Significant market changes throughout 2023 caused many leaders to rethink their business strategies for the year.
For instance, the slowest quarter (Q1 2023) for capital raised and the lowest number of funding rounds since 2017 led to a drop in venture capital by 45%. Only in the third quarter did we see signs of a rebound with Arm, Instacart, and Klaviyo’s initial public offerings.
As a result of the first half of the year’s slog of a start, revenue teams revamped their go-to-market goals to focus on metrics that measure business efficiency, such as customer acquisition cost and gross revenue retention.
However, many leaders left their revenue team’s compensation plans untouched instead of re-directing them to match and drive these new metrics.
So, what happened?
Our newest report, Solving the Biggest Sales Compensation Challenges: Insights from 450+ Finance, RevOps, and Sales Leaders, uncovers where teams struggled the most this past year and how it impacted their performance and retention.
Objectives of this sales compensation trends report:
- Identify where the disconnect between Finance, RevOps, and Sales Leadership occurs
- Explore the challenges faced by organizations during the compensation plan design process
- Uncover the biggest holes when managing commissions
- Offer guidance for success in 2024
To shape our report, we collected 450+ responses during the first half of 2023 from RevOps, Finance, and Sales directors, VPs, and C-level executives. These leaders primarily work in SaaS and at tech-adjacent companies with over 100 employees from the United States and the United Kingdom.
In conducting the survey, we collaborated with Global Surveyz, an independent survey company.
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4 key themes revealed
Revenue leaders resoundingly agree that sales compensation plans need improvement
- 100% of revenue leaders want to see improvements in their sales compensation management process
- 97% of leaders have issues with their compensation plans
- 100% struggle with the compensation plan design process
Whether it is your first time building a comp plan or your 500th time, leaders agree that the compensation plan design and execution processes need work.
A disconnect exists between how RevOps, Finance, and Sales view the success of compensation plans
- While 12% of Finance leaders felt confident that their comp plans aligned with their business metrics, only 1% of RevOps did.
Most sales representatives find their compensation plans difficult to understand
- It takes reps 3-6 months to understand their comp plans.
This leads us to our last key takeaway — and the most striking.
91% of organizations have less than 80% of their sales reps hitting quota
- 31% of leaders cited “unrealistic quotas” as the cause
- 35% cited misaligned sales activities
- 32% attributed it to lack of motivation
Our report also unpacks the biggest challenges with sales compensation plans, top struggles during the design process, most needed areas of improvement in managing compensation, and how these impact rep performance and retention.
The best part?
Each section comes with tactical plays you can make to avoid these missteps in 2024.
QuotaPath partners with Finance, RevOps, and Sales teams to manage sales compensation more efficiently and accurately. With free resources to inform compensation plan design and strategy and an automated commission tracking and payment system, QuotaPath aligns teams, saves time, and increases revenue.