Restructuring sales and comp plans for a recession — a message from our CEO

restructure sales orgs for a recession

It’s been nearly three months since I last gave an update regarding the market downturn. Since then, some tech companies, QuotaPath included, have started to see rebounds. For other organizations, however, conditions have worsened.

Shopify, for instance, added to 2022’s 30,000 tech layoffs after announcing 1,000 layoffs this week. Boosted Commerce and Outbrain also cut ties with 5 percent and 3 percent of their workforce, respectively. 

Economists and industry analysts like Billionaire investor Jim Coulter say we’re only through the first of three phases of this year’s unofficial recession.

But this isn’t a doomsday post. Quite the opposite, actually.

As leaders, rather than making siloed decisions internally, let’s share what we found out after evaluating Q2 misses. Let’s help one another prepare to take on what Coulter has called the next two phases of the downturn, and come out of this stronger and smarter together. 

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Now, what you need to know is that my 80% bar differs from what other sales teams say. Others set an 80% target that translates to the sales team attaining 80% of their quota over the year. 

My 80% rule is that 8 out of 10 sellers should hit their quota. This perspective promotes consistency across the entire team. 

When that didn’t happen in Q2, this indicated that we needed to restructure our GTM strategy at the team level as well as at the sales compensation level.

Here’s what we did:

Structure to strengths

First, we looked into how we segment our top of funnel (TOFU) inbound leads and how we could do it better.

For instance, some leads come in with no special requests, while others require enterprise support, complex compensation needs, ASC-606 compliance, or specific integrations. So as demands come in, how could we create immediate value for them?

The solution involved restructuring our sales team to their strengths and changing up roles accordingly. An example, one of our reps who has an incredible understanding of the technical suite within QuotaPath became a solutions engineer. In his new role, he can get involved in the sales cycles early on with reps who could benefit from having his expertise on the call.

Additionally, we created sales development roles (SDRs) to move the marketing qualified lead (MQL) process more efficiently. This has led to faster response times from the point of immediate interest conducted by a rep who has an exceptional understanding of our value add as well as the outbound motion. Our goal is to better quality our MQLs and move them faster through the funnel. Already, we’ve seen success. 

Adjusting compensation plans

Secondly, we reviewed our commission plan

What I’ve observed in my experience, is that companies are quick to cut low-performing sales reps in lieu of evaluating their sales commission structure. 

Admittedly, our Quota:OTE ratio was a bit out of whack. So, we used our own Quota:OTE calculator to readjust it so that we can get to that 80% attainment bar. 

This, paired with a transparent communication plan that kept everyone in the know and showed the data for our changes kept momentum and attitudes up.

So what is there to learn here? 

Admit your weaknesses and lean into your team’s strengths. Build a culture and positions that align to those strengths. Look into compensation and see where you can make changes and demonstrate clearly to your team why those changes are being made. Honesty goes a long way.

The team will respect your changes a lot more than if you can’t explain the “why” behind it.

If you need assistance reviewing your plans or creating new opportunities for your sales team within your organization, please reach out (aj@quotapath.com). The more we support one another right now, the better the industry will be in the future.

Now, on to the second month of a better Q3. Let’s go!

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