Designing Effective Sales Compensation Plans for "Tip of the Spear" Hunter Roles

In the rapidly evolving pharma services industry, which includes Contract Development and Manufacturing Organization (CDMO), Contract Research Organization (CRO) and Contract Testing Organizations (CTO), companies are reimagining their commercial models to maximize customer acquisition and expansion.

At the heart of this strategy lies the “tip of the spear” or “hunter” sales role: sellers that are tasked with securing new logos. While account managers nurture existing relationships, these hunters are characterized by their appetite for risk, comfort with rejection and drive to pursue new opportunities. Hunters typically work at a different pace than account managers, focusing on initiating conversations with potential clients, qualifying leads and identifying initial growth opportunities.

Because of this timing difference, these roles require distinctly different sales compensation approaches to drive motivation and performance. With current 2025 market trends resulting in reduced growth expectations, it is critical to appropriately structure the sales compensation plans to maximize growth opportunities.

Understanding the “Tip of the Spear” Role Dynamics in Pharma Services

The hunter profile in pharma services requires specific skills including:

• Excellent prospecting capabilities, with the ability to navigate complex stakeholder environments.
• Strong industry knowledge, to communicate credibly with sophisticated buyers.
• Comfort with longer, more complex sales cycles involving multiple decision makers.
• Strategic thinking, to position services against competitive alternatives.
• Resilience in the face of rejection and ability to overcome objections in a highly regulated industry.

These “tip of the spear” hunter roles encounter unique challenges that traditional account management compensation models simply cannot address. Most often, companies apply cookie-cutter compensation approaches to hunter roles, resulting in misaligned incentives that fail to reward the specific individual behaviors needed to break into new accounts and drive aggressive business development.

The solution lies in understanding that hunters require fundamentally different sales compensation structures than their account management counterparts. Account managers focus on service delivery, relationship maintenance and expansion within existing clients. In contrast, hunters operate in high-risk environments where success depends on prospecting capabilities, industry credibility and resilience in navigating complex stakeholder environments.

The Critical Pay Mix Decision

The foundation of strong hunter compensation starts with the right pay mix, which is the ratio between base salary and variable compensation. Research from The Alexander Group indicates that hunter roles should maintain more aggressive pay mixes compared to account managers, with industry benchmarks suggesting a 50/50 or 60/40 split between base salary and variable compensation for hunters. This reflects the direct impact hunters have on new business acquisitions and the importance of motivating high-risk behaviors that drive business growth.

The Multi-Component Design Considerations

In pharma services, effective hunter sales compensation plans require a multi-faceted approach and must focus on measurements that truly drive business growth. According to The Alexander Group’s compensation design methodology, the most successful plans align measures with specific business objectives and growth opportunities. This means strategically balancing and considering these plan elements:

1. New Logo Acquisition Component: The main component of the sales compensation plan should be focused on acquiring new clients.
2. Expansion Component: If the hunter is responsible for managing an account for a short period of time (E.g., 12 months), provide incentives for the hunter to maximize this growth prior to the handoff period.  If included, it is important to incentivize new logo acquisition more than expansion, like a higher measure weight, commission and/or pay curve. For example, provide the seller a 10% commission rate on new logos and 5% commission rate on expansion.
3. Key Sales Objectives (KSO): Provides flexibility for dynamic business needs that may not be captured in traditional sales metrics. KSOs (like MBOs) can be used to reward sales process milestones, specific strategic initiatives relevant for each seller and/or behavioral expectations that support long-term growth objectives.
4. Renewal Component: Typically, not part of a hunter sales compensation plan, but may be relevant if the transition period is longer (e.g., 2 years).

Alexander Group’s research indicates that only 21% of companies rate their sales compensation plans as “very effective,” with 91% making changes in 2025 to improve plan performance. This suggests significant opportunity for improving effectiveness in pharma services hunter sales compensation design.

Implementation Best Practices

Implementing successful hunter sales compensation in pharma services requires thoughtful planning and execution. Best practices include:

• Clear Role Definition and Crediting: Precisely articulate the differences between hunter and account management positions. This is to prevent role confusion and sales compensation plan misalignment and ensure proper crediting.
• Performance Expectations: Establish realistic but challenging quota levels based on territory potential and market opportunity, typically setting quotas that 50-60% of the team can achieve.
• Account Transition Planning: Create clear guidelines for when and how to transition accounts from hunters to account managers to prevent sales compensation conflicts; options include right away or after a period of time (e.g., 12 months) to support growth within the account.
• Robust Communication: Implement a comprehensive communication strategy to make sure that hunters understand how their sales compensation aligns with company objectives and their specific contributions to growth.
• Regular Plan Review: Monitor plan effectiveness quarterly and be prepared to adjust as market conditions change or if unintended consequences emerge.

Driving Growth Through Strategic Sales Compensation

The pharma services industry’s expansion creates significant opportunities for companies that can successfully motivate their “tip of the spear” sales teams through strategic sales compensation design. By implementing the proper pay mix and multi-component design framework that aligns with business objectives, companies can drive aggressive new business acquisition while maintaining cost discipline.

As the pharma services sector forecasts low single-digit growth for 2025, hunters’ jobs are an essential strategy for many companies to drive higher market share growth. Thus, getting hunter sales compensation right is essential for successfully navigating and competing in this challenging landscape. Companies that successfully design and implement strategic hunter sales compensation plans will be better positioned to accelerate growth, retain top talent and outperform competitors.