Build Your Compensation Tool Kit for Success
Almost twenty years ago, I started bringing sales compensation expertise into the freight broker world. My first client was a split-model shop, so I assumed every broker worked that way. Then I met a cradle-to-grave broker, then pod models, then “tables” and “desks”, mini cradle-to-grave teams on high-value freight. As different as the operating models were, the comp approach was nearly identical: a percentage of gross margin. Some shops added a quarterly profit bonus. That was about as fancy as it got. Customer ops barely existed. Track and trace was the rep checking in himself before he went home.
It worked then. It doesn’t work now.
Today, most brokerage org charts look nothing like those simple structures. Customer Sales is its own role, whether hunting, farming, or both. Carrier Sales has its own leader, its own metrics, and a rapidly changing set of responsibilities as AI booking comes into play. Account Managers grow the book once it’s landed. Customer Support and Track and Trace are separate teams, often offshore. Pricing is about to have its day in the sun, ensuring automated bookings use the best rate data available.
And every one of those roles needs its own comp plan.
The instinct, especially for owners who came up in the cradle-to-grave or early split-model era, is to pay everyone a percentage of GM. It’s the number they understand. It’s the number that built the business. And it feels fair. It isn’t.
Think about what each role actually controls. A Customer Sales rep brings in revenue and influences margin; GM works for her. An Account Manager on a mature book is keeping the customer, growing share of wallet, and protecting service. Pay him a flat percentage of GM and you’ve either handed him a windfall on someone else’s work or cut his pay when volume dips for reasons he can’t control. A target incentive, a defined dollar amount earned at goal, paid as a percentage of goal attainment, with KPIs for account penetration and margin, fits that role much better.
Carrier Sales pays on GM with guardrails: carrier quality, on-time performance, repeat usage. Post-Montgomery, that’s not optional. Customer Support and Track and Trace, if they’re on an incentive at all, should be tied to service metrics; on-time delivery, response time, tender acceptance, customer escalations.
The role I see paid wrong most often, though, is the manager. Twenty years ago she was the biggest producer who got promoted and kept a piece of her book. The override taught her to latch onto the top rep and ignore everyone else. That model is still everywhere, and it still produces the same outcome: a few superstars carrying a demoralized team. A manager plan today has two pieces: target incentive on team GM goal attainment, plus a second component on the percentage of her team members at or above goal. That’s how you get coaching.
One plan doesn’t fit every seat. The brokers who get this right build organizations that grow past the bullpen.
