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Pay a closer for signatures and you will get signatures. Pay a closer for cash that stays collected from clients who actually fit, and you will get a very different person on the phone.
I run a one-person business, so I am not going to pretend I have a closer story to tell you. What I have is the view from the other side of the funnel: I have watched what ads deliver into a sales conversation, and I know how fast a bad incentive turns good leads into refunds. If you are still deciding on the role itself, start with setter, closer or both.
Why does a commission plan change behavior more than training?
Because training is a conversation and pay is a rule. A closer will remember your sales call framework for a week. They will remember what gets paid on the 15th for as long as they work for you.
Sales and marketing have been blamed for each other's failures for a long time. The Harvard Business Review piece on the topic opens with sales saying marketing prices too high, and marketing saying sales botched an otherwise brilliant rollout.4 A commission plan sits right in the middle of that fight, because it decides what the closer is willing to say yes to.
What the plan quietly teaches
If the closer is paid when the contract is signed, the plan teaches speed and yes. If the closer is paid on a flat revenue number, the plan teaches discounting to hit it. If the closer is paid only on new bookings, the plan teaches them to ignore whether that client ever finishes the program.
None of those people are bad. They are rational. Your plan is the real script, and I would write it before I wrote any other.
What should a first closer actually be paid on?
Cash collected. Not booked revenue, not signed contracts, not "verbal yes" in the CRM.
Cash collected, released in tranches
Say a client pays in full on the call. I would not pay the full commission that day. I would pay part when the cash clears, and the rest after the refund window has closed. If the client is on a payment plan, pay the commission as each installment clears.
The reason is not distrust. It is that card payments can be pulled back. Stripe's documentation says card networks typically allow cardholders to start a dispute within 120 days of the original payment, and that a dispute can take two to three months to resolve.3 If you pay on the signature, you are carrying that risk with your own money, and clinics feel it hardest (see telehealth chargebacks).
120 days
Match the holdback to the real risk window
A clawback is only fair when it is written down, short enough to be reasonable and tied to something the closer can influence. I would set the holdback to your actual refund policy, plus a buffer for disputes. If your refund guarantee is 30 days (see Refund Policies That Protect Cash and Reputation), a 30 to 45 day holdback is easy to explain. Anything longer than the dispute window starts to feel like withholding pay.
- Cash clearsPart of the commission is paid
- Refund windowHoldback sits until it closes
- Balance releasedPaid once the cash is safe
- 30 and 60 day checkRetention kicker if the client is active and undisputed
How do you pay for good-fit clients, not just closed ones?
You need a number that moves when the client turns out to be a good fit, and the closer has to be able to see it.
Add a retention kicker
Keep the base commission on collected cash. Then add a smaller bonus that pays at 30 or 60 days if the client is still active, has not requested a refund and has not disputed the charge. That single line pays the closer to say, "This is not the right program for you."
Without it, saying no costs the closer money and saying yes to a poor fit is free. With it, a fit decision has a price on both sides.
Leila Hormozi made the general version of this point in a hiring video she posted on February 14, 2025. She was talking about employees at her own company, not closers.5
Compensation in general does not just exist to attract the right people but also to repel the wrong ones.
A retention kicker does exactly that. It makes the plan unattractive to anyone who only wants the signature.
Give them a clean way to disqualify
Closers under quota pressure hate losing a deal. So I would give them a defined disqualify path: three or four written criteria, a short note in the CRM, and no penalty for using it. The point is that a disqualified lead is a good outcome, not a miss.
A closer who is allowed to say no is worth more than one who is only allowed to say yes.
Where does overpromising come from?
Mostly from pressure, not malice. When the month is short and the number is not hit, a few extra promises about results are the cheapest tool available.
The Federal Trade Commission has been explicit about this territory. Its notice to businesses lists practices including false or misleading claims about the profits or earnings participants can expect, suggesting that represented earnings are typical, and telling people they must act immediately.1 The notice went to businesses in categories that include investment and business coaching, and the FTC says appearing on its list does not suggest the business did anything wrong.1
I read that as an operating instruction, not a scare: write down the claims your closer is allowed to make, record the calls, and check the first twenty against the list. Educational note, not legal advice.
- Write an approved claims sheet: what the program does, what it does not, and which results you will never promise.
- Record every sales call and review the first several yourself.
- Pay part of the commission after the refund window, so a bad promise costs the closer something.
- Never reward a closer for a deal you would not have taken yourself.
Should your first closer be a contractor or an employee?
That choice is partly about money and partly about control, and the plan you write can change the answer.
The IRS says the evidence falls into three groups: behavioral control, financial control and the type of relationship between the parties.2 A plan that dictates scripts, hours, tools and quotas looks more like control than a plan that sets outcomes and lets the closer work their own way. Neither is wrong. They carry different obligations.
Do not copy a template off a forum. Spend an hour with a CPA or employment attorney before you hire, because the cheapest time to get classification right is before the first commission is paid.
What does a first plan look like in practice?
Here is the shape I would start from. The numbers belong to your margin, so I am leaving them out on purpose.
| Plan that pays on signatures | Plan that pays on kept cash |
|---|---|
| Paid when the contract is signed | Paid as cash clears and the window closes |
| Discounting helps the closer hit quota | Discounting lowers the closer's own pay |
| Refunds are your problem | Refunds reduce the closer's holdback |
| A yes is always the best answer | A fit decision is paid on both sides |
| Report: deals closed | Report: cash collected, refund rate, 30 day active rate |
The data matters as much as the percentages. You can only run this plan if your CRM records where each client came from, what they paid and when it cleared. That is the kind of connected tracking I build for clients, because a commission plan you cannot audit is a promise you will break.
Adding payroll is also a good moment to sketch your long-term plan, because every fixed cost changes what you can set aside. Hire the closer after you have closed enough yourself to know what a good call sounds like and what a bad-fit yes costs you. Then pay them for the thing you actually want: cash that stays, from people who should have bought.
Keep building.Ekai
Questions people ask
What is a fair commission structure for a first sales closer?
There is no universal number, so I design it from your margin instead of a rule of thumb. Pay a percentage of cash actually collected, release it in tranches as payments clear, and keep a clawback or holdback that matches your refund and dispute window.
Should I pay a closer when the contract is signed or when cash clears?
When cash clears. A signature is a promise, and card payments can be disputed for roughly 120 days under typical card network rules, so paying on signature means you fund the closer's mistakes yourself.
Should a closer be a 1099 contractor or an employee?
It depends on how much control you have over how, when and where they work, not on what you call them. The IRS looks at behavioral control, financial control and the type of relationship, so talk to a CPA or employment attorney before you decide.
How do I keep a closer from overpromising to hit quota?
Put approved claims in writing, record the calls, and tie part of the pay to the 30 and 60 day outcome of the client. The FTC has put money-making claims, including earnings and profit promises, on its list of practices that can bring penalties.
Sources
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