Measuring the effectiveness of sales commissions involves analyzing key metrics like conversion rates, revenue growth, and quota attainment. It also requires tracking individual and team performance against targets and KPIs and conducting regular reviews to identify trends and areas for improvement.

Businesses can optimize commission structures and incentive programs to drive growth and performance by leveraging data analysis.

When done correctly, you can learn data points like:

• Who are my most (and least) efficient sales reps
• Are the reps earning the most also selling the most
• What seasonal trends do we face
• Am I paying too high (or too low) of total commissions per deal
• What parts of my comp plan are driving selling behaviors?
• Are high-attaining products also the most profitable?
• Identify quota consistencies and inconsistencies across performers
• Which products or services are easier or harder to sell, what is their impact on attainment levels, and does this change over time?
• The health level of our commission structures

This blog explores commission effectiveness, offering insights into essential data, alignment with overarching business goals, and the tangible impact on team performance metrics and operational efficiencies. 

Buckle up, and let’s move mountains using sales commission data. 

Understanding Commission Effectiveness

For individuals in RevOps, Finance, and Sales Leadership, understanding commission effectiveness is crucial for several reasons:

Key Metrics

Analyzing key metrics related to commission effectiveness can provide businesses with valuable insights into sales performance, operational efficiency, and financial planning. 

We recommend tuning in to the following data points regarding commission calculations:

Business goal alignment: 

• Attainment over time: Measures how well sales commissions align with overall business goals by tracking the attainment of sales targets over periods to identify seasonality and show how consistent your reps are across periods. 
• Revenue growth rate: Evaluates the impact of sales commissions on driving revenue growth and achieving business objectives.
  • To calculate revenue growth rate:
    • Revenue growth rate = (  Current revenue – previous revenue) x 100
        Previous revenue
• Earnings by comp plan component: To determine if your comp plan is driving your key business objectives or North Star metrics, look at which elements of your comp plan you’re paying the most amount of commissions on.
  • Example: If your North Star metric is raising your ACV to $20K, and you pay an extra 3% commission rate on any deal >$40K, you’d look into how much in total commissions are you paying along that compensation path

Budgeting and financial planning:

• Commission expense ratio: Compares commission expenses to total revenue or gross margin, helping to ensure commissions are within budgetary constraints.
• Commission payout ratio: Tracks the proportion of revenue allocated to commissions, aiding in accurate financial forecasting and planning.
• Effective rates: Collective commission percentage per deal when factoring in every role that earns a commission of one deal.
  • TIP: This should be under 25%

Sales performance optimization:

• Sales conversion rate: Indicates the effectiveness of sales efforts in converting leads into customers, reflecting the impact of commission structures on sales performance.
• Average deal size: Measures the average value of sales transactions, revealing how commission incentives influence sales representatives’ focus on high-value deals.

Operational efficiency:

• Sales cycle duration: Evaluate the efficiency of sales processes and how commission structures impact sales cycle length.
• Time to quota attainment: Indicates how quickly sales representatives reach their targets, reflecting the efficiency and effectiveness of commission plans.

Data-driven decisions:

• Commission payout variance: Tracks deviations from expected commission payouts, enabling data-driven adjustments to commission structures based on performance trends.
• Sales performance analytics: Utilizes data on individual and team sales performance to inform commission adjustments and optimize incentive structures.

Regulatory compliance and fairness:

• Commission payout accuracy: Measures the accuracy of commission calculations to ensure compliance with regulatory requirements and fairness in compensation
• Commission dispute resolution time: Tracks the time taken to resolve commission disputes, ensuring fairness and compliance with regulatory standards.
• Discrepancy/resolution count: Shows number of pay inconsistencies or questions per pay period to show how well your reps understand how they are paid and how accurate (or inaccurate) your compensation calculations and data are. 

Motivation and Retention:

• Sales team turnover rate: Indicates the rate at which sales representatives leave the organization, reflecting the effectiveness of commission structures in motivating and retaining talent.
• Employee satisfaction with commission plans: Gauges the level of satisfaction among sales representatives with their commission structures, which correlates with motivation and retention levels.
• SPIF success: Measures the impact of sales performance incentive fund or special performance incentive fund (SPIF) to see how well these drive selling behaviors and if it’s worth considering implementing full-time in your compensation plan
  • Read more: Learning Center article on implementing successful SPIFs in sales

By monitoring these key metrics, organizations can assess the effectiveness of their sales commission plans in driving business goals, optimizing sales performance, ensuring financial stability, maintaining operational efficiency, making data-driven decisions, complying with regulations (ASC606), and fostering motivation and retention among sales teams.

Aligning sales commissions with business goals

Sales commission effectiveness begins with how you structure your sales compensation plan. 

Aligning your commission strategy to business goals is the most important foundational piece. 

“Compensation plans should be the caboose, not the engine,” said Pablo Dominguez, Operating Partner, Sales & Customer Success at Insight Partners.

Most revenue leaders would agree.

However, in our 2024 Compensation Trends Report, more than 450 Revenue, Sales, and Finance leaders reported that alignment to business goals was the most needed improvement in sales compensation management. 

The result of this mismatch? 91% of companies reported that less than 80% of their sales reps achieved quotas. 

Moreover, leaders pointed to misaligned sales activities as a leading factor in these significant misses, which fall to poorly designed compensation structures. 

Steps to align comp plans to business goals: 

1. Clearly define the overarching business goals and objectives. These may include revenue targets, market share expansion, customer acquisition, or product penetration goals.
   
2. Identify key performance indicators (KPIs) that directly correlate with those goals.These may include metrics such as sales revenue, profit margins, customer retention rates, or new product adoption rates.
   
   “Then ask, can any of those priorities be reinforced with sales compensation design?” said Mark Roberge, Managing Director at Stage 2 Capital.
   
3. Design a commission structure that incentivizes behaviors aligned with those objectives. Determine which sales activities and outcomes are most critical to achieving the desired business results and assign appropriate commission rates or incentives. For example, if increasing market share is a crucial goal, structure a higher commission rate to reward acquiring new customers or expanding existing accounts.
   
4. Monitor the effectiveness of your sales compensation plan using the metrics listed above to ensure ongoing alignment between sales commissions and business goals. You can do this by regularly reviewing sales performance data against KPIs to assess the effectiveness of the commission structure in driving desired outcomes.
   

Lastly, identify areas where incentives may be misaligned or adjustments are needed to better align sales activities with business objectives. By maintaining flexibility and adapting the commission structure as business goals evolve, you can ensure sales incentives align closely with the company’s overarching strategic priorities.

The impact on team performance

Sales commission effectiveness is pivotal in shaping team performance within a sales organization. 

This is because the commission structure directly influences the behavior and motivation of sales representatives. When you design commissions to reward desired actions and outcomes, such as closing high-value or multi-year contracts, salespeople are incentivized to focus on activities that contribute to those goals. 

This alignment between commissions and desired behaviors fosters a high-performing sales culture and motivates your revenue teams to overachieve. Moreover, sales commission effectiveness impacts team morale and cohesion. 

When commission structures are perceived as fair and transparent, they cultivate a sense of equity among team members and minimize potential conflicts or resentment. 

Read Report

Conversely, if commissions are perceived as arbitrary or inequitable, it can lead to demotivation, disengagement, and even discord within the team. In fact, our trends report revealed that 9% of reps quit because of compensation errors or disputes. 

Therefore, sales leaders must ensure that commission plans are carefully crafted to incentivize desired behaviors while fostering a collaborative and supportive team environment.

Additionally, sales commission effectiveness directly influences overall team performance and productivity. A well-designed commission structure can drive higher levels of sales activity, improve sales conversion rates, and ultimately contribute to achieving or exceeding revenue targets. 

By continuously evaluating and refining the commission structure based on performance data and feedback from the sales team, sales leaders can optimize sales commission effectiveness and maximize team performance, driving sustainable growth and success for the organization.

Best practices for setting up sales commissions 

What are the best practices for setting up sales commissions? Automate the process by using commission tracking and commission management software. 

Doing so does more than just streamline the process for your team, which we’ve found typically dreads commission payout periods because of the onslaught of rep questions that follow. Automating it with a tool like QuotaPath increases calculation accuracy visibility into compensation (and accountability across your team as a result), and makes it easier to measure the efficacy of your compensation strategy.

With QuotaPath’s new modeling tool, you can also predict the performance and cost of your incentive structures by running attainment scenarios to see how much you would pay before implementing a plan.

However, if you’re not ready to automate this process yet, here are some best practices for setting up sales commissions that anyone can benefit from.

• Align with Business Objectives: Support your commission structure directly to your overarching business objectives and sales strategy. Identify specific goals such as revenue targets, market share expansion, or product penetration, and design commission plans that incentivize behaviors aligned with these objectives. 
• Maintain Transparency and Clarity: Communicate the commission structure, including the calculation methodology, payout thresholds, and any performance metrics or KPIs used to determine commissions. Avoid ambiguity or complexity that could lead to confusion or misunderstandings among sales representatives.
• Fairness and Equity: Ensure commission plans are fair and equitable across the sales organization. Avoid favoritism or bias in commission allocation by establishing consistent criteria and performance metrics for all sales representatives. Consider factors such as territory size, account complexity, and sales cycle length when determining commission rates to ensure fairness in compensation. 
• Regular Review and Adjustment: We don’t recommend changing your plan every quarter, but you should monitor and evaluate the effectiveness of commission plans based on sales performance data and feedback from the sales team. Identify areas where the commission structure may be misaligned with business objectives or adjustments are needed to optimize incentives. Review commission rates, payout thresholds, and performance metrics to ensure they remain relevant and competitive in the evolving market landscape. Then, don’t be afraid to adapt once you’ve got the data that demands changes. 
• Incentivize Desired Behaviors: Design commission plans to incentivize desired behaviors that contribute to long-term sales success and customer satisfaction. Consider incorporating incentives for prospecting, lead generation, customer retention, and upselling to encourage a holistic approach to sales excellence. Rewarding behaviors that align with the sales process and customer-centric values drive short-term results and foster sustainable growth and customer loyalty over time. 

To learn more about QuotaPath, schedule time with our team or tour the platform with a free trial. 

A recent study found that of 450 revenue leaders surveyed, 14% reported that their sales compensation plans fail to drive customer acquisition costs (CAC). Another 10% noted that their comp structures are too easily obtained. 

Both challenges represent the side effects of a non-optimized compensation plan, which can lead to a cascade of negative consequences.  

Additional downsides from a failure to focus on compensation plan optimization include: 

• Low Employee Morale and Motivation: Unfair or unclear compensation structures can demotivate employees. If reps feel they can’t reach their targets or that their efforts aren’t rewarded fairly, it can lead to decreased engagement and productivity.
• High Turnover: Disgruntled employees are more likely to leave for companies with more attractive compensation packages filled with sales performance drivers. This can be costly for businesses, as recruiting and training new hires takes time and resources.
• Focus on Short-Term Gains: A poorly designed comp plan might incentivize short-term, unsustainable behaviors. For example, reps prioritize quick sales over building long-term customer relationships.
• Alignment Issues: If the compensation plan doesn’t align with your overall business goals, it can lead to a misalignment of priorities. For instance, a plan emphasizing pure sales volume might not encourage reps to sell higher-margin products or provide excellent customer service.
• Administrative Headaches: Complex or poorly designed comp plans can be a nightmare for HR and payroll departments to administer, leading to errors and delays in payouts.

By optimizing your compensation plan, you can address these issues and create a system that incentivizes the behaviors that drive long-term success.

This blog examines success-proven tools and methodologies that foster revenue and finance alignment, drive sales team engagement and performance, and maintain compensation plan simplicity.

Introduction to Compensation Plan Optimization

We’ll start with an introduction to compensation plan optimization.

Imagine a sales compensation plan that:

• Drives down customer acquisition costs (CAC), ensuring you acquire new customers profitably.
• Presents clear goals and rewards that are attainable, motivating for your sales team, and profitable for your button line.
• Aligns perfectly with your overall business objectives, incentivizing behaviors that drive the results of your key targets.

That sounds pretty good, right? Unfortunately, many companies struggle with non-optimized compensation plans, leading to the abovementioned issues.

This guide dives into the world of compensation plan optimization. We’ll explore success-proven tools and methodologies that can help you achieve the dream scenario outlined above. You’ll learn how to foster revenue and finance alignment, maximize sales team engagement and performance, and maintain compensation structure visibility.

Gaining Visibility Into Your Compensation Structure

To optimize your compensation models, start by introducing a process or tool like QuotaPath that gives you and your revenue organization visibility into how commissions are tracked, calculated, and paid.  

Compensation plan automation and commission tracking software provide a clear window into your entire compensation structure. This newfound visibility empowers you to:

• Identify Inefficiencies: Unearth areas where your current plan might be overly complex or have unintended consequences.
  • Look up total effective commission rates per deal to see if you’re overpaying commissions across the collective roles tied to a deal without manipulating a spreadsheet
  • Easily lookup large commission rate payouts to see if it’s a problem with your comp plan or that the rep earned an accelerated rate due to plan rules
  • Check the efficiencies and inefficiencies of sales reps to measure your most profitable reps by evaluating Sales: Earning ratios
• Run Simulations: Test different compensation scenarios before rolling them out to your team. This allows you to identify potential issues and fine-tune the plan for optimal impact.
  • “Pressure test a few things,” said Stage 2 Investor and GTM Advisor Liz Christo. “Most models have broad-based assumptions. But what if every rep hits quota? What if every rep hits 120% of quota? Will we all be super excited about this, or will we see that this math doesn’t work when the accelerators kick in?”
  • Account for outliers and estimate total compensation costs at various team-wide performance levels. 
  • Learn more about QuotaPath’s plan performance modeling in-app. 
• Foster Transparency: A clear view into the compensation structure builds trust with your sales reps. They can see exactly how their performance translates to rewards, keeping them motivated and engaged.
  • Our 2024 survey found that it takes reps 3 to 6 months to understand how they earn commissions. This is due to overly complex plans, lack of access to their comp plans and progress, and poor communication and plan rollout from leadership. 

By gaining visibility, you lay the groundwork for a data-driven approach to compensation plan optimization.  The next section will explore the power of modeling and testing different plan variations.

Modeling and Testing Plan Performance

When it comes to modeling and testing compensation plan performance, we’ve found that many leaders will run models using last year’s data to see what they would pay this year.

“But they’re doing this from the core plan and not layering in SPIFs,” said QuotaPath VP of RevOps Ryan Milligan. “If I SPIF Everyone on my team, and my close rates go up, and the outbound pipeline grows by 40%, then what?”

QuotaPath can effectively model these scenarios so that you can go to your board and show your reps’ performance and the dollars in and out the door. 

“It allows you to see if you’d be happy to pay these commissions based on what’s coming in and team attainment,” Ryan said. 

Plus, modeling and testing are essential tools for RevOps and finance leaders who want to ensure their compensation plans drive the desired sales outcomes while remaining cost-effective and aligned with the business strategy. 

Customizing Compensation Plans By Role

Another way to optimize your compensation plan is by customizing compensation plans according to role.

For instance, you wouldn’t offer variable pay to a customer experience (CX) rep that only focuses on upsells. Doing so suggests that you want your CX team focused only on selling the customer more versus delivering value so that they renew and grow their account.

Different sales roles have unique objectives, challenges, and responsibilities. Consider customizing your compensation plan by role to motivate and reward your team. 

Here’s how:

Identify Key Performance Indicators (KPIs): Not all salespeople are created equal. For example, an Account Executive (AE) might focus on closing new deals, while a Customer Success Manager (CSM) prioritizes customer retention and upsells. Define the specific KPIs that matter most for each sales role.

Align Incentives with Objectives: Once you’ve identified key metrics, tailor the compensation plan to incentivize the behaviors that drive success in each role. For instance, AE’s plan might emphasize commissions tied to new customer acquisition, while CSM could reward upsells and renewals.

Account for Experience Level: Junior reps might require a higher base salary with a lower commission structure, while seasoned veterans might thrive on a performance-heavy commission plan. Consider experience level when designing compensation packages.

Address Regional Variations: Cost of living and market dynamics can differ significantly across regions. Factor these variations into your compensation plans to ensure fairness and competitiveness in attracting and retaining top talent across your geographical footprint.

Doing so should increase motivation because you’re tailoring their pay structure specific to their job function, improving alignment toward the right objectives, and fostering both customer and employee retention.

By customizing flexible compensation plans by role, you can create a system that motivates your team, aligns with your business goals, and fuels long-term sales success. The next section will explore the power of forecasting and experimentation in compensation plan optimization.

Build a Sales Funnel

Use our free sales funnel resource to see how many meetings your team needs to book to hit quota.

Calculate Now

Forecasting and Experimenting

Compensation plans are not static documents.  

They should be living, breathing entities that evolve alongside your business strategy and market conditions.  

This is where forecasting and experimentation come into play:

Forecasting Future Needs

Predicting Revenue Growth: You can forecast future revenue growth by analyzing historical sales data and market trends. This allows you to tailor your compensation plan to incentivize behaviors that will drive the desired revenue outcomes.

Proactive Pipeline Management: You should design compensation plans to keep your sales pipeline healthy, such as incentivizing outbound deals. Forecasting can help you anticipate future pipeline needs and adjust your plan accordingly. 

• For example, if you foresee a dip in new opportunities, you might temporarily increase commissions for closing existing deals.

Budget Planning & Cost Management: Forecasting future compensation costs allows you to effectively budget for payroll and ensure your plan remains financially sustainable.

Experimentation for Continuous Improvement

A/B Testing Different Structures: Don’t be afraid to experiment with different compensation models. A/B testing allows you to compare the effectiveness of various plan structures on a small scale before rolling them out to the entire team. This data-driven approach helps you identify the optimal plan for driving sales performance. You could also implement a SPIF for a period of time to test to see if it should be a long-term fixture in your comp plan. 

Adapting to Market Changes: The sales landscape is constantly evolving. By regularly testing and iterating on your compensation plan, you can ensure it remains relevant and effective in a changing market. For example, you might need to adjust commission rates or quotas based on new competitor offerings or customer buying behaviors.

Optimizing for Long-Term Success: Through continuous forecasting and experimentation, you can refine your compensation plan to drive long-term sales growth and achieve your overall business objectives.

By embracing a dynamic approach incorporating forecasting and experimentation, you can transform your compensation plan from a static document into a powerful tool that continuously adapts to fuel long-term sales success.

How To Ensure Your Team Understands Their Comp Plan

The more reps understand how they are compensated, the more likely they are to be incentivized by your plan.

Read Blog

Maintaining Clear Compensation Expectations

A well-designed compensation plan is only effective if everyone understands it. Unclear expectations can lead to confusion, frustration, and ultimately, a demotivated sales team. 

Here are five best practices to ensure clear compensation expectations throughout your organization:

By following these best practices, you can maintain clear compensation expectations and create a more engaged and motivated sales team.  A well-understood compensation plan fosters trust and transparency, leading to a more successful sales organization.

Success Story: Everview’s Record Sales With QuotaPath

Looking for a real-world example of how compensation plan optimization can drive sales success? 

Look no further than EverView’s impressive results after implementing QuotaPath.

EverView wasn’t just tinkering around the edges – they achieved record sales in just 3 months with QuotaPath. 

This dramatic improvement can be attributed to several key factors:

• Transparency and Trust: QuotaPath’s clear visibility features helped EverView create a culture of understanding and trust around compensation plans and commissions. No more confusion or frustration – sales reps have a clear line of sight into how their efforts translate to rewards.
• Scalability and Ease of Use: QuotaPath’s user-friendly design ensured a smooth implementation at scale. The system is easy to adopt and navigate, eliminating the complexities that can often bog down traditional compensation management processes.
• Boosting Efficiency: EverView cut their monthly commission calculation time to three hours for 80 sellers. 
• High User Adoption: EverView achieved an impressive 95% team-wide daily user adoption rate for QuotaPath. This widespread engagement demonstrates the system’s value and user-friendliness for the sales team.
• Record-Breaking Performance: The impact on sales performance is undeniable. EverView achieved their highest sales year to date, with a staggering 70% of the team hitting quota. QuotaPath empowered reps to see the direct connection between their efforts and earning potential, leading to a significant boost in motivation and results.

EverView’s success story is a powerful testament to the potential of compensation plan optimization. 

Leveraging QuotaPath’s visibility, ease of use, and scalability, EverView transformed its compensation plan from a potential roadblock into a powerful tool that fueled record-breaking sales performance.

To learn how QuotaPath can support your complex commission structures and make your process more efficient, schedule time with our team. 

This is a guest blog from Convoso that covers customer segmentation models.

In any business, success relies on your ability to understand your customers. What they want, how they feel, and the different ways they might view your brand. Sure, you might be able to get by marketing things at random, based on gut instinct. However, your odds of success will be far higher if you start leveraging customer segmentation models to fully understand your target market.

What is customer segmentation?

Customer segmentation means looking at all your customers and organizing them into groups based on relevant traits. For example, International Women’s Day might trigger email marketing from your brand, primarily targeted at your female customersThe above is an example of demographic segmentation focusing on gender. But there are several different types of customer segmentation models which all focus on different areas and trends. These include:

• Demographic segmentation.
• Geographic segmentation.
• Behavioral segmentation.
• Psychographic segmentation.
• Technographic segmentation.
• Firmographic segmentation.
• Needs-based segmentation.
• Value-based segmentation.

What is a customer segmentation model?

A customer segmentation model is a framework businesses use to divide their customers into distinct groups based on shared characteristics. This segmentation allows companies to tailor their sales, marketing, and product strategies to different customer needs, improving engagement and revenue outcomes.

Segmentation models can be based on various factors, including:

• Demographic segmentation: Categorizing customers by age, gender, income, or occupation.
• Firmographic segmentation: Grouping businesses by industry, company size, or revenue (common in B2B sales).
• Behavioral segmentation: Analyzing purchasing habits, product usage, or brand loyalty.
• Psychographic segmentation: Considering lifestyle, values, and motivations that drive buying decisions.
• Geographic segmentation: Dividing customers based on location, region, or market density.

A strong customer segmentation model helps businesses prioritize high-value prospects, personalize outreach, and optimize pricing and sales strategies to drive growth.

Why it’s important to use a customer segmentation model

Understanding the people who frequent your business is essential for making informed marketing decisions. Blind marketing, on the other hand, is liable to alienate otherwise loyal customers from your brand.

There’s no point in a private therapy practice advertising couples counseling to single people, for example. Just like you wouldn’t advertise B2B subscriptions and services to a non-professional, family-oriented market.

That said, lots of businesses cater to vast ranges of people. It’s rare to find a business with one sole target demographic. Hence the need to perform segmentation in the first place.

The benefits of customer segmentation models include:

• Enabling personalization.
• Improving your effective customer retention strategy.
• Increasing return on investment (ROI).
• Better informed decision-making equals less risk.
• Optimizing your customer experience strategy for a more tailored and impactful approach.

Now that we’ve hopefully won you over, let’s look at some of the different customer segmentation models you can use.

The different categories of segmentation models

There are so many different customer segmentation models it can be hard to know which one to go with. You’ve also got to choose the best approach to processing that data and minimize vendor management risk. Don’t worry, though, as this section breaks down how each model functions.

Demographic segmentation

Demographic segmentation is one of the most commonly used models. That’s because it focuses on population characteristics. As such, focusing on demographics offers a lot of flexibility. There are so many ways you can organize your customer base.

Different types of demographic characteristics include:

• Age.
• Race.
• Gender.
• Income.
• Employment.
• Nationality.
• Education.
• Marital status.

Take employment, for instance. If you know the professional demographics you’re catering to, you can include that information in, say, call center scheduling tools. Based on profession, you have some idea of when you’re more likely to reach a customer with marketing efforts. A self-employed freelancer might be accessible whenever, but a 9-5 secretary will likely be unreachable for much of the day.

Geographic segmentation

Geographic segmentation is another model that’s fairly self-explanatory. There are all kinds of reasons to organize customers based on their locations. Especially if you’re running an international business. Some types of businesses likely to use geographic segmentation are:

• Holiday/travel companies.
• Estate agents.
• Companies marketing climate-specific products (like winter or beachwear).

But its use is hardly limited to them. Geographic segmentation helps to avoid unexpected sales data quality issues when expanding your business and target market. Any organization can benefit from understanding the differences between customers in different regions and countries.

For example, you need to be aware of cultural differences when you market your brand. What’s fun and engaging in one culture might be inappropriate or outright offensive in another.

Behavioral segmentation

Rather than focusing on external factors like demographics or geographics, behavioral segmentation focuses on personal habits. Their purchase history is one of the most common examples.

Any behavioral information about your customers can be useful, such as hobbies and interests. That said, it’s often best to focus on behaviors relating to how customers engage with your brand. Things like:

• Ad engagement: Which social media or other sites do your customers see more of your ads, and how do they interact with them?
• Purchase methods: How many customers shop online versus your physical locations? What payment options do people prefer?
• Browsing habits: The products people look at, and how they engage with sales and promotional offers.

Psychographic segmentation

Despite its name, psychographic segmentation doesn’t actually psychoanalyze your customers. It is, however, focused on their feelings and attitudes, like values, interests, and lifestyle. This information is useful for understanding the personality types and preferences of those engaging with your brand.

This information is as flexible as it is valuable. With it, you can double down on appealing to existing customers, or alter your strategies to try and reach new target markets.

Technographic segmentation

This form of segmentation focuses on your customers’ preferences and overall comfort level with technology. Such as:

• The devices they use.
• Browser or app preferences.
• The site or app features they engage with.
• Their general level of tech-savviness.

The good news is, you can gain a lot of this information passively through your website or app data. For anything more, you may need to survey customers directly.

Firmographic segmentation

If you’re part of a B2B organization, chances are that you’ll rely on firmographic customer segmentation models. Rather than analyzing individuals, this approach focuses on client or customer businesses.

By understanding how client businesses operate, their processes and ideals, you can anticipate their needs ahead of time. This helps you maintain favorable B2B relationships and peak standards of professionalism.

Needs-based segmentation

It may sound obvious, but don’t underestimate needs-based customer segmentation models. Understanding customer needs is essential for tailoring the most effective solutions. For example, home delivery services need user-friendly systems for organizing delivery windows.

Let’s say you deliver heavy assets like furniture, and you get a lot of business from the elderly, and customers with disabilities. It’s important that delivery includes options for set-up assistance.

In other words, needs-based segmentation is how you identify the practical realities of your business model.

Value-based segmentation

Value-based segmentation means organizing customers based on their estimated ROI. How loyal they are, which products or services they purchase, etc. It’s about separating your regular buyers and big-ticket purchasers from those who only occasionally or lightly frequent your business.

Every customer is valuable, but still. It helps to know which markets are the most valuable for you to focus on.

How to pick the right customer segmentation model for you

Selecting the right customer segmentation model depends on your business goals, customer base, and available data. Here’s how to approach it:

1. Define Your Objectives – Start by identifying what you want to achieve. Are you looking to improve sales targeting, refine pricing strategies, increase retention, or personalize marketing? Your segmentation model should align with these goals.
2. Analyze Your Customer Data – Review the data you have on customers, including demographics, behaviors, firmographics (for B2B), and purchase history. If you lack key data points, consider collecting more through surveys, CRM tracking, or analytics tools.
3. Choose the Most Relevant Segmentation Type –
   • Demographic/Firmographic – Useful for broad market targeting (e.g., selling to specific industries or income brackets).
   • Behavioral – Best for refining sales strategies based on purchase habits or engagement levels.
   • Psychographic – Ideal for businesses that need to understand customer motivations, such as lifestyle or values.
   • Geographic – Works well if location influences buying decisions (e.g., regional pricing, climate-based needs).
4. Validate with Testing – Before fully committing, run small tests by applying different segmentation approaches to your marketing and sales efforts. Measure engagement, conversion rates, and sales performance to see which model delivers the best results.
5. Refine and Iterate – Customer behaviors change, so continuously review your segmentation model and adjust it based on new data and market shifts.

Customer segmentation model examples

The right customer segmentation model depends on your business type and goals. Here are some common examples used across industries:

Demographic Segmentation
A SaaS company targeting small businesses may segment customers by company size, ensuring startups receive different messaging than enterprise clients. This approach is best for B2C and B2B businesses looking to personalize marketing and sales strategies based on age, gender, income, or business characteristics.

Firmographic Segmentation (B2B Focused)
A sales compensation software company segments customers by industry and annual revenue, tailoring features to tech startups differently than enterprise sales teams. This model is ideal for B2B companies that need to customize outreach based on company size, location, and industry type.

Behavioral Segmentation
An e-commerce platform tracks purchase frequency and segments customers into first-time buyers, repeat customers, and VIPs, offering targeted discounts accordingly. This approach works well for businesses optimizing loyalty programs, cross-selling, and retention strategies.

Psychographic Segmentation
A fitness subscription company segments users based on motivations such as weight loss, muscle gain, or general wellness and tailors workout plans accordingly. This model is effective for brands that focus on lifestyle, values, and emotional drivers in purchasing behavior.

Geographic Segmentation
A retail chain segments customers by climate region, promoting winter gear to northern states while marketing summer apparel in warmer climates. This is useful for companies with location-based pricing, shipping, or regional marketing differences.

Needs-Based Segmentation
A cloud storage provider segments customers based on data storage needs, offering different plans for individual users, small businesses, and large enterprises. This approach is best for businesses offering tiered products and services with varying use cases.

Value-Based Segmentation
A financial services firm segments customers by lifetime value (LTV), prioritizing high-value clients with dedicated account managers and exclusive benefits. This model is ideal for businesses focused on maximizing revenue from their most profitable customers.

How to start using customer segmentation models

It’s possible you may have particular customer segmentation models in mind, depending on the sort of business you run. Say, for instance, that you run a B2B comms company offering an AI answering service. You’re probably planning to run firmographic segmentation to get leads on potential client businesses.

It’s not always that simple, though. So, here are three simple steps for getting started with customer segmentation models.

Find the most valuable forms of data for your business

The kinds of data you’ll need depend entirely on your business goals. For many online businesses, the aim is simply to increase web traffic and click-through-rates. In that case, behavioral data is vital as you need to understand how people are engaging with your site and where its weak points are.

On the other hand, a B2B company trying to expand its client base might focus on individuals with a specific job title. Similarly, a company investing in social activism might focus on gender or sexuality. In both cases, demographic information would be very important.

Establish methods and tools for data collection

Once you’ve figured out which data matters the most, you’re ready to choose collection methods. Surveying customers directly can be useful, if you can promote the survey enough to get a decent response rate.

Polls are only the tip of the iceberg, however. A lot of information can be collected passively through your website or app. For example, with Only Domains, you can figure out the percentage of your website’s visitors are from specific countries like Canada by redirecting people to location-specific web addresses like .ca.

Identify your largest customer segment and then drill down

As simple as it may sound, identifying your most dominant customer segment is absolutely essential. After all, you want to avoid any potential shake-ups from alienating core customers. For example, it might be obvious even without segmentation that your business mostly caters to men.

It’s when you segment even further that things get really interesting. With demographic info, you might find your demographic split between males aged 18-34 and 58-65. Then behavioral segmentation might show that most people are buying online and opting for evening or weekend delivery slots.

Of course, it’s not enough just to have this information. Your marketing and sales people need to be able to access it. That means including systems in sales tech stacks that allow your teams to observe customer trends in real-time.

Mix and match customer segmentation models

While it’s important to figure out the best segmentation model for your business, you don’t have to stick with just one. So, don’t make the mistake of thinking you have your customers all figured out.

There’s always more insight to tap into. It’s worth taking the time to try out different models with your business and see what you learn. Plus, your organization’s goals are liable to shift over time. You might start out focusing on web traffic, only to end up worrying about product diversification five years later.

At times like this, it’s always worth revisiting your customer data and trying something new.

Every new software purchase requires a clear return on investment (ROI) in today’s business climate.

Incentive management software is no different.

While the qualitative benefits of sales compensation automation provide revenue teams transparency and enable business growth and goal attainment, what are the cost savings?

We’d argue that time saved spent calculating, scheduling payouts, and addressing pay discrepancies and flagged deals equals money saved, but it’s not always clear just how that translates to dollars.

So, to help, our VP of RevOps, Ryan Milligan, built this ROI calculator to prove the quantifiable return of purchasing QuotaPath. Our calculator uses variables like manual costs associated with reps tracking commissions, incentive management admin costs, and performance improvements when using QuotaPath.

This blog is intended to provide an intro to QuotaPath and its benefits, including ROI.

Let’s get started.

Understanding the Cost of Manual Processes

Manual commission calculations and data pulling cause you to incur hidden costs. These administrative tasks keep reps from focusing on selling the deals that make them the most money, which impacts rep productivity and often leads to frustration and demotivation.

Likewise, RevOps and Finance leaders get bogged down with these calculations at the end of the month. We have many admins who, before QuotaPath, “dreaded calculating commission” because of the influx of rep questions (and sometimes anger since it’s their money) that follow a commission pay period.

Some real-life examples illustrating the impact of inefficient processes on business operations can be seen in our customers’ experiences.

For instance, Muck Rack cut the time spent calculating commissions from 5 days to 6 hours as they scaled their team from 50 to 100 reps. Before automating with QuotaPath, they manually built a commission spreadsheet for each rep, a labor-intensive, error-prone, and unmanageable process as the team grew.

Blackthorn is another QuotaPath customer whose manual commission processes became a “formula frenzy” as they scaled. They leaned on Salesforce formulas to calculate commissions early on until they found, “Formulas could not handle the complexity and scale as we expanded our teams and departments,” Joe said. “Now I can do it myself and directly in QuotaPath without creating a formula. It’s saving us five to 10 hours of work for every new quota.”

Calculating Rep and Admin Costs

Ready to calculate your QuotaPath ROI?

Here’s a breakdown of the variables involved in calculating rep and admin costs:

QuotaPath cost

Annual QuotaPath cost = Users x Price/User/Year

Users: The number of workers using the platform

Price/User/Year: The annual cost for each worker that will be using QuotaPath

Rep cost

Annual Rep Cost = Reps x Hours/Rep/Month x Rep Hourly Rate

Reps: The number of non-administrative workers using the platform

Hours/Rep/Month: The number of hours each rep spends tracking and calculating their earnings.

Rep Hourly Rate: The average rep salary at a certain OTE, backed into an hourly fully burdened rate.

Annual rep cost: The cost associated with reps manually tracking their earnings.

Admin cost

Annual Admin Cost = Admins x (Pulling data + Calculating + Rep questions) x Admin Hourly

Admins: Number of Admins managing compensation.

Pulling data: Number of hours spent pulling data

Calculating: Number of hours spent calculating commissions

Rep questions: Number of hours handling rep earnings questions and discrepancies

Admin Hourly Rate: A fully burdened hourly rate for Admins based on average Admin salary.

Annual admin cost: The cost associated with Admins manually managing compensation processes.

Performance improvements

Performance increase = Reps x Annual quota x Attainment lift

Reps: The number of non-administrative workers using the platform

Annual quota: Average annual quota per rep.

Attainment lift: Percent increase in rep performance after giving reps increased visibility to their commissions, enabling them to select the best deals to pursue and helping them understand how they earn, driving overall attainment improvements.

Performance increase: the additional amount reps will produce with greater selling time and compensation transparency.

Qualitative Benefits of QuotaPath

QuotaPath offers other benefits that aren’t as easily measured, including:

• Motivating reps: 30% of revenue leaders admit their plans fail to motivate their teams. QuotaPath solves this issue by providing reps visibility into commissions and compensation plans. This enables sellers to understand how they earn commissions, track earnings progress, and identify the best deals to pursue.
• Builds trust and alignment across Sales, RevOps, and Finance: 75% of Sales Reps don’t trust they are paid fairly. With QuotaPath everyone can reference the same data source for compensation–Reps see breakdowns of how they are paid, and Finance has clear insight into deal data and commissions on each deal.
• Provides valuable performance insights: QuotaPath gives leadership access to actionable dashboards that can provide insights into performance and help them prioritize coaching.
• Compensation modeling and testing: QuotaPath enables revenue leaders to test future comp plan changes using past historical data from their deal data source (ie: CRM). It also enables them to model the compensation cost for the next year.
• Logs planning and audit data: QuotaPath creates a log of compensation data, disputes, resolutions, and more for planning and auditing purposes. This is particularly important for ASC 606 revenue recognition compliance.
• Fits into existing tech stacks: QuotaPath seamlessly integrates with your favorite tools including HubSpot, Salesforce, Pipedrive, Quickbooks, Stripe, NetSuite, Close, Zoho, Copper, Google Sheets, and Excel.
• Encourages rep ownership and accountability over commissions: Reps get greater visibility and understanding of how they earn commissions with QuotaPath. This gives them greater control and responsibility over commissions.
• Eliminates the “black box” that compensation info has historically lived in: QuotaPath provides compensation transparency across your organization, eliminating confusion and misunderstandings.
• Helps Finance teams avoid hidden commission costs: The adjustments you implement in your compensation structures can trigger cascading effects that might not be immediately apparent. Our comprehensive reporting equips you with the necessary data to swiftly identify issues before they adversely affect overall team performance in the long run.

Build a Sales Funnel

Use our free sales funnel resource to see how many meetings your team needs to book to hit quota.

Calculate Now

Success stories

Don’t take our word for it. Consider these testimonials from QuotaPath customers highlighting their experiences and ROI.

EverView is an excellent example of how sales compensation automation and transparency with QuotaPath enabled them to achieve record sales.

Before teaming up with QuotaPath, EverView had 35 compensation plans for a sales team of 80. Fifty percent of their sellers reported not understanding their comp plan and didn’t know how much they had earned until they received their paychecks.

After launching QuotaPath, EverView consolidated their 35 plans into eight and then to 1 in QuotaPath. Reps could track plan attainment and current or future earnings on demand. This led to EverView having its highest sales year, with 70% of the team hitting quota and 20% achieving 90%.

“The move to QuotaPath freed our sellers to do what they do best, which is build better relationships with our customers,” said Dennis.

“Our comp plan was easily measured and easily viewed by our sellers in QuotaPath, which drove positive selling behaviors,” Ron said, “We had the best sales year in the company’s history.”

Prefect is another great example of a client who benefited from QuotaPath’s sales compensation automation and transparency.

Before partnering with QuotaPath, Prefect’s Finance team managed compensation with spreadsheets. Their plans to triple the sales team necessitated a scalable compensation solution. They also wanted to provide their reps with greater visibility and understanding.  

“We cut our time spent on commission calculations by 50%+ and have enjoyed providing real-time transparency to our sales reps and technical pre-sales team,” said Tom Egbert, Head of Finance. “This platform has significantly upgraded our sales compensation process. From the time saved on the financial side to our reps fully understanding and feeling motivated by our incentive structures. QuotaPath saves days of time worth of unnecessary spreadsheets and emails.”

Conclusion

Sales compensation automation and transparency aid business growth and goal attainment.

Automation eliminates the hidden costs associated with manual incentive management while it boosts sales rep and compensation administrator productivity.

Transparency helps sellers understand how they earn commissions, identify which deals to prioritize, and motivate behaviors that drive quota and organizational goal achievement.

Explore QuotaPath and unlock the potential ROI for your organization with a free trial and schedule a demo with our sales team to see the ROI at their organization.

Increasing compensation structure complexities, a hyper-focus on revenue performance, and the rise of remote work trends have led to an explosion of organizations adopting sales compensation management tools. 

So much so that the worldwide sales compensation software sector is anticipated to exhibit a compound annual growth rate (CAGR) of 9.9%, reaching a market value of US$ 7,413.9 million by 2033. North America is expected to remain a key market for sales compensation software, presenting over US$ 2.6 billion in absolute dollar opportunity over the next decade. (Source) 

Choosing the right commission tracking solution in sales compensation management is paramount for driving sales performance and ensuring payout fairness. 

Competitors such as Xactly, Captivate IQ, Spiff, Commissionly, and Everstage are notable contenders among the myriad options. 

However, this blog delves into why QuotaPath is the superior choice in this landscape.

By conducting a comprehensive comparison with these competitors, we aim to highlight the unique features and strengths that set QuotaPath apart. 

Join us as we explore why our commission-tracking solution stands out.

Benefits of Commission Software

Implementing sales commission software offers a range of benefits, including: 

Accuracy: Sales commission software ensures accurate calculation and distribution of commissions, reducing errors and disputes. 

Efficiency: Automating commission processes saves time and resources, allowing sales teams to focus on selling. 

Transparency: Sales commission software provides visibility into commission structures and earnings, fostering trust and motivation among sales reps.

Scalability: As businesses grow, sales commission software can easily adapt to team size and structure changes. 

Compliance: Sales commission software helps ensure compliance with regulations and company policies, reducing legal risks.

Analytics: Sales commission software offers insights and analytics on sales performance, helping identify trends and opportunities for improvement. 

Motivation: Clear and timely commission payouts motivate sales reps to achieve their targets and drive revenue growth. 

Integration: Sales commission software can integrate with other systems such as CRMs and accounting software, streamlining processes and data management. 

Customization: Sales commission software allows businesses to tailor commission structures to align with their goals and strategies. 

Cost Savings: Sales commission software ultimately saves businesses time and money by automating manual processes and reducing errors. 

Comparing key features

Here’s how the key competitors stack up against each other.

Differences between the options

Several key elements should be considered when evaluating your sales commission calculation software options. Below, we review these elements, what they are, and why you should consider them as you make your decision.

Integration capabilities

Most commission software platforms integrate with the main CRMs, such as Salesforce and HubSpot. You’ll want to look at how easy it is to set these up, map and match fields from your data sources, and transform data so that your compensation management system creates less work for you than more.

Confirm that the cloud-based commission software you select offers native CRM integration options, like QuotaPath, with no manual refreshes or nightly updates, so data is automatically pulled. This ensures real-time analytics and accurate commission calculations.

Customization capabilities

The incentive management platform you move forward with should facilitate changes any time you need to update a team member, set payout eligibility, add a new plan, or adjust existing plans.

Select scalable solutions enabling compensation plan modeling to test new plans before implementation, as QuotaPath does.

Make sure your chosen platform allows you to create custom commission plans, including elements like tiered commission structures and various performance incentives, such as bonuses.

Pricing visibility

It should be easy to ascertain the cost of your commission automation software by visiting the supplier’s website. Simple and transparent subscription-based pricing should be easily accessible. Only QuotaPath has pricing visible on our website. You should not need to request pricing through a form, email, or phone call or be subjected to a demo.

Implementation periods

Consider the length of your chosen platform’s implementation period. Look for an easy-to-understand solution with a user-friendly interface so new users can use the application without training. How long it will take to train your team and use the system to run commissions determines your time-to-value.

Look for an efficient, quality-focused onboarding process that quickly gets you up to speed. We are known and recognized for fast implementation periods of 2 months or less. We’ve seen some sales come through because “it’s been seven months, and we’re still not up and running.”

Success Stories with Commission Software

Sales commission calculation software is effective. Here are several examples of organizations that have benefited from automated commission tracking.

runZero

runZero, a rapidly scaling company, started to outgrow commission spreadsheets. They integrated QuotaPath with HubSpot to automate commission calculations, boost earnings transparency, and eliminate errors. They started their implementation within four days of signing with QuotaPath and were fully onboarding and automating commissions in less than two months. 

Sales compensation errors are no longer an issue.

EverView

EverView had 35 incentive plans, with some consisting of up to 12 components, for a sales team of 80. They were tracking commissions manually at that time. Their reps spent 2 hours each week calculating commissions. Fifty percent said they didn’t understand their comp plan and had no idea how much they would get paid until they received their paycheck.

After QuotePath was implemented, EverView reduced their plans from 35 to eight and then to 1 in QuotaPath, allowing sellers to track attainment and earnings anytime. 

The comp plan transformation, seller visibility into earnings projections, and a new focused sales structure gave EverView its highest sales year. Seventy percent of reps met quota, and 20 percent met 90 percent.

Blackthorn

Blackthorn relied on Salesforce formulas to calculate commissions. 

As the sales organization expanded to include sales development, customer success, and partnership teams, the commission structures became too complex for Salesforce formula capabilities.

Blackthorn was fully onboarded with QuotaPath in less than two weeks. They reduced new quota implementation time by  5 to 10 fewer hours and recorded three months of record-breaking sales following implementation.

International Support

Wazoku streamlines international commissions and measures team attainment for revenue teams across continents with QuotaPath.

Read More

How to Choose the Right Commission Software for Your Business

The global sales compensation software sector is expected to triple its 2022 value by 2033. 

Despite the growing number of competitors in the marketplace, selecting the best commission software for your business doesn’t need to be overwhelming if you know what to consider during the selection process.

Here’s what to focus on as you choose the best commission software for your organization.

Sales commission reporting

Your solution should generate executive- and rep-level revenue forecasting and quota attainment reports. Select a platform that automatically creates accurate estimates based on CRM data so leadership can see their sales team’s projections.

Compensation plan modeling

When it’s time to adjust your existing plans or create a new one, your platform should allow you to outline a plan proposal and test it with prior sales data. 

Plan effectiveness tracking

Adjusting incentive plans in response to their effectiveness and market conditions is common. To gauge a compensation plan’s success, select a tool that facilitates compensation plan performance monitoring. Such a platform shows you how well your team is doing and displays sales performance metrics like total earnings, average effective rate, and plan attainment by rep.

ASC-606 compliant

Your chosen incentive management platform should allow your accounting team to track audit trails and recognize commission expenses to simplify compliance with the new ASC 606 regulations.

Easy support access

Partner with a vendor that is easy to contact after you sign up. 

Look for a short response time and continual customer support services for adding and designing new plans, adjusting comp plans, or running payouts.

Rep motivation

Find a solution that Finance, RevOps, and your Reps will enjoy using. The platform you select should have a user-friendly interface that’s easy to navigate. It needs to enable reps to understand their comp plans with reporting and dashboards that allow them to view goals, accelerators, and bonuses and track progress toward milestone attainment.

In-app communication

Team collaboration features in your chosen solution help streamline the commission discrepancy dispute resolution process. For instance, seek features that allow reps to escalate disputes through the platform, where Finance and Accounting can quickly respond.

Select the Best Sales Compensation Calculation Software

Increasingly complex compensation structures, revenue performance focus, and remote work have created the need for sales compensation tools. Selecting the best commission-tracking solution is essential for driving sales performance and fair, transparent, timely, and accurate payouts.

The benefits of commission software include accuracy, efficiency, earnings transparency, motivation, and cost savings.

Compared with key competitors, QuotaPath is easy to use and update, with transparent and low professional service fees. We offer free native, real-time integrations, a free trial, quick implementation, and superior dedicated support.

QuotaPath differs from competitors, with multiple native CRM integration options, compensation plan modeling, visible pricing, and short implementation times.

As you move through the commission software selection process, look for:

• Easy and accessible sales compensation reporting
• Compensation plan modeling and testing capabilities
• Plan effectiveness tracking
• ASC-606 compliance capabilities
• Easy support access
• A platform your reps will use and enjoy
• In-app team collaboration features

QuotaPath meets all these criteria and more, making us the superior choice.

Find out why QuotaPath is the best choice. Explore QuotaPath with a free trial or schedule time with a team member today.

Chief Operating Officer Sarah Counts took over Wazoku’s QuotaPath implementation with HubSpot in Spring 2022. With “truly excellent support” from QuotaPath’s customer experience team, Sarah and her team built Wazoku’s 13 comp plans, led training sessions, and quickly grew team-wide adoption above 75% in the following weeks.

Headquartered in London, Wazoku is an idea management platform. The AI-powered innovation solution enables collaborative idea generation so teams can transform a good suggestion into a well-executed, market-ready reality.

Improving Sales Performance Using Quota Path

A SaaS tale as old as time, Sarah wasn’t the person who purchased QuotaPath. Rather, she inherited QuotaPath from the prior CRO, who had delayed implementing it. 

But with a revenue team lacking confidence in how they earned commissions, Sarah and Wazoku’s new operations assistant, Dennis Estillero, took it upon themselves to partner with QuotaPath and bring understanding and transparency to compensation. 

With guidance from QuotaPath’s Customer Experience (CX) team, Dennis and Sarah restructured Wazoku’s comp plans for Q2 and wrapped onboarding for the entire team. 

Now, “We’re using QuotaPath pretty damn well,” said Sarah.

That’s not bad for a quick turnaround from “still-in-the-box” to nearly whole-team adoption in a matter of weeks. 

“I’ve also started using the Team functionality, which is helpful because one of our key results on the revenue team is that everyone is at 100% of quota,” Sarah said, adding that she separates views for her U.S. and U.K. teams to accommodate currencies. “With QuotaPath, I can use the Team pages to see where they are at their quotas and view the total team quota.”

And, despite managing to workspace within QuotaPath and currencies, Sarah’s commission process has grown increasingly more efficient. 

“I do our month-end process the first week of a new month, look at our earned commission report, and send it to the accounting team so they can spread the cost across our budget,” Sarah said. “Then, when it comes to run commissions, Dennis runs approvals, I check over it, and send one export to reconcile everything,” said Sarah.

Sync HubSpot and QuotaPath

Wazoku integrated HubSpot with QuotaPath for accurate data to calculate and forecast earnings and attainment.

Learn More

White Glove Support

However, Sarah credits much of their success with the platform due to the attention and care of QuotaPath’s CX team.

Sarah praised QuotaPath’s solution-oriented, white-glove support for setting them up for success and offering guidance for Wazoku’s cross-Atlantic locations.

“The level of support was excellent,” Sarah said. “By comparison, we signed up for a new billing platform while onboarding with QuotaPath. Dennis and Lucy on my team were on back-to-back calls with the billing platform and QuotaPath. When we got off that call with the other company, we were like, ‘Oh my god. The difference is black and white.’”

“We’d walk away with solutions. Truly excellent support,” Sarah added. 

Sarah also enlisted the help of QuotaPath Chief of Staff Graham Collins, who runs compensation consultation calls, to design simple, logical, and fair comp plans for Wazoku’s 13 compensation structures.

“Graham had some excellent, creative ways to design a plan,” Sarah said.  “In the end, we designed a different one than what we showed him, but the new one was very similar to what he included. He gave me good insight into the right things to incentivize and pointed us to QuotaPath’s calculator resources to help.”

Scalable, User-Friendly

With a new taste of automated commissions, Sarah is unlikely to return to spreadsheets. 

“Spreadsheets are not scalable. There’s no platform. No system of record with different levels of access,” Sarah said. “We want people to see their projected earnings, we want to make it competitive, and we want to make it really easy to compare our recognized or earned commissions to what we’re paying out.”

Plus, it’s making Sarah’s job more manageable.  

“QuotaPath has made my job way easier,” Sarah said. “It’s made things more transparent, and our comp plans are way more organized. It’s a much quicker process.”

It doesn’t hurt that she’s a fan of the QuotaPath team, either.

“You take good care of your people. You’ve helped me be successful without trying to penny-pinch, so I have more brand loyalty,” Sarah said. “If I were going to another business, I would explore QuotaPath just knowing I’ve worked with you and how you treat your customers.”

Conclusion

Wazoku built 13 new compensation plans, trained and onboarded their team, and quickly grew team-wide adoption to above 75% in the following weeks with QuotaPath’s support.

Through QuotaPath’s Team pages, Sarah and her team can track individual progress toward their 100% quota attainment target while streamlining compensation management for two continents and currencies.

When asked if they could ever return to spreadsheets, Sarah said, “Our CFO is a whiz with Excel. He can do it all. The problem is that spreadsheets are not scalable. If he got sick or something happened, then what? There’s no platform. No system of record with different levels of access.

QuotaPath has made my job way easier. It’s made things more transparent, and our comp plans are way more organized. It’s a much quicker process. I would not return to a spreadsheet now that we have this.” 

To learn more, schedule time with our team. 

According to Spotio, a staggering 79% of sales executives agree that the key to achieving key targets lies in one crucial factor: improving sales team productivity.

This statistic underscores the importance of efficiency within sales teams and its significant impact on an organization’s bottom line. However, despite acknowledging its importance, many teams and reps still need help maintaining optimal productivity.

Why such a struggle? 

Too many tools or processes sometimes hinder work efficiency, causing bottlenecks and frustrations. Additionally, poor communication and collaboration within the team can result in misaligned goals and duplication of work, further impeding productivity.

Moreover, distractions and time management issues, such as excessive meetings or administrative tasks, can divert attention from core sales activities. Burnout too, and lack of motivation among reps can also dampen productivity levels, affecting overall performance.

Fortunately, organizations can take several steps to address these productivity challenges. 

Implementing streamlined processes and providing reps with the right tools, such as sales performance and compensation platforms like QuotaPath, can significantly enhance efficiency and effectiveness. 

Plus, encouraging open communication and fostering a collaborative team environment help align goals and reduce inefficiencies.

This blog explores strategies and tools like QuotaPath that can help businesses achieve their revenue goals. Join us as we uncover the key insights and tactics to drive sales team productivity to new heights.

Introduction to QuotaPath

While increasing sales team productivity may not be the initial reason someone buys QuotaPath, it’s undoubtedly one of its most significant benefits.

QuotaPath, a leading sales compensation management platform, offers a comprehensive solution to streamline sales and revenue operations, optimize team performance, and drive revenue growth.

Usually, a buyer first comes to us because they have recognized that they’re spending an exorbitant amount of time manually calculating sales commissions or using an outdated system — both of which lead to inefficiencies, errors, and missed opportunities to align your team. 

This is where QuotaPath offers a modern, innovative, and intuitive platform that empowers sales teams to perform at their best.

QuotaPath’s robust features and capabilities address revenue organizations’ complex challenges and equip teams with the tools to succeed, from automating commission calculations and payouts to providing real-time visibility into performance metrics. 

By streamlining processes, eliminating manual tasks, and providing actionable insights, QuotaPath enables leaders and sales reps to focus more time and energy on driving revenue and less time on administrative tasks.

Learn about our integrations and trust the data is correct. 

Moreover, QuotaPath’s user-friendly interface and customizable dashboards make it easy for sales leaders to track progress, monitor performance, and make data-driven decisions. 

With QuotaPath, sales teams can gain a deeper understanding of their compensation plans, identify areas for improvement, and optimize their sales strategies for maximum impact to drive team productivity and optimize costs. 

Setting Up QuotaPath for Productivity

Setting up QuotaPath for productivity is essential for maximizing the efficiency and effectiveness of your sales team. By integrating with your CRM, providing forecasting capabilities, and offering clear visibility into earnings, QuotaPath empowers reps to focus on selling and achieve their goals.

Additionally, in-app collaboration, automated commission tracking, and optimized comp plans further contribute to a streamlined sales process that drives productivity. 

Integrations promote CRM hygiene: Integrating QuotaPath with your CRM encourages better CRM hygiene, ultimately increasing productivity. Reps can efficiently access the information they need without wasting time on data cleanup by ensuring that your CRM data is accurate and up-to-date.

HubSpot Names QuotaPath Essential Sales App

QuotaPath, HubSpot’s most-installed sales compensation tool on the HubSpot marketplace was named one of 20 Essential Apps for Sales.

Read More

Forecasting empowers reps: With QuotaPath’s forecasting feature, reps gain visibility into their potential earnings on upcoming deals. This insight allows them to prioritize their efforts and focus on deals yielding the best commission, thus maximizing their productivity. It also lets them to translate their pipeline into commissions. 

Clear overview of earning components: QuotaPath gives reps an overview of how they are paid and what deals earn the most commission, including SPIFs, accelerators, and more. This transparency motivates reps and enables them to make informed decisions about their sales strategies, while keeping them up-to-date with their progress toward goal. 

In-app collaboration for direct questions: The in-app collaboration feature allows reps to ask direct questions about their earnings, eliminating the need for back-and-forth communication via email or other channels. This streamlined communication enhances productivity by providing quick access to answers.

Automated commission tracking: Save reps hours each week that would otherwise be spent on manual calculations. This automation reduces frustration and demotivation, allowing reps to stay focused on selling.

Comp plan optimization: Build and measure comp plans in QuotaPath to promote productivity by incentivizing teams to focus on selling profitable deals. Additionally, provide leadership with insights into how reps are trending towards their goals, allowing for targeted coaching and support.

Increased productivity for sales leadership: Alleviate the burden on sales leadership by automating commission tracking and attainment monitoring. With these tasks taken care of, sales leaders can prioritize coaching efforts toward underperforming reps and quickly identify top performers, such as who is selling the most multi-year deals, leading in this quarter’s SPIF, selling the most upsells, etc. 

By leveraging QuotaPath’s features and functionalities, sales teams can streamline their workflows, gain valuable insights, and ultimately maximize productivity, leading to improved sales performance and business success.

Increase FInance and RevOps Team Productivity

In addition to boosting sales team productivity, QuotaPath’s tools and features enhance the productivity of Finance and RevOps teams. By automating backend processes, facilitating comp plan signatures, and enabling testing and modeling of future comp plan changes, QuotaPath streamlines operations and empowers Finance and RevOps professionals to work more efficiently.

Automate backend processes: QuotaPath automates commission calculations, scheduling payout eligibility, and other backend processes, saving finance and RevOps teams significant time and effort. By eliminating manual tasks, teams can focus on more strategic initiatives and reduce the risk of errors associated with manual data entry.

Rep signature on comp plans: QuotaPath allows reps to electronically sign comp plans, streamlining the approval process and ensuring compliance with company policies. This feature simplifies administrative tasks for finance and RevOps teams and reduces the need for manual paperwork and follow-up.

Testing and modeling comp plan changes: With QuotaPath’s testing and modeling capabilities, Finance and RevOps teams can simulate and evaluate potential changes to comp plans before implementation. This proactive approach enables teams to anticipate the impact of changes on earnings and performance metrics, allowing for informed decision-making and minimizing disruptions to operations.

Utilizing these capabilities enables finance and RevOps teams to streamline their workflows, enhance operational efficiency, and contribute significantly to the organization’s overall success.

QuotaPath Success Stories

Of course, don’t take our word for it. Let our customers speak for themselves.

“It was obvious that QuotaPath would have a manageable implementation and a more cost-efficient approach than CaptivateIQ. QuotaPath seemed more aligned with what we were looking to do by securely integrating our data with Salesforce over Spiff.” – Thomas Egbert, Head of Finance

“Our CFO is a whiz with Excel. He can do it all. The problem is that spreadsheets are not scalable. If he got sick or something happened, then what? There’s no platform. No system of record with different levels of access. We want people to see their projected earnings. We want to make it competitive. And we want to make it really easy to look at our recognized or earned commissions versus what we’re paying out. QuotaPath has made my job way easier. It’s made things more transparent, and our comp plans are way more organized. It’s a much quicker process. I would not go back to a spreadsheet now that we have this.” — Sarah Count, Chief Operating Officer 

“QuotaPath is great for increasing visibility and motivation. The direct integration with Salesforce key so that our team can see how changes to their forecast impact their compensation. The leaderboards are great too.”  — Stephen Young, CEO

“A major game-changer for me is the ease in which I can onboard a new team member. With our rapid growth, efficiency and accuracy here is a must,” Katie said. “Assigning a plan, quota, and rate in QuotaPath saves me about 30 minutes per employee.” — Katie Cooper, Sr. Business Manager, FP&A

Conclusion

In this guide, we explored how QuotaPath can maximize sales team productivity and enhance efficiency across your organization. From setting up QuotaPath for productivity to increasing finance and RevOps team productivity, we’ve delved into the features and functionalities that empower teams to achieve their goals and drive success. QuotaPath equips sales teams with the tools they need to thrive in today’s competitive landscape by automating processes, providing clear visibility into earnings, and facilitating collaboration.

Ultimately, maximizing sales team productivity with QuotaPath is not just about increasing sales numbers—it’s about empowering your teams to work smarter, not more complex, and achieve their full potential.

With QuotaPath, you can streamline compensation workflows, improve efficiency, and drive greater organizational success. Embracing the power of QuotaPath is not just an investment in software—it’s an investment in your business’s future growth and prosperity.

Your top sales performers are crucial to your organization’s success, yet retaining them is always tricky, with recruiters regularly slipping into their DMs.

That’s why leaders must continuously give their top reps opportunities for growth. However, that “growth” doesn’t necessarily mean a leadership role. Not every high-performing rep wishes to become a leader; in fact, if you ask them, you’ll find many are happy focusing on their pipelines and enjoying their commission checks.

Yet leaders routinely look to the top of their leaderboards, eager to pluck the highest rep for the next manager role. This dilemma, often rooted in the Peter Principle, presents a unique challenge for sales leaders. 

The Peter Principle, introduced in the 1960s by Dr. Laurence J. Peter, theorizes that employees earn promotions based on performance rather than their abilities relevant to the intended role. 

It’s an expensive mistake that companies tend to overlook. 

In 2018, the National Bureau of Economic Research published “The Peter Principle Isn’t Just Real, It’s Costly,” citing evidence from sales performance and promotion practices across 214 firms. The data indicates that managers promote high-performing sales reps more often than the reps’  peers.

Specifically, a rep outperforming their team by 2x is 14.3% more likely to be promoted. 

More alarming, doubling the new manager’s pre-promotion sales corresponded with a 7.5 percent decrease in the sales performance of each new manager’s subordinates. Translation: the higher the new manager’s sales performance before promotion, the lower the performance of their team members after they assumed the managerial role.

So, what can you do to engage your top-performing reps without dangling leadership opportunities they have no interest in? We connected with 8 sales professionals across Women In Sales, Pavilion, and more to offer insights and strategies to respect their decisions while leveraging their talents effectively within the organization.

What top-performing reps care about

• Money
• Autonomy
• Critical feedback
• Opportunities to share their successes
• Invite to strategy sessions

The first rule regarding your high performers is never to assume you know what they want. You can avoid this by… asking them. 

“Literally ask them what their goals are in life and then tie how being a successful individual contributor helps them achieve those goals,” said Lindsay Rios, advisor and fractional sales leader. “Make a plan to help them know exactly what they need to do. If it’s not financially tied, then give them a path to feel really still fulfilled as an IC.”

Engage them in open and honest conversations about their career aspirations, goals, and preferences over routine 1:1s. 

By soliciting their input and listening attentively to their feedback, you demonstrate respect for their desires and motivations, fostering a collaborative environment where they feel valued and understood. 

Here’s what some of our sales experts had to say.

Jessica Erven: Your top reps care about money and autonomy. That’s the only answer for people who don’t care about ladder climbing. This is assuming the culture is already good.

Rohan Bairat: At that level of performance, they are not looking for praise; they are looking for new learning, training, and critical feedback. That’s how you motivate them. I brought in a lot of expertise in pricing, technology, and external coaching for these reps.

Dounia Gassa: In my experience leading/coaching high-performing tenured teams, I had several top-performing global ICs who didn’t want to go into leadership. Instead, here’s what they liked and what made them stay for over 5 years: they thrived on being on stage, not just for getting rewards, but for being the bright spot and sharing their wisdom/learnings with the broader sales audience/leadership. 

Alex Gold: Money is always the driver. You go into software sales for money. But I would have really liked to be more involved in the decision-making, having an invite to the C-Suite table, and understanding and contributing to the “why.” 

Is it time to churn a customer?

5 RevOps and Sales leaders share when and how they’ve intentionally churned a customer.

Read More

How Sales Leaders Can Support High Performers

• Invite them to contribute to team meetings to share wins/losses
• Provide alternative leadership opportunities to lead projects temporarily 
• Involve top performers in company initiatives
• Come with a partnership mentality
• Elevate their position

De’Andreya Searight: Focus on fostering a supportive team environment. Encourage participation in daily sharing sessions where everyone can discuss wins and challenges. 

Leaders can also provide top performers with opportunities to take on leadership responsibilities by temporarily assigning them to lead projects or initiatives. This allows them to showcase their skills while gaining valuable leadership experience. 

Furthermore, leaders can involve top performers in company initiatives that offer select individuals the chance to be the first to hear about changes or updates, empowering them to disseminate this information to the team. This recognizes their contributions, builds trust, and reinforces their sense of responsibility within the team.

Rohan Bairat: I’ve consistently overseen teams with reps who had 15-20 years of sales experience and flawless records of achieving quota. As a leader, you must bring a partnership mentality to these reps. Ask questions versus providing responses and solutions. If they need something, they will come to you. Rely on their insights, leverage their expertise, and give them a seat equivalent to yours at pipeline calls or quarterly business reviews. Ask them how they move the ball forward in their deals versus you telling them how to. 

You can also elevate their position by having them share a story of their deal at company-wide events (like a Sales Kickoff) and asking them to represent Sales at town hall panels.  

Lindsay Rios: Tap on them for the projects that you know they would be the best for — and not just any and every project that pops up.

What Sales Leaders Should Do Differently

• Clear communication on what leadership means within an org.
• Avoid associating reps who don’t want to pursue leadership roles as having a “lack of ambition” 
• Offer assistance in identifying resources to help them achieve goals
• Ask your reps, “How can I help?” 
• Resist telling them what needs to be done
• Over process
• If they don’t want to take on extra projects, find other ways to recognize them

Dimitra Spiliotopoulou: Provide better education on what leadership means within their organization. 

Managing a team doesn’t automatically qualify you as a leader. And, equally, it does not mean a lack of ambition among the individual contributors. Leading can imply you take a step back in active selling. Some of us love the feeling of hunting and closing!

Derek Puerta: Show some emotional intelligence; ask me how you can help me continue succeeding at my role or help me transition into what I may want to do. Stop making my move to leadership about you or what you’re being told is best for the company’s bottom dollar. 

De’Andreya Searight: Focus on their personal and professional growth while respecting their preferences. Biannually, engage with each team member to discuss their individual goals, both personal and professional. Offer assistance in identifying company or community resources to help them achieve these goals. By making them feel individualized and in control of their goal-setting, you act as a catalyst to support their development without imposing specific career paths.

Rohan Bairat: Often, people hire great reps and then almost tell them what needs to be done. This is the worst thing to do. At a previous organization I worked for, the CEO notoriously inserted their authority into deal calls and almost questioned the rep on every angle. 

The other thing – killing the reps by the process. Process is really important in many scenarios. But if someone is producing 3x-4x, they got their formula figured out. You don’t need to watch or ask them to record every meeting call. 

Lindsay Rios: If they don’t want to take on extra projects, then recognize them for things they do well that are more qualitative than quantitative

Sales Compensation Calculator

Calculate OTEs, sales quotas, and commission rates to design your sales compensation plans.

Try for Free

Conclusion

In conclusion, effectively engaging and supporting top-performing sales representatives who choose not to pursue leadership roles is crucial for maintaining a high-performing sales team. 

Our experts have provided valuable insights into understanding the motivations of these reps and offering them opportunities for growth and recognition within the organization. 

By soliciting their input, providing alternative leadership opportunities, and fostering a supportive team environment, sales leaders can leverage the talents of their top performers effectively while respecting their career preferences. 

Clear communication, emotional intelligence, and personalized support are key to maximizing the contributions of these valuable team members and driving overall sales team success.

And, of course, don’t forget to incentivize them with compensation plans that reward over-performance and pay them competitively and fairly. Bonus points if you also give them a platform like QuotaPath to track their earnings and attainment progress and drive revenue. 

Learn more today. 

RevOps is pivotal in aligning sales, marketing, and customer success teams to maximize revenue generation and operational efficiency. However, many organizations struggle with launching RevOps internally and often require external expertise to navigate this complex field effectively.

Enter RevOps agencies. 

These agencies, sometimes called fractional RevOps teams, offer services that align sales, marketing, and customer success departments to optimize revenue generation processes. Their knowledge and focus areas include technology implementation, data analysis, process optimization, and strategy development to help businesses improve their overall revenue performance.

And, as the RevOps market continues upward, the number of RevOps agencies and consulting groups is keeping pace. As such, making informed decisions is essential when choosing the right agency for your company’s success. 

The relationship between a business and a RevOps agency is a two-way street, like any partnership, requiring the active participation of both parties. 

During selection, it’s crucial to consider the agency’s specific expertise regarding the goals you want them to help you achieve.

To learn more about when and how to hire a RevOps agency, we interviewed Joe Birkedale, the founder and CEO of Project36. This purpose-driven, strategic RevOps agency delivers transformational projects for global sales and marketing teams using HubSpot and Generative AI. They help RevOps leaders exceed revenue targets through efficiency, innovation, and alignment.

This interview aims to shed light on the dynamics of agency-client relationships, the evolving landscape, and the critical factors to consider when partnering with an agency. 

Enjoy!

Q&A with Joe Birkedale | Project36

QuotaPath: Joe, thank you for joining us today. Tell us more about your background and Project36.

Joe: For the last 18 years, I have helped companies position their products and services exactly as their prospects need to see them. I’ve helped them nurture their customers to make the right choice.

In 2016, I set the wheels in motion to create a genuinely disruptive agency with people and technology at its core. Over the following two years, I built the software stack, the sales proposition, and the brand. Today, Project356 serves clients from all sectors globally with a full-service remit.

My role as CMO is to ensure our creative team, strategists, and account directors achieve and maintain peak performance in their given specialty. Additionally, some businesses hire me as a fractional CMO.

What business types, sizes, and industries do you work with the most?

Joe: We have a clear ideal customer profile (ICP) of Series A or above funded. They’ve got to have a product in the market and investor pressure to grow and expand. That’s our sweet spot. We help these clients systematize and create an effective revenue machine. The size and stage of the companies we support is a 50/50 split regarding client volume and value. Our startups tend to spend about the same as the enterprises because they’ve got to grow as enterprises need to systemize, check, and balance what they’re currently doing aggressively.

 We work globally—with the only limit being that they speak English.

When is the right time for a company to work with an agency?

Joe: Everybody comes to us with an urgent demand, but that’s slightly too late. We are an agency that adds value. You extract that value by telling us what’s going on before it has happened and what you want to achieve. Then we can shape our response, strategize, and deliver accordingly. So, bring us in earlier from a thinking point of view, and we can jump on things immediately.

“You extract that value by telling us what’s going on before it has happened and what you want to achieve. Then we can shape our response, strategize, and deliver accordingly.”

Can you provide an example of an exemplary client scenario where they came to you before the problem was too hot?

Joe: Seven months ago, a client came to us with a legacy CRM no longer fit for purpose. It did everything for them, including all their client contact and interaction and audit history as it synced to their accounts program.

They heard about HubSpot and reached out to us to find out if it would be a fit for them. We went in and effectively mapped their current setup, how it works, and the limitations. Then, we presented a better solution that included HubSpot, a migration, setup, and a training plan.

That has been fundamental to their business, adding $4.5 million net new opportunities to the pipeline, which they have begun closing in the last two months since they’ve gone live.

This relationship is strong because it’s a two-way respectful relationship where they are the product experts of what they do, and we listen to that verbatim.

 Likewise, we’ve got their trust, and that makes a massive difference.

Free Sales Commission Calculator Template

A free spreadsheet to simplify the commission tracking process. Track what you or your team have earned in 4 inputs.

Download Now

What should I look for when evaluating an agency?

Joe: A partner agency should be certified and tiered and provide customized HubSpot onboarding unique to you. It should include proper pipeline management, customization of fields to match your lifecycle stages, and training on how to use all of it. There are two benefits to this:

1. The HubSpot product gets properly adopted and absorbed into the company, becoming the system of record.

2. If the implementation period is quick, well done, and delivered on budget, then that opens the door to do more with the agency, such as content marketing, inbound marketing, account-based marketing (ABM), advertising, pay-per-click, and SEO.

So, the implementation is where you’ll get a good feel for the agency.

Is there anything you’d like to add about evaluating agencies in terms of having access to the team?

Joe: International clients need to consider the impact of any time difference with an agency so they aren’t left eight hours behind. For example, we can “race the sun.” If a job comes out of the East Coast, we can send it West and get it done by the time the client wakes up.

You should have direct access to the agency team through a centralized communication platform. This keeps communication clean by eliminating the back-and-forth of email and the risk of requests or input being lost in the shuffle. 

For instance, we have an internal project management platform to enable two-way live communication with our clients. They can log in anywhere in the world at any time to see the status of any task and comment directly on it. They can also add a task, review the tasks, see the status, get an update, see the artwork, and review the latest revision, and nothing gets lost because it’s all on a live dashboard.

Another thing to remember is how the agency handles unused time on a retainer. For example, we offer rollover on our retainer. If the client doesn’t use time, it can roll over into the next period, so they don’t lose it. We can also adjust the retainer accordingly.

How should companies identify what to lean on an agency for?

Joe: Agencies help accelerate the learning curve and can supplement the capacity of internal teams. For instance, internal teams can learn HubSpot, but it takes months of trial and error. This costs the company time and salary during the learning period.

Plus, the internal team already has its day job. Something has to give when a new campaign comes along and adds to the existing day job. This adds pressure on the internal teams, and people leave when they get fed up because they’re constantly getting dumped on. An agency can take up the overflow and alleviate this pressure. The experience and capacity of an agency mean that more gets done in a shorter period.

“An agency can take up the overflow and alleviate this pressure. The experience and capacity of an agency mean that more gets done in a shorter period.”

What other things stand out to you regarding a healthy agency partnership between a client and agency?

Joe: Mutual respect is essential in valuing the agency’s input and vice versa. Everybody’s an equal and brings their expertise. This also means respecting each other’s time.

 For example, just because something’s urgent for the client doesn’t mean it should be urgent for the agency. The client needs to do their part too. If the client is disorganized and not doing their part of a project, the agency will help where they can, but there will come a point where they won’t want to work with that client.

Is it time to hire a RevOps agency?

Thanks for sharing these insights about partnering with a RevOps agency, Joe!

According to Joe:

• Engaging with an agency is best before you have an urgent request.
• Agencies bring expertise, experience, and additional bandwidth to accelerate revenue goal attainment.
• An agency and client partnership is a two-way street where parties are accountable and respect one another’s expertise.
• When selecting an agency, identify what you want the agency to help you achieve, then choose one best suited to help you reach your goal.
• Consider geographic time differences and communications when selecting an agency.

RevOps can be complex to implement. Is it time for you to hire a RevOps agency to help accelerate the attainment of your revenue goals?

Contact Project36 to discuss your upcoming RevOps needs.

QuotaPath supports revenue leaders with resources and solutions that automate sales commissions, provide past, present, and future visibility into compensation performance, and drive revenue.

Chat with our team, or try QuotaPath by signing up for a free trial to learn more.

As much as we want to mark every opportunity as “closed/won” and retain every customer, sometimes it makes more sense to cut ties than to overextend your team’s resources, workloads, and patience.

“There are no ‘bad’ customers, but there are some that are simply not a good fit,” said Susan Collins, SVP of Strategy at P360.  

When that happens, it’s essential to recognize the value of setting boundaries and prioritizing allocating resources where they will yield the greatest return. While parting ways with a customer may initially seem daunting, it can ultimately free up time and energy to focus on serving clients who align more closely with your organization’s objectives and values. 

By clearly understanding your ideal customer profile and proactively managing client relationships, you can ensure that your team operates efficiently and effectively while delivering exceptional service to those who matter most.

Below, we connected with five Sales and RevOps leaders from Women in Sales and RevOps Co-op to learn when they’ve intentionally churned customers and prospects and how they did so tactfully.  

Susan Collins, SVP of Strategy, P360

When it’s time to churn: Cost of service > revenue

Susan: The obvious metrics are customers for whom the cost of service is higher than our revenue/we have a negative LTV for that business, and there are no offsetting advantages that make up for the shortfall.

I might tolerate thin or even negative margins for a customer that provides great references, a big (referenceable) logo, co-development expertise, or intros to a desirable market segment that I otherwise would struggle to access.   

In those cases, the LTV would encompass more than just that single revenue stream.  

However, without those other factors, we either re-negotiate or decline to renew the business.   (VERY important IMO to offboard them professionally; there is no point in creating negative noise.).  

Other times to consider proactively churning a customer:

• Planning to exit a market due to regulatory reasons or data suggests there’s not enough business there to warrant the investment
• “Customers who are abusive to our team. I don’t tolerate that for any amount of money,” said Susan.

“Customers who are abusive to our team. I don’t tolerate that for any amount of money.”

Best practices when saying goodbye

Susan: If the numbers don’t work, we understand, and we will bend over backward to ensure we support them as they look for alternatives.  

This could include: 

• providing a file of historical data
•  making introductions to other service providers,
• Thanking them for their business and wishing them well.   

If it is a case of exiting geography or something along those lines, we have notification clauses in our contracts for nonrenewals, and we follow those constructs.  

For the (very few) customers who are abusive, I expect to speak personally to their leadership and explain that we only maintain business relationships that are conducted professionally and in accordance with our terms of service.  

Our contracts are quite clear about violations of our TOS resulting in a loss of service. 

The response might be shock and assurances that they would not tolerate abusive behavior either, in which case we might extend a “second chance” (obviously with different representatives from their organization). 

Amber Milks, Co-Founder and COO, BILLIONS

When Amber churned a customer: Customization demands

Amber: We had a contentious scenario at a former company when we onboarded a small customer into a very big enterprise product. This happened before I arrived, and the team had to custom-build the product for them. It was constant, and it would never be a good fit. 

They told the customer that we can’t continue supporting their customization needs. You can find someone who can, or we can decide to cut ties. 

This was hard because this sector was an area our company was testing the water to get into. But, the company wasn’t prepared to handle the customer, and they had to tell the customer that. 

At the end of the day, you have to explain to the customer, “Do you want to keep paying for something that’s not worth your time and money?” Ultimately, they’ll agree to part ways. And that’s when you allow early terminations without cancellation fees. 

Other times to consider proactively churning a customer:

• Customer at renewal says they’re going to a competitor and asking for a discount. “Let them churn!” said Amber. “You shouldn’t be the favored tool just because you’re cheaper.”
• If it’s a feature you’re never going to have. “If you’re coming to me and asking for one must-have that we don’t have, and there’s another tool that does have it, be honest upfront,” Amber said. 

If they leave you, let them leave you in the best way possible.

Best practices when cutting ties

Amber: If you’re trying to fight with your customer about cancellation nonsense, it will cost you more in manpower than to let them cancel. It’s not worth the fight. Let them churn. Eat the cost, and move on. You’ll spend more cycles fighting, collecting on it, and then compromising your company’s reputation.

Choose your battles. If they leave you, let them leave you in the best way possible. 

Ashleigh Early, CEO, Other Side of Sales Consulting

When Ashleigh churned a customer: Lack of usage/not solving problem they had

Ashleigh: I worked with a client for six months who declined to renew their client for two reasons. First, their client was not using the product regularly, and second, they weren’t using it because it wasn’t solving their problem. 

They approached it from an ethical standpoint: do the right thing. They didn’t think it was fair to continue taking money for a product they wouldn’t use. 

Additionally, my client was concerned about product reputation. They didn’t want metrics built on someone not using the product properly or forcing it to do something it couldn’t do.

So, they let them out of a 3-year contract and let them buy it out for a reasonable amount.

It hurt… but it didn’t hurt hurt. 

Other times to consider proactively churning a customer/prospects:

• Client outgrows you. “I churned a client because I’m too expensive for them. It was a mutual decision. ‘You have a solid sales process, solid sales reps, you do not need to keep paying me to tell you you’re doing a good job,” Ashleigh said. 
• Cutting ties with prospects due to misogynist and racist language. “The customer is not always right; sometimes the customer is a jerk, and if that’s the case, protect your team because you’ll protect your customers, and that protects the bottom line.” 

The customer is not always right; sometimes the customer is a jerk, and if that’s the case, protect your team because you’ll protect your customers, and that protects the bottom line.

Best practices when cutting ties:

Ashleigh: Start with an honest conversation, transparency, and communicating intent. There have to be conversations about what’s working and what’s not. This should be evidence-based, not ‘it feels like’ or ‘it seems like.’ Instead, ‘here is exactly what we are seeing.’

A classic negotiation tactic is to come up with three options. I don’t find that very collaborative. Ask them, ‘What does success look like to you? What’s your ideal outcome?’ You’ve got your three ideas in the background, but then you meld those to create an exit deal.

You know you’ve done a churn correctly when the churned customer will still refer you to do business. 

Christian Freese, Founder, RevPal

When Christian churned a client: 3rd customer woes

Christian: I provide RevOps as a service or fractional RevOps to teams, primarily in the SaaS industry. My third customer, because I was so new — and I think many startups feel this way — we want the customer, and we’ll figure out the rest later.

So, I focus on CRMs like HubSpot, Salesforce, and best-of-class solutions. But this customer was on an outdated platform… it was terrible. I knew this. I looked at YouTube videos and tutorials, and after figuring it out a bit, I realized it was very similar to Salesforce. We can figure it out. 

But — we did not figure it out. A lot of the solutions I prescribed would not work with their setup. So, there are two routes I could have taken. 

I could have kept working and provided a half-assed solution and risked a little black mark on my reputation or lost a potential reference down the line. Instead, I began documenting why we couldn’t do X, Y, and Z. Then, over our 1:1, I prepped them and asked for a full hour versus 30 minutes. And, I laid everything out to them. 

He appreciated it, and to this day, he refers people my way. 

Ways to avoid intentionally churning customers:

• Preach fit in discovery calls
• Have a checklist for you and your reps: “It should include ‘this is what to look for,’ ‘this is how we qualify them,’ and ‘if they don’t qualify, how to communicate this and how to refer them to someone who can help them,’” Christian said.
• Identify commonalities across customers and prospects you’ve churned over the past quarter

Lindsay Rios, Advisor, Fractional Leadership

When Lindsay churned a customer: Using product differently than intended

Lindsay: At a previous organization, as Head of CS, I had my first renewal coming up, and it was a really big logo. One that everyone knows. But they never really used our product for what it was meant for. At the time, we didn’t care. But as the company was gearing up for our Series A round, we needed testimonials.

The founder asked them if they’d be open to it, and the customer replied, ‘You probably don’t want our testimonial.’

So when I stepped in, I asked for the lowdown. Why are they so snarky?

It turns out there was a product bug that allowed anyone who logged in to get a single-sign-on (SSO). There were hundreds of people who had SSO and joined our platform as users. At this time, we sold this by seat at $100/seat. And they had about 300 people logging in.

Moreover, our product is specific to product teams, primarily designers and a few developers — not hundreds of people typically. They were using it for documentation, almost like a Notion. And they had a lot of feedback that was not based on what our product was intended to be used for.  So, when the renewal time came, I laid it out. If you want to continue using us for what you do, that’s fine. You need to pay for the users using it and understand that the feedback your team is providing us, like that our product doesn’t work very well, is because you’re not using it how it’s supposed to be used. 

They didn’t churn that year, and we got them to pay more than double the previous year. But for the next renewal, I said that I don’t think we should let them renew, but we need to make it their idea. And we did.

Other times to consider proactively churning a customer/prospects:

• Disrespectful contacts

Be absolutely truthful. Tell them the truth! And be professional no matter what.

Best practices when having to churn a customer: 

Lindsay:  Be absolutely truthful. Tell them the truth! And be professional no matter what. I think there will be a lot of scenarios – maybe someone who got your blood boiling – you have to kill them with kindness. It will always go better, even if they are irate. If it comes back around, at least you know you composed yourself and the company in the greatest way possible.

Lastly, stand your ground. Don’t backpedal. Make your decision internally with your team. 

Conclusion

So, there you have it. Some customers are not in your best interest to keep. Prospects too.

However, that doesn’t mean just to send them on their way. These five leaders each emphasized the importance of communicating clearly and honestly, collaborating with clients on the best exit paths, and ending things amicably. Just because they aren’t a good fit now, doesn’t mean they won’t in the future. 

For more RevOps best practices, scroll down below to subscribe to our newsletter.

Creating a sales compensation plan requires careful consideration of various factors. These include Go-To-Market team size, average deal value, selling motion, sales complexity, team member role, and pricing model — all of which may change throughout the year. 

Tailoring your plan to your current situation is crucial rather than simply copying a previous one.

Therefore, creating a sales compensation plan each year and adjusting as factors evolve is essential. Otherwise, you risk misaligning your organizational goals, potentially causing you to fall short of targets.

With so many elements to consider and so much at stake, it’s unsurprising that 100% of surveyed business leaders admitted to having challenges with the compensation plan design process.

Sound familiar? If so, we’re here to help. 

In this blog, we will guide readers through building a compensation plan. Let’s get started.

How to Structure Sales Compensation

There are many sales commission structures to choose from that define the rule for the commission aspect of the compensation plan.

Some popular use cases include:

Base salary plus commission

The most common commission structure type across SaaS combines a base salary with a commission plan. We recommend a 50/50 split, where 50% of a salesperson’s pay comes from their base salary while the other half consists of sales earnings. Some organizations adopt a 60/40 ratio, with 60% of earnings from base salary and the remaining 40% from variable pay.

Tiered sales commission

Another popular option is a tiered sales commission structure, also known as a multiple rate, escalators, accelerators, or multipliers. 

This is an effective way to incentivize top performers. This structure designates that reps unlock higher commission rates as they attain specific deal or revenue benchmarks.

A tiered sales commission structure example may include a 7% commission rate on deals up to $85K in bookings. Once they’ve exceeded $85K, the rep then begins earning 9% on all new deals within the same period. 

Single-rate sales commission

A single-rate sales commission structure is also known as flat-rate commissions, fixed-rate commissions, or simply commissions. We define this structure as variable pay earned off a fixed percentage from every deal closed. In case you’re wondering, the standard commission rate in SaaS is 10%.

Commission payout structure best practices

Once you have chosen a commission structure, follow these compensation planning best practices to tailor it to your business so it will motivate your reps and drive your business goals.

• Make it a team effort: The best commission structures are created collaboratively with revenue operations, finance, and sales reps to build alignment with business goals.
• Keep it simple: Your commission structure needs to be easily explained. If it’s overly complex reps will struggle to understand it and find it difficult to follow.
• Incentivize the right behaviors: Reward behaviors that align with company goals and drive their achievement with goal-oriented compensation.
• Make it fair and equitable: Increase sales compensation equity by standardizing your sales compensation plans for everyone with the same role and then evenly distributing territory.
• Use a clear compensation communication plan: This ensures your team understands the plan, its reasoning, and how you support reps under the new plan.
• Test it: You can run historical compensation data through your new commission structure. Then test it for extreme situations, such as if a rep attained 400% quota. Pressure testing can prevent you from paying a rep more than 100% of their annual recurring revenue.

Test & Model Comp Plans

Next time you’re considering changes to your comp plan, use QuotaPath’s plan performance modeling and testing tools to see total costs based on historical data and quota attainment predictions.

Learn More

Steps in Designing a Compensation Plan

Next, you’re ready to begin designing your compensation plan.

1. Define your company objectives: Target one or two business goals that incentivizing behaviors can achieve. A company objective might be to increase new business or net revenue retention.
   
2. Review the role for whom the comp plan is for: Consider the role’s responsibilities, how their job supports the company objectives, and what you can incentivize that is in their control. For instance, customer success (CS) reps can control license allocation, active users, and new dollar retention. Therefore, the most effective incentives for CS will be tied to these elements.
   
3. Defining your sales compensation objectives: Identify sales compensation levers that can be incorporated into each role’s comp plan and align to company objectives. For example, to promote gross revenue retention, offer AEs a higher commission rate on ideal customer profile (ICP) deals that are more likely to renew.
   
   This can be challenging because Sales, RevOps, and Finance collaborate on comp plans. Our survey revealed that 49% of RevOps leaders felt their plans weren’t fully aligned with business goals despite 64% of Finance leaders declaring alignment. This is caused by Finance having the final say on what’s included in plans. 
   
   Recommended Reading: RevOps and Finance Alignment: Enhancing Sales Performance
   
4. Set your budget: Determine how much you can allocate for compensation, considering cost-effectiveness and market competitiveness. Remember that budget constraints can influence your compensation mix.
   
5. Choose your compensation mix: This is the blend of different pay elements you’ll offer. Standard options include:

• Base salary: Provides stability and security through predictable earnings.
• Commissions: Rewards performance based on sales attainment. Set your commission rates including standard, decelerated rate for underperformance, and accelerated rate for overperformance.
• Bonuses: Incentivize achieving specific goals beyond quotas.
• Profit sharing: aligns team success with company profitability.
  

6. Establish payout frequency: Determining the right payout schedule for your business involves various factors. You need to establish a frequency that will help you attract and retain top talent while managing cash flow and covering operational expenses. For example, compensation can be paid monthly, quarterly, annually, or based on milestones. An important consideration here is the motivational impact of each frequency and its alignment with your sales cycle.
   
7. Design your commission structure: The sales commission structure defines rules for what, when, and how reps earn commission from sales. An effective sales commission structure aligns with the results you strive to achieve. Consider using a flat rate, tiered commissions, accelerators, or another model to motivate your reps. Then tailor the structure to your business goals. Overly complex plans can cause reps to miss quota. After all, if salespeople can’t understand how they earn commissions, the plan won’t motivate them. So, align it with sales performance metrics and make sure the complexity balances clarity and motivation.
   
8. Define quotas and performance metrics: Set clear and attainable quotas aligning with your objectives. Use the QuotaPath Quota:OTE calculator to determine a quota for each role based on their total on-target earnings (OTE). Next, choose relevant performance metrics to track and measure achievement. Ensure quotas and metrics are fair and objective, avoiding bias or favoritism. Getting this wrong can lead to reps falling short of quota as our survey revealed that 91% of reps don’t hit their quota targets.
   
9. Implement tracking and reporting systems: Our survey showed it takes reps an average of 3 to 6 months to understand their compensation plan fully. Choose or develop tools to track performance, calculate payouts, and generate reports to streamline commissions for RevOps, Finance, and Sales teams. These tools ensure data accuracy and transparency in reporting systems while allowing reps to understand how they earn commissions more quickly and find it motivating. QuotaPath helps you ensure your team understands their comp plan by increasing transparency.  This platform allows reps to see how much they earn based on deals in their pipeline and forecast how much to expect in their paychecks.

Types Of Sales Compensation Plans

Each role requires a different type of sales compensation plan. This section outlines a few comp plan examples to demonstrate the differences.

(AE) Commission

An account executive is a type of sales rep. When creating an AE commission plan start simple and add complexity later as needed. A simple comp plan doesn’t always involve paying a flat rate commission. You can add accelerators/decelerators or a bonus or change the commission rate based on the length of the contract, for example.  It depends on the specifics of your company and what you’re hoping to achieve. 

Below, is a sample AE commission plan that an effective option.

Sample AE Commission Plan:

Quota: $160,000 of ARR per quarter

On-Target Earnings: $140k per year

Base Salary: $70k per year

On-Target Variable: $70k per year

Commission Structure: 11% commission on all ARR sold until quota is reached then 17% commission on all ARR above quota

Notes: This plan features a simple accelerator to encourage overperformance. The sales rep’s commission is flat until they achieve their quota. Once that quota is reached, the commission rate increases for all subsequent revenue. Because this commission rate doesn’t apply to the previous tier, they only get the higher rate on the revenue above their quota, not everything they sold that quarter.

CS compensation plan – Retention-based commission

This sales compensation plan example is for businesses that pay CSMs a commission for each renewed account. In this case, the CSM has a target retention number with an expectation of renewing a percentage of the contracts that they manage. 

For example: A customer success manager has a monthly retention quota of $33,000 ARR and earns a 10% commission of every deal they close

The details of this plan are as follows:

Retention-based commission with 1 Path to earnings

Quarterly net revenue quota of $300,000

Earnings rule:

0% – 100% = 7.5% commission rate

> 100% – 150% = 12.5% commission rate

> 150% = 15% commission rate

SDR compensation plan

An SDR, or sales development rep, is typically responsible for scheduling meetings for the sales team. This role is sometimes referred to as a MDR (market development rep), BDR (business development rep), or LDR (lead development rep). Regardless of their title, they manage the top of the funnel for a sales team by qualifying marketing leads, running outbound calls and emails, or holding discovery calls. The three plans below are the most common SDR comp plans.

• Number of meetings: This SDR compensation plan is often instituted by early organizations that want to fill their sales reps’ calendars. For each meeting the SDR sets (that actually takes place) they receive a bonus. This bonus varies based on the company’s ASP (average sales price) and demo-to-close rate. Generally, the bonus falls anywhere between $20 and $300. 
• Number of qualified opportunities: This SDR comp plan is most effective for organizations with a clearly defined ICP (ideal customer profile) that only wants sales reps on the phone with qualified prospects. It’s important to establish clearly defined rules as to what a qualified opportunity is so there is no confusion. This bonus also varies greatly by company but is typically a higher dollar figure than simply paying for demos. 
• Percentage of revenue generated: While many organizations believe this is the perfect SDR compensation plan, it is only the right choice for specific companies. Essentially, in this example comp plan, SDRs get paid a commission on all closed won deals that originated from the opportunity they created. This is only effective if you have a shorter sales cycle (ideally less than 60 days) because the SDR should have control over their income. The SDR commission percentage typically ranges from .5% to 4%. 

The most common SDR compensation plan is often a combination of 2 or more of these components. Below is an example of this. 

Sample SDR Compensation Plan:

Quota: 10 qualified opportunities per month and $60,000 of revenue per month

On-Target Earnings: $70k per year

Base Salary: $46k per year

On-Target Variable: $24k per year

Commission Structure: $100 per qualified opportunity and 1.66% of all deals they generate

Notes: There are two different quotas and therefore two different commission rules for this sample SDR plan. They are paid a flat $100 bonus for every qualified opportunity they generate and are expected to create 10 qualified opportunities per month. Their second target is to generate $60,000 of revenue per month and they are paid 1.66% of all revenue generated.

Sales Manager Compensation Plan

Sales managers are responsible for managing salespeople.

Unlike sales reps whose quotas are unique to themselves, sales managers’ quotas are usually based on the combined quotas of the reps reporting to them. Their quota is not always the total of their team’s quota. They are sometimes given a “buffer” of 10-20%. This means that if a sales manager has 5 reps reporting to them, each with a $150k quota, the manager’s quota is 90% of that sum. So, instead of $750k (5*$150k) it is $675k ($750k*90%).

Because the sales manager compensation plan sample is based on the deals their reps close, it enables them to spend their time coaching their sales team to close more deals. 

Sample Sales Manager Compensation Plan:

Quota: $945k per quarter (based on a team of 6 reps at a $175k/quarter quota, held to 90%)

On-Target Earnings: $200k per year

Base Salary: $100k per year

On-Target Variable: $100k per year

Commission Structure: 2.65% of all deals their reps close

Notes: This plan is a very straightforward plan, utilizing a single rate commission. That means that the manager earns the same amount on all deals their team closes, regardless of their team quota attainment. This type of plan is somewhat common because it is easy to understand, very simple to roll out, and allows additional complexity to be added in at a later date.

Sample Sales Compensation Plan Templates

Use our Compensation Plan Templates Library to build your first sales compensation plan or modify existing plans. You can auto-populate commission and bonus rates based on your business numbers, determine deals per quota period, and balance quota to OTE ratios.

Here are some popular templates and their use cases to help you get started:

• Single Rate Commission: A near-perfect plan for early-stage startups
• Commission with Accelerators & Milestone Bonus: Excellent plan to incentivize consistency when you have a high velocity of sales and lower contract values.
• Commission with Accelerators: This tiered commission structure that rewards over performance is best for companies confident in the math behind quotas and targets.
• Multiple Rate Bonus (Revenue): This comp plan best suits sales with high seasonality and adjusted quotas throughout the year. It extends the Single Rate Bonus plan by offering a higher bonus rate after surpassing quota.
• Opps Created & Demos Completed Bonuses with Closed Won Commissions: Best for mature sales teams who want to reward SDRs across the entire funnel.
• Demos Completed Bonus: This is a great first SDR plan.
• Qualified Opportunity Bonus & Close Won Commission: This SDR comp plan well suited for fairly mature sales organizations focused on quality leads and preparing their SDRs to advance to AEs.

Top Sales Compensation Strategies

When creating sales compensation plans, the goal is to strike a delicate balance between motivating your team, achieving your business goals, and staying within budget. Here are 3 top strategies to keep in mind:

1. Align your plan with your objectives: Don’t just throw money at goals. Clearly define what you want your sales team to achieve (e.g., increased revenue, shorter sales cycle, higher customer retention).

Tailor your compensation mix and quotas to reward progress towards these objectives directly. For example, if shortening the sales cycle is key, consider a tiered commission structure based on deal turnaround time. Remember, misalignment leads to confusion and demotivation. Ensure every element of your plan is pulling in the same direction.

2. Prioritize clarity and fairness: Complexity kills motivation. Keep your plan simple and easy to understand for your sales team. Avoid convoluted formulas and hidden incentives.

Transparency is key. Clearly communicate the plan, including payout calculations, eligibility criteria, and potential adjustments. Openly address concerns and answer questions.

Ensure fairness and equity. Quotas and performance metrics should be attainable and objective, avoiding bias or favoritism based on territory, product, or individual relationships.

3. Focus on motivation beyond just money: While commissions are powerful, they aren’t everything. Consider incorporating non-monetary sales team rewards like recognition programs, leadership opportunities, or exclusive experiences.

Create a positive and engaging sales culture that values collaboration, knowledge sharing, and continuous improvement. Celebrate successes and acknowledge individual contributions.

Offer flexibility and choice. When possible, consider options like allowing reps to choose their preferred benefits package or participate in profit-sharing initiatives.

By focusing on these three key strategies, you can design a compensation plan that not only rewards performance but also motivates your team to consistently strive for excellence, ultimately driving sustainable success for your business.

Bonus Tip: Track the effectiveness of your plan continuously using a solution like QuotaPath. Monitor key performance indicators, gather feedback from your team, and adapt your plan as needed to ensure it remains relevant and impactful.

Communicating Your Sales Compensation Plan Effectively

Communication is key to the success of your sales compensation plan. Make sure your reps understand their plans. Otherwise, you risk poor performance and falling short of your business goals. Here are a few best practices for communicating your sales compensation plan to help you get started. You can find additional compensation planning tips for a successful comp plan rollout in this blog.

• Transition from general to detailed messaging. Start with a broad overview of the plan when you introduce it to the entire sales force. Then provide more specific details for increasingly smaller groups or 1:1.
• Plan documents should balance detail with clarity and brevity. Keep comp plan documentation as brief as possible but clearly provide enough details.
• Use various methods to explain the new plan. Options include group presentations, 1:1 conversations, written documents, and an explainer video. Exposing reps to this information allows them multiple opportunities to present their questions and receive immediate responses to increase understanding.
• Create a Frequently Asked Questions (FAQs) document. Share it with the plan documents to answer common questions and accelerate plan understanding.
• Provide various calculation examples. Share this information with your plan documents or offer the sales team forecasting software that calculates earnings based on each pipeline opportunity. This type of tool answers questions while increasing clarity and plan understanding.

How To Monitor and Adjust Your Plan For Success

The success of your sales compensation plan hinges on many evolving factors. That’s why it’s essential to create a new sales compensation plan each year that’s aligned with and drives company objectives.

Start to design your compensation plan considering individual roles, company objectives, and your budget. Choose your compensation mix, establish payout frequency, design your commission structure, define quotas and performance metrics, and implement tracking and reporting systems.

Various types of sales compensation plans exist. You can get started by referring to the examples in this guide or leverage one of the free templates in our compensation plan templates library.

Whichever approach you choose to get started, remember that it’s essential to align your plan with company objectives, prioritize clarity and fairness, and focus on motivation beyond monetary incentives.

Finally, prepare an effective sales compensation communication plan to ensure the success of your new sales compensation plan. It will boost rep understanding, getting them onboard and motivated to go the extra mile.

QuotaPath’s new compensation reporting and modeling tools allow leaders to measure and model the effectiveness and costs of their compensation strategies. You can predict new plan costs, see real-time attainment health, and identify performance anomalies in one place to gain confidence in your compensation structures and optimize your team’s success.

No more scenario modeling through a series of compensation spreadsheets and reporting based on data from your CRM and payroll platforms. Now you can reference, report, and predict plan performance directly in QuotaPath.

See QuotaPath in action by booking a demo and witnessing the power of these new features firsthand.

Or, experience it yourself: Sign up for a free trial and start building smarter compensation plans today.

This is a guest blog written by our friends at Vonage on sales outreach strategy.

Sales outreach strategies have come a long way since the days of hiring sales reps to cold-call prospects with the hope that the caller’s charm is enough to convince prospects to make a purchase. In modern times, sales outreach strategies constitute a multi-pronged approach that leverages emails, calls, texts, and social media to move prospects along the sales funnel.

But what does a modern sales outreach strategy for B2B companies look like, and how does it translate to real results in the form of an increase in sales?

In this article, we explore five ways of using sales outreach strategies to increase B2B sales, including the creation of a buyer profile for better propositioning, the use of social proof to convert interest into action as per the AIDA model, and much more.

Understanding sales outreach strategies

A sales outreach strategy is exactly what it sounds like—a method sales professionals use to guide prospects from initial contact through to purchase. Successful sales outreach strategies require companies to manage sales performance through insights and use many communication channels to reach out to prospects, including emails, calls, social media, paid advertising, and more.

The obvious benefit of a sales outreach strategy to a B2B company is an increase in sales revenue, but this isn’t the only one. Sales outreach strategies also increase how efficiently sales are acquired because they generate qualified leads (leads that are more likely to convert because they fit the profile of a customer with high purchase intent).

Effective sales outreach strategies help B2B companies establish trust with prospects, leading to a greater probability of prospect conversion and retention. Now that we’ve defined what a sales outreach strategy is, here’s how it can be used to boost B2B sales.

How to use sales outreach strategies to boost B2B sales

1. Create a clear value proposition

The first step is to create a clear value proposition based on the needs and desires of your customers. Ask yourself: how does your ideal customer behave? What was their journey like from being a prospect to purchasing something from your company? What type of proposition did they respond to? The answers to these questions will help you to establish a proposition that reflects your company’s brand identity while also generating interest among prospects. 

The idea is to position your company’s product range as the solution to your prospects’ problems using a tone that instills confidence and trust. 

For instance, if you are selling cloud based call center solutions, start off by creating a buyer profile based on the sizes and goals of the companies you’re targeting as well as the industry they operate in.

This profile can then be used alongside an engaging and professional tone to convey a value proposition highlighting the power of your call center software to save your prospects time and money, increasing the probability of sales.

2. Engage in multichannel outreach

As the name suggests, multichannel outreach is all about using emails, calls, social media ads/messaging, and text messages collectively to move prospects down the sales funnel.

It’s not a new concept; physical stores have been known to conduct email marketing for years, and text message marketing for eCommerce is just as popular. This approach maximizes the chances of keeping your products in the minds of your prospects, provided you implement two key tactics.

1. Select channels where prospects are most active to increase their responsiveness to your strategy. The resulting attention toward your products and engagement with your company increases the likelihood of moving the prospects down the sales funnel. 

2. Reach out to prospects at the right stage of the sales funnel. The funnel contains four stages (awareness, interest, desire, and action), and each prospect’s position determines what channels are ideal for reaching out to them to maximize sales.

If prospects are merely aware of your products but have yet to show intent, offering a demo or sharing case studies from previous clients can be used to invoke a desire to purchase your products. This leads nicely to our next point.

3. Relay success stories to convince buyers

Put yourself in your target audience’s shoes for a second. Imagine receiving sales communication from a company showcasing the benefits of their products without any real-world examples of its usefulness. 

Now imagine being pitched the product and receiving case studies showcasing how it has helped others solve their problems and achieve their goals. Which scenario would entice you more?

It might seem obvious, but you would be surprised how many companies don’t relay success stories as part of their sales outreach strategies. Customer testimonials on social media, detailed case studies with data proving product success, and referrals from previous clients are just some of the avenues that are useful to relay success. 

We especially recommend case studies made up of detailed reports that describe how your solution has helped past customers overcome challenges because the best way to back up claims is with numerical data.

For example, suppose the call center WFM (workforce management) software that you sell helped your last client generate a 20% ROI, earning you a detailed positive review. Sharing this kind of data (with permission) with future prospects is highly likely to establish trust and confidence in your products, while also adding a human touch to your company, boosting further sales and strengthening market share.

4. Split-test outreach methods to establish best practices

Have you ever thought about split-testing your sales outreach strategies to hone in on the best ones to improve sales? 

Split testing is all about splitting your pool of prospects into two equally numbered groups and testing variations of an outreach strategy to see which variation works best.

Examples of variables worth testing in this manner include a specific stage of the sales call flow or two different case study examples showcasing the past success of your products.

Split-testing these kinds of components of your sales outreach strategies unveils what works and what doesn’t, resulting in a set of best practices for generating leads and engaging prospects. However, there are a couple of caveats to consider.

Firstly, what works for one prospective customer will not necessarily work for another. For instance, if you use a voice-over IP phone service to perform outbound sales calls and find that a 5 pm initial call works better than a 9 am initial call, there are likely to be many potential reasons why.

Perhaps your clients are based in a specific part of the world, or their managers happen to be free to take sales pitches later in the day as opposed to in the morning. These factors affect response rates, affecting conversion and sales success, so it’s important to be wary of them when analyzing the results of split testing.

5. Analyze strategy efficacy for continuous improvement

Whether a sales outreach strategy remains successful in the long term depends on how you go about measuring its effectiveness and evaluating the results to improve the outreach process.

This involves carefully analyzing the data gathered from the methods we mentioned earlier, such as split testing, to devise and test hypotheses on how to improve the sales process and make it as efficient as possible. 

Improving sales outreach strategies depends on how well you analyze metrics such as click-through rates on landing pages and call durations for prospecting to gain insights into what works best for prospects. 

The key is to arrange this data into detailed sales reports and identify trends to form the basis of hypotheses. This can then be used to adjust your sales outreach strategies to increase leads and conversions.

Summary

Sales outreach strategies require a multifaceted approach integrating multiple communication channels to push prospects through the sales funnel. Establishing a clear value proposition serves as the foundation of sales outreach, and conveying success stories through reviews and case studies establishes credibility in the eyes of the prospect. 

This combination increases B2B sales and is further enhanced by tweaking the various components of outreach strategies by split-testing variables, such as different versions of landing pages for outbound sales emails. Analyzing the results of these tests to fine-tune outreach strategies is the final step to boosting sales.

Apply the five methods outlined in this article to improve your outreach strategy and enjoy the results of increased B2B sales.