-rata.
When does the bonus get paid?
Shortly after the cut off date which is end of Q1 the following year.
What happens if the client doesn’t pay their invoice in full?
Only the amount paid will count towards your target. This may mean you fall back below the level of where the bonus is paid and may mean that no bonus is paid out for that year.
How long does Existing Business last for?
For as long as you can manage this client / the client is active within Andovar. After two years of inactivity the account will be up for grab and BDMs can try their luck again. In case the client become active again, the regular cycle of New Business and Existing Business will apply again.
Why is my bonus not the same amount as per the OTE file shared to me?
Based on the KPI that have been shared at the start of the year, bonus can either go up or down depending on the KPIs achieved.
How is New and Existing Business Calculated in NetSuite?
NetSuite will automatically change the status from New to Existing in NetSuite 365 days after the first invoice has been sent to a new client. If a projected is kicked off before the end of the existing business period but invoiced after, it will count towards the Account Manager quota and not the BDM.
Only the invoicing date matters.