Since the end of 2022, investors across the tech industry have tightened their reins on their portfolio companies.
As a result, business efficiency metrics, such as profitability and line of sight tocash flow, are a top priority for most SaaS companies and startups.
On Wednesday, March 1, QuotaPath hosted the webinar “Getting crafty with comp plans to maximize revenue efficiencies,” featuring our VP of Finance Ryan Macia and our Sr. Director of RevOps Ryan Milligan.
In it, the two leaders shared compensation tactics that complement and drive behaviors tied to these efficiency metrics. They wrapped the conversation up by sharing 5 guardrails to consider should you implement any of their suggestions.
Watch the full webinar below and read on for key takeaways.
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Compensation levers to address GRR, CAC, and more:
For an account executive comp plan, the Ryans suggested the following.
Solving for Retention
- Encourage multi-year deals with a SPIF
- Use higher rates for customer segments with higher retention rates (ICP vs Not)
Addressing Gross Margin
- Incentives for pricing protection
- Decelerators on lower margin deals
Promoting Cash Flow
- Net 30-60-90 SPIF
- Payouts eligibility
- Decelerators for monthly deals
“What gets incentivized gets influenced.”
— Ryan Macia, Vp of finance
What about account managers?
Solving for Retention
- Incentivize early renewals
- GRR-based plans (focus on revenue protection over expansion)
- Multi-year renewals & contract conversions
Increasing Gross Margin
- Increase rates for higher margin renewals
- Cross-sell/upsell drivers
And, don’t forget to pay attention to these 5 guard rails when considering changes:
- Understand your effective rates
- Avoid overcomplicating your comp plans (can you explain it to a friend easily?)
- Give your reps visibility into how they can move the metric your board wants you focused on
- Don’t reinvent the wheel. We’ve got free comp plan templates to help.
Remember, what gets incentivized gets influenced.
About QuotaPath
QuotaPath aligns and motivates growing revenue teams by automating and providing visibility into real-time and forecasted earnings and attainment. Partner with QuotaPath on comp plan designs that are simple and effective and run our commission tracking and sales compensation software to automate the entire process. To learn more, schedule a demo with our team or start a free 30-day trial.
