Commission models that last: why pure closing commission buys cancellations

The short answer

A commission model is an instruction to the salesperson about what he should do. Pay only for the close and you are saying: get the signature, move on to the next one. Pay for the book of business and you are saying: win customers who stay. In recurring business — energy, payment, software, maintenance, insurance — the second model is the only one that carries in the long run.

There is no "standard" commission percentage that holds across industries. The right level follows from margin, contract length and sales cycle. Below you will find the five common models side by side, and a worked example of what a close really costs.

How high is a typical sales commission?

There is no fixed, cross-industry percentage: a typical sales commission depends on margin, contract length and sales cycle, and where nothing is agreed, section 87b(1) of the German Commercial Code (HGB) deems the "customary rate" for that line of business to apply to commercial agents. As a rule of thumb, the total compensation for one close should not exceed the contribution margin of the first twelve months; in recurring business you are better off paying that amount as a small closing commission plus an ongoing recurring one.

Anyone looking for a single number will be disappointed, and rightly so. I know of no publicly verifiable study that shows reliable rates across industries; sensible ranges exist only within one industry at a comparable margin, say between two payment providers or two energy suppliers. The Kienbaum sales study 2026 describes the direction rather than the number: hunters tend to get strongly variable, commission-driven models, while account managers get team bonuses with a broader mix of goals. That is why the rate always belongs in the contract, not in a rule-of-thumb figure from the internet. The rest of this article shows the logic for setting the level for your own business.

Common commission models at a glance

Model	How it works	Pros	Cons	Fits
Base salary + variable pay	Fixed salary plus bonus or commission on target	Predictable income, easier hiring, salesperson also looks after accounts	Weaker drive to close, fixed costs even in a weak quarter	Long sales cycles, account management, complex products
Pure closing commission	One-off payment per contract, no base	No cost without results, strong push to close	Rewards fast deals over good ones, customer left alone after signing, high turnover	One-off sales with short cycles, independent agents
Recurring (trail) commission	Ongoing share of the customer's revenue while they stay	Salesperson cares about retention, pay follows real value	Low income at first, the book can turn into a pension	Recurring revenue: payments, energy, software, maintenance, insurance
Tiers and accelerators	Higher rate above a target threshold	Rewards top performance, keeps top sellers	Invites pushing deals into the next quarter, complex	Teams with clear quotas and measurable new business
Team or override commission	Leader earns a share of the team's revenue	Makes building and training people part of the pay	Risk of structures that recruit more than they sell	Growing sales organisations with management layers

On percentage ranges: I deliberately give none. I know of no publicly verifiable study that shows reliable cross-industry rates. The Kienbaum sales study 2026 describes the direction, not the number. Hunters often get more variable, commission-driven pay; farmers more often get team bonuses with a broader mix of goals. For commercial agents, German law only covers the case where nothing was agreed: section 87b(1) HGB then applies the customary rate.

Override commission deserves a word from my own experience. At MEG AG my sales team grew from 40 to 750 people across seven locations in 36 months. At that pace, how you pay your leaders decides whether they develop salespeople or just count heads.

What pure closing commission does

I have built and taken over sales organisations with both models. With pure closing commission, three things happen reliably:

1. The salesperson sells whatever gets signed quickly, not what fits. The cheapest package, the longest term, the first commitment.
2. After the close the customer is on his own. Onboarding, follow-up questions, the first invoice: no longer the salesperson's job, so nobody does it.
3. The first-year cancellation rate rises, and sales cost per lasting customer explodes, because for every customer who stayed you have paid for two that were sold.

The Flatpay figures that became known in August 2026 show this at scale: around 2,000 staff, door-to-door field sales, 39 million euros of revenue and an operating loss of 70 million in 2025. Sales is faster than the business.

The model that lasts

Three components, in this weighting:

Closing commission, reduced. A base so the salesperson can live in the first month. No more than a third of the contribution margin the customer brings over twelve months.

Recurring commission, monthly. A percentage of the customer's ongoing revenue for as long as he stays. This is the part that turns the salesperson into an account manager without anyone having to tell him. He calls after three months of his own accord.

Clawback liability. If the customer cancels in the first six to twelve months or does not pay, the closing commission is offset pro rata. That is not a punishment but the flip side of the recurring commission: whoever earns from the staying also carries the leaving.

Worked example

A customer brings 80 euros of contribution margin a month, expected contract term 36 months, so 2,880 euros.

Model	Salesperson receives	If cancelled after 6 months
Close only: 600 euros	600 euros one-off	600 euros, the company has 480 euros of contribution margin, a loss of 120 euros
Close 250 euros + 10% recurring	250 + 8 euros monthly = 538 euros over 36 months, 250 + 48 = 298 euros if cancelled after 6 months	the company has 480 euros of contribution margin, costs of 298 euros, no loss

Over the full term the salesperson earns almost the same in the second model. The difference is not the amount but when it flows and what it depends on.

Calculation: what does a customer who stays cost?

The table above looks at one customer. The more useful sum covers a whole team. Every figure here is a made-up example with round numbers, not market data.

Assumptions: 100 closes. 80 euros of contribution margin per customer per month. 25 customers cancel after six months; 75 stay for 36 months. Total contribution margin: 75 × 2,880 + 25 × 480 = 228,000 euros.

	A: 600 euros per close, no clawback	B: 600 euros per close, 12-month pro-rata clawback	C: 250 euros per close + 8 euros recurring a month
Cost per customer who stays	600 euros	600 euros	538 euros
Cost per customer who cancels	600 euros	300 euros (300 euros clawed back)	298 euros
Total commission	60,000 euros	52,500 euros	47,800 euros
Cost per lasting customer	800 euros	700 euros	637 euros
Share of contribution margin	26.3%	23.0%	21.0%
Paid out in the first 6 months	60,000 euros	60,000 euros, of which 7,500 euros to be recovered later	29,800 euros
Who carries the cancellation risk?	The company alone	The salesperson, through repayment	Both, with nothing to recover

Three things stand out. First, model A costs a third more per lasting customer than the 600 euros on paper. Second, the clawback in model B cuts the cost but shifts a repayment risk onto the salesperson. 7,500 euros have to be recovered from people who have often spent it already. Third, model C needs no clawback, because nothing is paid in advance.

I learned that second point the hard way. From 2008 my company Qualitura GmbH sold private health insurance by phone and online. Within twelve months we had 150 sales partners and 14 million euros of revenue. In 2012 the legislator extended the clawback period from one year to five. A model built on commission paid upfront was no longer viable. Today that rule sits in section 49 VAG.

For commercial agents under German law: the commission claim lapses once it is certain that the customer will not pay (section 87a(2) HGB). Amounts already received must then be returned. Terms that depart from this to the agent's detriment are void under section 87a(5) HGB. For employed salespeople on commission, section 65 HGB applies these rules too. How to draft an enforceable clawback clause in a specific case is a question for a lawyer. The article on closing commission explains when the claim arises.

Four rules for implementation

1. Simple enough for a beer mat. If the salesperson cannot work out his commission in his head, it does not steer him.
2. Pay out on receipt of payment, not on invoice. Otherwise you are paying for customers who never paid.
3. No cap at the top. Cap your best salesperson and you lose him.
4. Recurring commission does not survive a change of salesperson. It belongs to whoever looks after the customer, otherwise it turns into a pension.

What this has to do with recruiting

A model with a recurring component attracts different applicants: people who want to build customers rather than work through lists. You can spot that in an interview within five minutes. Anyone who asks about the size of the closing commission before asking about the product will be gone after the twelfth month, and his customers with him.