As you begin drafting next year’s sales compensation plans, wouldn’t it be nice to quickly understand the potential commission earnings and team quota attainment with existing deal data?

In QuotaPath, now you can. 

Draft Plans

Called Draft Plans, this feature enables GTM leaders to design — then test —  comp plans in-app that they’re considering. 

Run plan proposals against existing CRM data to estimate total teamwide commissions, identify potential edge cases, get a pulse on plan effective rates, and see how realistic (or unrealistic) attainment goals are. 

Think of it as a sandbox environment.

Test different plan components. Map your CRM fields and verify calculations with past data before anyone from your team sees it. 

Considering mechanisms to drive gross revenue retention in 2024? In Draft Plans, duplicate your plan. Then, add a multi-year accelerator to see how much you would have paid your team using last year’s sales numbers.

Notice a shift in your sales cycle from 4 to 6 weeks to 9 to 12? 

In Draft Plans, evaluate different quota frequencies to see if moving your team from a monthly quota to a quarterly quota makes sense. Would more reps hit quota and have a greater shot at achieving their on-target earnings under your proposed plan changes? 

Now, avoid guessing and let Draft Plans inform your decision-making. 

Maybe you’re just curious to see the financial implications of increasing the commission rate of a plan. What would your effective rate increase to? Would it take you over the recommended 20% to 25% of your total customer acquisition cost? 

Draft Plans can help address and validate these questions quickly without requiring another spreadsheet.  

Once leadership has aligned on your comp plans, Draft Plans gives you control over the rollout to your sales teams. 

In QuotaPath, prep your plan components and CRM mappings, assign team members, and ready plan verification. Add a few test deals to verify calculations. Then, publish to your teams on your time frame, whether it’s following your sales kickoffs or a manager one-on-one.

Have confidence heading into your next comp plan rollout. 

Plan Details

Additionally, we made it easier for you to edit and monitor the ongoing performance of your comp plans.

Plan Details organizes earnings paths within each comp structure. It also shows the deal data used to calculate commissions and lists the reps under that plan. The performance section reflects how your team is progressing to plan and displays total earnings, average effective rate, and plan attainment by rep.

The next time you want to check performance or edit details, such as implementing a SPIF or adding a new team member, you can do so in Plan Details. 

With Draft Plans and Plan Details:

• Experiment, validate, and verify plan setup: Build plans in the new draft stage to test different setups and mappings and understand performance with the last period’s data.
• Strategically roll out plans to reps: Control the distribution of new comp plans to reps by publishing drafts after you’ve validated the data and are ready. Then, verify comp plans with reps right in QuotaPath.  
• Monitor ongoing performance: See total earnings, average effective rate, and plan attainment by rep for each plan on the plan details page for the past year, quarter, month, or custom date.
• Quickly edit plans: View and edit plans, add or remove reps under that plan, and track rep sign-off from a universal view in Plan Details

Want to see? Schedule time with our team. Check out these new features and create and manage compensation strategies confidently and effectively. 

Although customer success managers (CSMs) have always held a critical role in retaining customers, they have taken on a new level of relevance and responsibility in today’s market.

CSMs once primarily focused on successfully implementing a company’s product or service. However, this past year, CSMs have been increasingly held accountable for customer retention and driving net revenue retention (NRR).

This shift is due to several factors, including:

• The newfound importance of customer retention: In today’s competitive landscape, acquiring new customers is more expensive than retaining existing ones. As a result, companies are focusing more on customer retention and success.
• Changes in the tech market: Companies’ valuation is now also tied directly to the company’s ability to prove profitability, often linked to retention and customer lifetime value. 
• The growing complexity of B2B products and services: B2B products and services are becoming increasingly complex, and customers need more help getting the most out of them. CSMs can play a vital role in helping customers achieve their desired outcomes.
• The rise of subscription-based businesses: Subscription-based businesses rely on recurring revenue from existing customers. CSMs can help subscription-based businesses by increasing customer satisfaction and reducing churn.

As these shifts have unfolded, leaders have had to re-think how to compensate and coach them to drive maximum results. 

Read on to create a compensation plan that is fair, motivating, and aligned with the changing role of the CSM.

First, what is customer success?

Customer success is a business process that helps customers achieve their desired outcomes with a company’s product or service. It is a customer-centric approach focusing on building long-term relationships and ensuring customer satisfaction.

It’s an especially important function, the MVP of an organization even, as it can help businesses:

• Increase customer retention and lifetime value
• Reduce customer churn
• Generate upsell and cross-sell opportunities
• Improve brand reputation
• Gain competitive advantage

What does a customer success manager do?

Customer success managers are responsible for various tasks, including:

How the role has evolved

In previous years, many looked upon the CSM role as an order taker, focused on running successful onboarding, building adoption, and addressing technical difficulties.

That’s far from the case today. 

Now, we are seeing CSMs more involved in the sales process to help develop and deliver presentations and demos before taking over for onboarding. 

“We’re going to see companies train and compensate CS teams like Sales teams,” said Pavilion VP of Growth Laura “LG” Guerra. “We’re already seeing CSMs go through discovery and negotiation training.” (Watch the full webinar here on adjusting your sales motion.)

We’re also seeing CS teams take a more strategic role in growing customer retention by developing and implementing long-term success plans with their accounts while monitoring usage and engagement data to identify high-risk customers. 

Some organizations have introduced CSMs into product development to gather customer feedback and identify new features and functionality that would be valuable to customers. 

Additionally, as companies pivot toward upsells and retention (and away from new biz), CSMs have increased their focus by partnering with marketing to create case studies, testimonials, and referrals.

How to structure CS comp plans

As the role has changed, how organizations pay their CS teams has had to change, too. 

LG, for instance, rolled out a SPIF (yes, a SPIF, typically reserved for your sales org.) to her CS team last spring. 

This involved a single-rate bonus of $100 for every time a CSM booked a meeting with a C-Suite executive, under the theory that the sooner they involved top leadership in the onboarding process, the more likely the account was to renew. They kept the SPIF in effect for a month and will use the results to inform CS strategy. 

Regarding the structure, Nate Sooter, Senior Business Operations Program Manager at Smartsheet, and a former CSM, said that CS comp structures include a good base salary with a 25-30% variable bonus. 

RevOps Leader Jeff Ignacio agreed and shared the following in his substack post: The pay mix is generally around 70/30 for the CSM. A $70,000 salary would pair with a $30,000 OTE (on-target earning). 

“The bonus should be based on metrics that the CS can actually control,” said Nate.

This includes:

• License allocation (Percentage of licenses purchased are activated)
• Active user (Percentage of users active within X number of days)
• Net dollar retention (This metric falls mostly outside of your CSM’s control, but it should be part of their responsibility.)

Jeff also suggested splitting the CS’s variable pay into various segments, weighted accordingly, to avoid tying the compensation only to retention. If you do that, you’re weighing your CS team’s compensation exclusively to a metric they do not have much control over.

“The weighting of each category can vary depending on need,” Nate said. “But I too often see companies put the entire bonus contingent on net retention (or gross retention) and ignore where CS is most effective: Getting customers implemented & active.”

Tip from Nate: Your metric becomes obsolete if you set the active user %
too high or too low. Determining a reasonable goal for CS is crucial.

He added that focusing CS incentives toward ensuring clients use the software as much as possible is helpful for incentive alignment and tees up your renewal team better. 

Customer success responsibility scenarios

For different models of CS comp plans, our friends at RevOps Co-op shared the following.

• CS runs renewals & expansions
  • Pay mix: 70% base and 30% variable
  • Retention goal of 85% gets them a third of their variable pay
  • Commissions from expansions are heavily weighted and have big accelerators
    
• CS responsible for renewals only 
  • Pay mix: 80% base and 20% variable
  • 10% of variable pay is based on a 90% customer retention goal
  • Other 10% is earned from commissions on renewals
  • Plus a $150 SPIF for every upsell and 1% commission rate on final sale

• CS doesn’t actively sell
  • Competitive salary
  • Paid a bonus if company hits retention goal
  • Earns a $150 SPIF for qualified leads to sales plus 1% on final sale

Support with your CS comp plans

If you’re seeking additional help modeling your customer success comp plans or account managers, check out our blog, How to design an account manager commission plan. The roles, although somewhat defined differently, will overlap.

Our team is always available to discuss your compensation strategy and help you run your sales compensation processes more efficiently. Schedule time to learn more. 

This is a guest blog from Sage, the accounting, people, payroll, and payments software provider.

Financial forecasting projects your company’s future financial performance using intricate data and analysis. It serves not only as a road map toward business success but as a key influencer in your strategic financial decisions.

Of all the components of your business plan, it’s one of the most challenging tasks you’ll need to complete. That said, its direct correlation with business sustainability and success also makes it the most crucial.

From evaluating the viability of a new investment to optimizing resources and attracting investors, financial forecasting impacts core business planning processes. So, let’s discuss why creating a financial forecast should be a top priority.

The power of financial forecasting in business planning

Of the many, many reasons that businesses fail, the top reason businesses do so is because they run out of cash or fail to raise new capital. More often than not, such significant losses can be attributed to a lack of strategic business planning. 

Ineffectively allocating resources. Poor sales compensation management. Failing to create specific, achievable goals or prepare for potential risks. These are just some of the mistakes businesses make that lead to financial ruin. 

A detailed financial forecast helps you avoid these pitfalls. Financial forecasting utilizes complex quantitative data—historical data, market analysis, competitive research, etc.—to gain accurate insights into your business’s current and future financial health. In doing so, you can make strategic, data-informed decisions.

For example, you can accurately predict whether you need to reduce staff levels to optimize labor costs or increase them to meet revenue goals. Or, you can assess the viability of a revenue opportunity that you’re itching to take advantage of. 

We’ll explore all the ways that financial forecasting can inform decision-making and drive business growth later on. First, let’s clear up a common misconception—are financial forecasting and budgeting the same thing?

What is the difference between financial forecasting and budgeting?

Financial forecasting and budgeting are often mentioned in the same conversations. While they do complement each other, they aren’t the same thing. 

Budgeting evaluates the financial resources available to your company to allocate resources appropriately. As a strategy, it outlines expenses, projected sales, and cash flow to reveal the current shape of your company’s financial position. Additionally, it establishes the proposed direction that you want your company to head in within a near-term time frame.

Financial forecasting and wider, big-picture financial decisions inform your budgeting strategy. A financial forecast includes an in-depth analysis of historical and current data sets, market conditions, and trends to estimate future profits and revenue. The data it unlocks can tell you whether your company is heading in the direction you want it to go. 

What are the key characteristics of financial forecasting in comparison to budgeting? Here’s a quick summary: 

• Flexibility: Once they’re set, a budget tends to remain static. Financial forecasts are more dynamic in that they evolve and adjust in response to changing ground conditions. 

• Time frame: A budget is concerned with the short term and is usually updated annually. Financial forecasting happens in both the short-term and long-term but primarily focuses on the bigger picture across several years.

• Objectives: A budget is created to reduce and optimize business costs to meet quarterly or yearly goals. Financial forecasting goes beyond cost-cutting to project growth orientation and establish strategies that guide this growth.

5 ways financial forecasting improves the business planning process

What is financial forecasting used for, and how does it improve your business planning process? Let’s find out.

Determines achievable goals for business growth

It’s all well and good having pipe dreams. But it’s working toward realistic, attainable goals that will guide your business to success. 

Financial forecasting provides a clear overview of your business’s historical, current, and projected financial performance. Using this information, you can set performance expectations, make accurate sales projections, identify profitable investment opportunities, and align sales compensation with big-picture business goals.

Getting there becomes much easier when you know the exact route that will lead you to where you want to go. 

Financial forecasting illuminates the steps needed to meet your monthly, quarterly, and annual goals. Plus, it considers the potential risks you’ll come across along the way—more on that later. 

Optimizes business resource allocation

What resources does your business need to meet your goals? Exactly when will it need them? Furthermore, how much will they cost, and what are the potential benefits and drawbacks may they incur?

Every resource your business utilizes—capital, employees, inventory, technology, materials, etc—should be allocated strategically. Financial forecasting enables you to dive deep into the “hows,” “whys,” and “whens” of every resource that you use.  In doing so, you minimize financial loss and maximize return. 

Let’s take labor as an example. To hit your sales goals, you’ve identified that you’ll need to hire new employees. A financial forecast will assess how many employees you’ll require to avoid understaffing and overstaffing, when you’ll need to hire them, and the labor costs associated with doing so.

From there, you can evaluate the financial implications and accurately allocate resources so that they generate a positive return. The same goes for all of your resources, from cash investments to materials. 

Aligning resource allocations with your other business expenses and outgoings gives you a complete picture of your financial performance. 

Gain full visibility of your payments and outgoings by using AP automation software so that you can view how your investments affect your cash flow in real time. Use the data generated by reports to uncover opportunities for further resource optimization and financial forecasting insights.

Anticipates potential financial risks 

Market crashes, operational failures, and supply chain disruptions are examples of potential risks that can have huge financial repercussions. Financial forecasting analyses risk potential and devises strategies to eliminate, avoid, or mitigate the financial impact of these risks. 

Some risks, such as overspending, can be eliminated using a financial forecast to inform accurate budgeting. For other risks, such as supply chain disruptions, you can create a contingency plan to mitigate financial impacts.

There are other potential risks that forecasting can help with, too. Take tax, for example. 

Unorganized record-keeping and tax filing processes increase the risk of receiving a hefty tax bill for which you’re completely unprepared. This can have significant financial consequences. Plus, if your lax processes lead you to submit an inaccurate tax return, it may even land you in trouble with the IRS (or HMRC, if you’re in the UK). 

A thorough financial forecast estimates your future tax obligations, reducing the risk of tax bill scares. Lots of businesses are moving to automated accounting solutions. These solutions ease financial forecasting by automatically adding sales and purchase invoices to your account. You can track and forecast your income and expenses at a glance, guaranteeing accurate tax calculations.

If you conduct business across the pond, self assessment accounting solutions have become mandatory for sole traders in the UK as part of HMRC’s “Making Tax Digital” initiative. That said, 53% of Americans also used online software to file taxes to the IRS last year. So, the trend is undoubtedly catching on as a means to streamline tax filing and drive better financial forecasting. 

Attracts investors through transparent reporting

Without financial forecasting, even businesses turning over a healthy profit can struggle to find investors. Why? Because investors want to know exactly how you plan to succeed. 

Hopes and prayers don’t instill confidence. But cold, complex data? That’s a different story.

Data-rich financial forecasts instill investor confidence as they provide the facts and figures that outline your company’s path to growth. When presented with a granular analysis of all your data, investors can better visualize your success and, consequently, their return on investment. 

Forecasts investment profitability and feasibility

New investment opportunities are always tempting—but are they always worth it?

Whether it’s launching a new product, onboarding new technology, or purchasing real estate for expansion, investment opportunities are everywhere. But if you fail to explore the financial implications of making these investments, you put your company at severe financial risk. 

Financial forecasts are crucial for ensuring your investment is viable and profitable. Let’s take new technology as an example. 

You want to invest in cutting-edge technology to meet your business growth goals. A financial forecast will tell you whether you can afford the initial purchase. But beyond that, it will estimate the ongoing overhead, maintenance, and onboarding costs. It will consider the investment in alignment with future projections based on historical and current market data.

Using these insights, you can evaluate the viability and profitability of the investment to determine its ROI potential. You can do this for every small-scale or large-scale investment, from adopting a sales commission software to acquiring another business.

Prepare for the future with financial forecasting

Financial forecasting generates various large-scale, multi-faceted benefits that directly influence business success. It guides critical data-driven decisions like budgeting, investment viability, and resource allocations. It significantly reduces the negative impact of financial risks and can even help you avoid some entirely. It can also secure the backing you need from investors to bring your growth initiatives to fruition.

Although we unequivocally disagree with this action, companies dialing back compensation plans because their reps “earned too much” is not uncommon. 

It’s something that Cliff Simon, Chief Revenue Officer at Carabiner Group, experienced first-hand during his early career in sales.

Cliff, who sold wireless and Internet of Things (IoT) services for one of the major wireless carriers, earned six figures a year in 2013 while overperforming against his sales compensation plan. 

That’s when his employer switched that portion of his comp plan to a measly $5,000 quarterly bonus. 

What followed? You guessed it.  An exodus of sales talent — Cliff included. 

As frustrating as it was for Cliff at the time, this move sparked his transition to SaaS and ultimately led him to the startup space, where he remains today as a CRO and supports other startups in advisor and fractional executive roles. 

“I went from a 90,000-person company to 30,000,  3000, 300, 35, and employee No. 3 in 2020 at Carabiner Group, where I now lead our go-to-market function,” Cliff said. “It was this downward progression of finding more responsibility, having a stronger impact on the business strategy, and getting closer to the data.” 

We sat down with Cliff to gain insights into his career transition. The revenue leader shared a bit about his journey from rep to C-Suite and offered advice for others interested in climbing the sales ladder from IC to CRO. 

Check out our Q&A below. 

Q&A

Once you worked at smaller organizations, how did the shift begin from sales toward RevOps?

Cliff: Everywhere I went, the smaller the company, the more I got my hands dirty, whether it was comp plan design, territory design, driving metrics and conversion rates, improving the handoff between sales, implementation, and customer success, or managing the sales and marketing relationship.

Also, I lived in Excel spreadsheets more than any sales rep had the right to.

I didn’t realize all those pieces were the connective tissue within RevOps. They happened to be what I enjoyed the most, in addition to signing contracts, which is always fun.

When did you begin gaining more RevOps responsibilities? 

Cliff: I spent a lot of time between 2016 and 2018 doing what would be considered RevOps. I worked closely with my Salesforce admin team and the architect, conducted quality and assurance tests, and helped debug. I constantly ran through the system and tried to figure out what would happen if I clicked this and then that.

Then I started overssing comp plans and was still running sales. And when my boss went out on extended medical leave in 2018, the responsibility to run everything on the GTM side fell to me. 

What other RevOps-related things were you in charge of while leading a sales team?

Cliff: During this period, we were also going through a Salesforce Classic to Lightning migration, and all sorts of stuff was breaking. My team was small enough to guinea pig it, and I’ve always created documentation. So, as we first went through this process, I built essentially our sales playbook. And without realizing it, I acted as an admin while generating anywhere from 54 to 65% of my team’s number. 

As CRO, what teams do you oversee, and how are you improving as a leader? 

Cliff: I’m responsible for our GTM motions: sales, marketing, customer success, partnerships, and RevOps on the GTM side of the business. I also have a hand in financial planning and analysis. 

As far as learning and improving, you need to become unconsciously competent within areas of your role to perform at a high level. Some come from experience and natural ability. Others require a bit more digging in. I was weakest from a marketing aspect, so I spent the first 18 months at Carabiner meeting with one to two marketing VPs or CMOs weekly to put myself through a make-shift marketing school. 

How has your affinity for data-inspired your path to CRO?

Cliff: I like being data-driven, and as CRO, sitting over the entire business, I won’t be successful if I can’t touch all the data points and understand how the entire customer journey works. I would feel significantly hindered if I couldn’t understand why customers choose us, how we address their problems, and how we deliver recurring impact to them long-term. All of that has to correlate to the customer buyer journey. What is the value that they’re hypothesizing that they will receive from us? How do we get into the weeds and solidify that on a later-stage call?

Then, once onboarded, what’s the time to first impact? How do we continue to drive recurring impact and value to their business so they stay with us long-term?

Taking that together, alongside a desire to change the way people perceive B2B sales and using tools to adapt how we sell, it scratches an itch for me. 

What will it take for CROs to be successful this year?

Cliff: The new breed of CRO will have to be far more data-driven than the person who was just really good at sales. You’ll have to understand the “whys.” 

You’ll have to get good at servicing your existing customers and understand how to drive an upsell and cross-sell motion to improve net dollar retention, gross retention, and net promoter scores. 

Lastly, what advice do you have for reps looking to make it to CRO one day? 

Cliff: Take on the things that your boss wants to get done. Don’t wait until they ask. Show initiative, drive impact and value, and find things that interest you. The other is to do the same with new company initiatives. Grab them by the horns and do your best to help the company achieve those aims.

I like numbers and playing with spreadsheets. And because of that, I naturally desired to go toward a RevOps, data-driven world. 

So if something like that interests you, lean into it. 

Thanks for sharing your thoughts and experiences with us, Cliff!

About QuotaPath

QuotaPath supports revenue leaders with resources and solutions that help them automate sales commissions, provide visibility into compensation, and motivate reps through forecasted earnings.

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

Are you asking Sales to fly blind? You wouldn’t try to fly a plane without the necessary data to follow the flight plan. But that’s what you do if you don’t have sales compensation dashboards.

A sales compensation dashboard is a visual display of your sales data in a readily accessible single view. It overviews commonly tracked key performance indicators (KPIs) and metrics such as quota attainment, average deal size, commission data, and compensation plan details.

A sales dashboard surfaces valuable information and insights for sales reps, management, leadership, and accounting. These dashboards are essential to guide users toward goal attainment, enable informed decisions, streamline operations, and inspire outstanding achievements.

Why sales compensation dashboards matter

Imagine a world without sales compensation dashboards — one where sales data is spread across multiple channels or spreadsheets, some password-protected.

Tracking progress, gathering insights, or getting answers to compensation questions would become a time-consuming wild-goose chase for reps and managers.

Unable to easily access sales data, leadership would be forced to piece together a view of team performance, wasting valuable time trying to identify and prioritize coaching requirements.

Discrepancies and misunderstandings around quota attainment and compensation accuracy would be commonplace as individuals waste valuable time manually tracking results. This would undoubtedly reduce trust and accountability, leading to costly rep turnover.

Uncertainty around progress toward goals, to the next compensation tier, or which deals to prioritize causes reps to become increasingly unmotivated and frustrated.

Ultimately, performance falls short, and business goals aren’t achieved.

That’s why sales compensation dashboards matter.

Key components

A sales comp dashboard consists of several essential elements, including:

Benefits of using sales compensation dashboards

The advantages of using sales compensation dashboards include:

Improved visibility and transparency: Sales compensation software provides easy access to data and insights that clarify performance against plan and is broken down by comp plan component.

Greater trust and accountability: The ability to see performance and earnings breakdowns based on the compensation plan builds confidence in the plan, boosts understanding, and promotes responsibility for results.

Increased motivation: A clearer understanding of the workings of the compensation plan improves the effectiveness of the plan in terms of driving desired sales behaviors and business goal achievement.

Better decision-making: Sales leadership gains a clearer picture of sales performance compared to the plan, enabling them to draw more educated conclusions. These insights facilitate the comp plan design process as well. Reps also gain clarity, allowing them to prioritize where to focus their efforts for the best outcomes.

Easier coaching prioritization: Sales performance metrics by team and individual make it easier for managers to identify and prioritize coaching needs to boost performance.

Allows leadership to get a quick pulse on team and individual numbers: A sales compensation dashboard provides leadership with an at-a-glance snapshot of team and individual sales performance compared to plan.

Time savings: Sales dashboards consolidate all the necessary information in one view. This eliminates the need for shadow accounting to track individual or team performance. Data must no longer be pieced together from various platforms across the organization.

How to create an effective sales compensation dashboard

“When it comes to sales metrics, a tremendous amount of time is spent reviewing information that leaders can do very little to influence,” wrote Scott Edinger in the Harvard Business Review piece, “Are You Paying Attention to the Right Sales Metrics?”

That’s why it’s pivotal to review business metrics that are most meaningful to your team and leadership. 

Here are some steps to ensure your sales dashboard includes what matters most. 

Identify your goals

First, you want to determine what you want to achieve with your sales compensation dashboard. For example, do you want to improve visibility and transparency, increase motivation, or make better compensation decisions?

Choose the right metrics

Once you know your goals, you can start to identify the specific metrics and features you need to include in your dashboard.

The metrics that you decide to track on your sales compensation dashboard should be aligned with your sales compensation plan and your company’s overall business goals. Some common sales compensation metrics include:

• Sales performance metrics: For example, quota attainment, average deal size, customer churn rate
• Commission earnings metrics: Data such as total commission earnings, average commission rate, commission payout schedule
• Compensation plan details: A summary of the sales compensation plan, including the different components of the plan and how they are calculated.

Choose a dashboard tool

There are various sales compensation dashboard tools available; see our section below for more details.

Set up your dashboard

Once you have chosen a dashboard tool, you need to set up your dashboard. This includes adding metrics and features and configuring the dashboard to meet your requirements.

Test your dashboard

Once you’ve set up your dashboard, it is essential to test it to ensure it functions properly. Have sales reps and managers test the dashboard to confirm it meets their needs and is easy to use.

Deploy your dashboard

Once you have tested and refined your dashboard, you can introduce it to your sales team.

Additional tips

A few extra tips for creating an effective sales compensation dashboard include:

Make it easy to use: The sales compensation dashboard should be easy for sales reps and managers. The charts and graphs should be clear and concise, and the data should be easily interpreted.

Update it regularly: The sales compensation dashboard should be updated routinely with the latest data. This will ensure that sales reps and managers have the most up-to-date information on their performance and earnings.

Get feedback from users: It is essential to get rep feedback on the sales compensation dashboard to ensure it meets their needs. This feedback can improve the dashboard and make it more effective.

By following these tips, you can create an effective sales compensation dashboard that will help you to improve visibility and transparency, increase motivation, make better compensation decisions, and streamline processes for sales reps and managers.

Common metrics tracked

The specific metrics you track in your sales compensation dashboard will vary depending on your sales compensation plan and your company’s overall business goals. However, in the sales compensation analysis, you may want to track metrics like:

Sales performance metrics: These metrics track the sales team’s performance against their goals. Some typical sales performance metrics include:

• Quota attainment: Percentage of sales reps who have achieved their quotas.
• Average deal size: Average size of deals closed by the sales team.
• Customer churn rate: Percentage of customers who have canceled their subscriptions or stopped doing business with the company.
• Customer lifetime value: Total revenue that the company expects to generate from a customer over the lifetime of the relationship.
• Commission earnings metrics: These metrics track the sales team’s commission earnings. Some standard commission earnings metrics include:
• Total commission earnings: Total commission earnings for the sales team.
• Average commission rate: Percentage of sales revenue that sales reps earn in commissions.
• Commission payout schedule: How often sales reps are paid their commissions.

Compensation plan details: These metrics provide detailed information about the sales compensation plan and a breakdown of the different ways in which a rep can earn commissions. Some standard compensation plan details include:

• Base salary: The fixed salary that sales reps earn.
• Commissions: The variable pay that sales reps make based on their sales performance.
• Bonuses: One-time payments that sales reps earn for achieving specific goals.
• SPIFs: Incentives or rewards designed to drive specific sales behaviors to meet short-term goals.

Choosing the right sales compensation dashboard software

There are various sales compensation dashboard tools available. Some are cloud-based, while others are on-premises. When selecting sales compensation software, you should consider the following factors:

• Features: Does the tool have all of the features that you need? For example, real-time data, performance insights, tracking progress toward personal goals and quotas, and forecasting future earnings based on the pipeline. You may also want dashboards for different roles to minimize time wasted navigating the comp data they need most. Does it facilitate effortless communications to resolve compensation issues and eliminate confusion? Does it support the complexities of your compensation structure?
• Usability: Is the tool easy for sales reps and managers to use? Is the user interface intuitive?
• Integrations: Does the tool integrate with your CRM system and other sales tools? If so, is the integration effortless or does it require customization or a developer to make it work?
• Pricing: Is the tool affordable and transparent? Is there a free trial, a startup package, or implementation fees?
• Scalability: Can it grow with the team? If so, does the solution offer additional features to facilitate scaling the software across your organization?

Real-world examples of sales compensation dashboards

No two sales compensation dashboards are the same however, here are some real-world examples to help you create the ideal sales dashboard to meet your needs:

Sales Rep Dashboard

Give your reps a dashboard that enables them to track their performance. Dashboard reporting in this board includes key metrics such as open opportunities, number of deals in their pipeline, meetings booked, and forecasted revenue.

Sales Leaderboard

Tap into the competitive nature of your sales reps by using a sales leaderboard dashboard. Commonly displayed information shown on these dashboards includes the number of completed activities such as meetings, emails, or calls, customer retention numbers, generated MRR, and number of new accounts.

QuotaPath Admin Home

Our Admin Home dashboard provides clarity through a comprehensive view that delivers performance insights into essential compensation metrics and surfaces high-priority sales incentive management tasks.

These tasks include deals awaiting your approval or flagged commission discrepancies and payouts owed. This enables you to manage and keep current with commission-related activities efficiently.

The Admin Home view lets you view your team’s financial goals, total earnings, payouts, and effective rates and discern trends by filtering the data by month, quarter, or year.

QuotaPath Rep Home

Our Home for Reps dashboard consolidates insights, tasks, and deal data history on one screen for easy viewing. This enables sellers to access an overview of earnings per month or quarter, plan payment breakdowns and payouts.

These insights promote accountability and ownership of their sales compensation. It enables them to get answers to their commission plan or payout questions by submitting their inquiry directly from their Home dashboard. This eliminates the need to jump through multiple hoops to get compensation answers.

This dashboard also gives reps an overview of their performance, forecasted earnings according to their pipeline, and task alerts. They can see a monthly breakdown of their performance against their comp plan broken down by comp plan components, such as bonuses, SPIFs, and accelerators.

Reps can add and track their progress toward personal financial goals like purchasing a car, making a down payment for a house, or saving up for a vacation.

Start leveraging sales compensation dashboards

Sales compensation dashboards are essential to streamline activities and achieve individual, team, and organizational goals. Otherwise, you lose visibility, transparency, trust, accountability, and motivation while inhibiting decision-making, coaching, and results.

Identify your goals, your metrics, and your sales compensation software. Then, set up your dashboard and test the deployment. Your organization will function more efficiently, and you’re more likely to meet or achieve your goals.

Looking for additional ways to boost your sales effectiveness? Schedule a chat with a team member to learn more about QuotaPath’s dashboards and sales compensation management, or start your free trial.

The key to success in sales is having a flexible, well-considered strategy in which every member of your organization has a part to play. But regular sales reports prevent even the best strategies from suffering setbacks and help you hit long- and short-term targets.

Analyzing sales data through periodic reporting is the simplest yet most effective tool for monitoring progress, identifying areas needing improvement, and determining where the latest technological and organizational solutions can fit into your operations.

Below, we’ll look at the basic process of writing sales reports and a few types of reports that may help you achieve your goals. Let’s get started.

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What is a sales report?

A sales report outlines a comprehensive overview of a company’s sales performance over a specific period. Reports can measure daily, quarterly, or annual sales. They’re typically used to evaluate sales performance, identify opportunities for improvement, and make informed business decisions.

Sales reports may include key performance indicators (KPIs), such as sales by region, customer segmentation, sales pipeline, conversion rates, and revenue forecasts. More complex or specific reports can include information that may impact sales, such as contact center automation trends, team performance evaluations, or marketing campaigns.

Team leaders or sales managers are usually tasked with writing these reports, incorporating data and analysis related to sales activities, revenue generated, products or services sold, customer trends, and other relevant metrics. Sales reports are valuable for monitoring progress, setting targets, and developing strategies to drive sales growth and achieve organizational goals.

How to write standout sales reports in 6 simple steps

There are many types of sales reports (more on that later), each with specific factors to consider when creating one. Regardless of the type, the general process is the same. These are the basic steps.

1. Determine your objective

First, determine the purpose or objective of your sales report. It could be to evaluate sales performance, track progress towards sales targets, identify areas for improvement, or provide insights for strategic decision-making. For example, if you’re trying to demonstrate the benefits of a new insurance lead gen campaign, you may want to track the number of leads generated and gather data giving you an idea of how many turned into sales calls and, ultimately, conversions.

Defining the objective helps ensure that the report is focused and provides relevant information. It will also help you to determine whether you achieved your initial objective once you’ve finished the report.

2. Identify your audience

Once you’ve determined why you’re writing your report, it’s time to decide who to write it for. Consider who will be reading the sales report. Identify the stakeholders, such as sales managers, executives, or team members, and anticipate their needs and expectations. Adapt the report’s tone, level of detail, and format accordingly to effectively communicate with the intended audience.

3. Select a time period

Determine the time frame that the report will cover. It could be daily, weekly, monthly, quarterly, or annually, depending on the frequency of data collection and the reporting needs of your audience. As a rule, daily and weekly reports are less detailed and more concerned with factors like the average number of outbound calls per rep, sales commissions, or short-term sales performance. Monthly or quarterly reports cover the number of deals closed and organization-wide performance.

4. Gather the data

Gather all the relevant data required for the sales report. This could include sales figures, revenue data, customer information, or product or service performance. Ensure the accuracy and completeness of the data by verifying it from reliable sources.

You may need to gather information from several sources, including sales software, remote devices, sales software, CRM tools, and your sales team. This data can be collected in a central database for convenience and easily accessed to produce regular sales reports for management, investors, and other stakeholders.

5. Select key metrics

Determine the key performance metrics that align with your objective and audience. These metrics could include total revenue, units sold, average deal size, conversion rates, customer acquisition, retention rates, or any other sales metrics. Select a combination of quantitative and qualitative metrics that offer a comprehensive view of the sales efforts.

6. Choose engaging visuals and publish

Present the data in a visually appealing, organized manner. Use charts, graphs, and tables to visualize the data and make it easier to understand and interpret. Choose visuals that align with the objective and resonate with your audience.

Select standout pieces of information — like a significant sales target reached due to the effort — and present them in callout boxes or alongside engaging imagery to make them more impactful and memorable.

Once the report is finalized, publish it in a suitable format, such as a PDF or shared document, for easy distribution and reference. Alternatively, if you plan on making reports public, you can set up a new site using Only Domains to share your findings with stakeholders. Your new page can serve as a repository of sales metrics for easy access and referencing.

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5 types of sales reports

Sales pipeline reports

A sales pipeline report is a visual representation of a potential customer’s stages during the sales process. It provides an overview of the sales opportunities at each stage, from initial contact to final closure. 

For example, if you’re trying to sell the latest payroll processing software, a pipeline report might measure the rate at which prospective customers turn into qualified leads, generating more revenue. It may also highlight which industries seem most interested in payroll software and tend to convert. 

The report typically includes information about the number and value of deals and the probability of closing each opportunity. A sales pipeline report helps sales teams and managers track the progress of deals, identify potential bottlenecks or areas of improvement, and forecast future sales revenue.

In a sales pipeline report, opportunities are typically organized into different stages: prospecting, qualification, negotiation, and closing. Each opportunity is assigned a probability of success based on its current stage and the historical conversion rates of deals at that stage. The report allows sales teams to prioritize their efforts, focus on high-value opportunities, and allocate resources effectively.

Won and lost deals analysis reports

These reports systematically analyze the deals won by the company and those lost, providing valuable insights into the sales process and overall performance. They typically include key metrics such as the percentage of deals won versus lost, average deal size, the average length of deals, and the average duration of sales cycles for both won and lost deals.

This report aims to uncover trends and patterns that may explain the differences between won and lost deals. It explores factors such as the reasons for winning or losing the deal, the competition faced, the effectiveness of the sales strategy, the product or service offering, pricing, negotiations, and customer satisfaction. 

By examining these factors, companies can identify their strengths and weaknesses. That enables them to make informed decisions on improving their sales process, increase win rates, and drive revenue growth.

Sales call reports

A sales call report is a detailed record of interactions made by a salesperson with customers or prospects during sales calls or meetings. It provides an overview of each call’s activities, discussions, and outcomes. These reports aim to determine whether sales staff are meeting sales targets and, if not, to determine why.

Sales call reports can also illustrate the effectiveness of your current sales call strategy. For instance, declining sales rates in your outbound team area could alert you to the need for an innovative solution, such as selecting the best power dialer to keep your call center competitive. It can also help you pinpoint strategies that are working effectively. 

Average deal size reports

Average deal size reports cover insights into the typical monetary value of sales deals closed by your team. Their biggest benefit is in predicting revenue based on current sales patterns. This is a critical source of information for determining where to take your sales strategy in the future.

If, for example, you set a sales target of $250,000 per sales representative per quarter and the average deal value is about $5,000, you’ll see that each representative needs to close at least 50 deals in a given quarter. This is a great tool for giving your team clear on-the-job performance guidelines within the report’s specified period.

Conversion rate reports

A conversion rate report analyzes the proportion of sales leads or opportunities that result in a completed sale. They typically include detailed statistics such as the number of potential opportunities, the number of actual conversions, and total conversion rates.

Conversion rate reports may also delve deeper into specifics, showing conversion rates by product, region, sales representative, or other factors. Monitoring these metrics can yield insight into the outcomes of sales strategies and areas in need of improvement. It can also help you determine which sales tactics have higher conversion rates.

Gain a competitive edge with effective sales reports

So there you have it: the basic process of writing sales reports and a few of the more common types. Adopting the best sales reporting tactics and practices can go a long way toward making your company more competitive. But investing in the best resources and personnel is also important, from cloud-based dialer software to specialized lead generation experts.

Find out more about what Convoso offers to help you achieve your sales goals. Sign up for a free demo today.

Over 20% of sales reps find themselves tangled in commission payment disputes at least once per year, leading to 9% of those reps quitting over it.  

That’s according to a new report that surveyed more than 450 Finance, Sales, and RevOps leaders from SaaS.

Many of these errors stem from earnings miscalculations, which increase with every additional formula and rep you must keep track of. 

Today, we launched Streamlined Payout Workflows to help. 

Run commissions more accurately — and faster than ever with our new guided process. 

Make commission payment efficient

Streamlined Payout Workflows, which cuts the clicks it takes to process commissions in QuotaPath in half, organizes deal and payout information by rep so that those who run commissions can approve earnings and schedule payouts from a universal view. 

Instead of toggling between spreadsheets or pages within your sales compensation software, with Streamlined Payout Workflows, view commission at the deal level and approve earnings, set eligibility rules, and schedule payouts all from one spot. 

Meet our new inbox-zero approach to commissions below:

Now, account for your entire revenue team’s earnings data in an efficient guided process

Commission approvals have never been easier (or faster).  

See for yourself by starting your free trial, or schedule time with our team to learn more. 

About QuotaPath

QuotaPath partners with revenue teams to manage sales compensation more efficiently. With a library of free resources that support compensation plan design and strategy and an automated commission tracking platform, QuotaPath aligns teams, saves time, and increases earnings accuracy.

Missed our last product update? Check out our auto commission rates tool that calculates commission rates without formulas and breaks down views for your reps to foster comp understanding and accountability.

Incentive compensation plans motivate and reward employee performance and are commonly used in sales and sales-adjacent fields. 

At its core, an incentive comp plan aims to motivate employees to achieve specific goals or objectives tied to company targets. 

That’s well-known and widely understood.

However, in our recent study, 97% of revenue leaders reported challenges during compensation plan design. Moreso, 100% admitted to struggling with the management and execution of their compensation strategy. 

At the design and management stages, common themes popped up throughout the report, such as unnecessarily complex plans, their compensation structure’s inability to motivate reps, and a lack of alignment at the leadership level and between comp plans and business goals. 

In our experience, the best incentive compensation plans align with the organization’s overall goals and motivate revenue teams to achieve those goals. They are fair, logical, easily understood, and, most importantly, equitable.

Read on to learn how to build compensation plans that motivate, align, and impact the results your organization seeks to achieve while rewarding employees.

Objectives of incentive plans

First, let’s start with the objectives of annual incentive plans. 

The primary objective of an incentive compensation plan is to motivate employees to achieve certain goals or objectives. These goals can be specific to the individual employee, the team, or the organization.

Some common goals that incentive compensation plans are designed to achieve include:

• Increasing sales
• Improving customer satisfaction
• Reducing costs
• Launching new products or services
• Expanding into new markets
• Improving employee engagement
• Rewarding overperformance
• Aligning and driving business goals
• Recruiting and retaining top sales talent 

Effective incentive plans: Key elements

Next, let’s review the key elements.

We’ve seen and supported thousands of compensation plans. The most effective structures include healthy quota to on-target-earnings (OTE) ratios, high team-wide attainment results, and commission rates that are high enough to drive selling behaviors but low enough to maintain appropriate effective rates. 

To measure your incentive program effectiveness, consider the following. 

Do your compensation plans align with your most important business metrics?

From this year’s compensation trends report, 39% of leaders said their comp plans do not align with their key metrics, like gross revenue retention, gross margin, and customer acquisition cost.

Some plans even contradict business goals.

For example, if your company focuses on increasing gross revenue retention, the comp plans should drive GRR. To do that, you might add accelerated commission rates on multi-year deals (comp plan template) or when a customer signs from a segment that data shows has the highest retention rates or your ideal customer profile.

Will your company hit this quarter’s targets?

Look into how close or far your team is from hitting this quarter’s goal. 

If it’s far off, you’ll need to change something, but it might not be at the comp plan level. For instance, you may need to reconfigure business goals and financial projections first and then adjust your compensation plan to help get there.  

What percentage of your team has or is on pace to finish the quarter at goal?

80% of your team should hit their quotas. Our report found that 91% of companies are well below 80%.  

If that sounds familiar, look into the problem. Is it for lack of pipeline opportunity? Subpar closing abilities from your team? Reps aren’t motivated? 

Identify the problem first so that you can address it. Then, look into the compensation structure. How realistic are the quotas and OTEs? 

What data did your team collect to set these initially, and does that data match today’s market? If not, consider lowering quotas to avoid disgruntled reps who will eventually churn.

Does Sales Leadership offer coaching, training, and support?  

To succeed, your sales team should have access to continued coaching, support, and training. Give them your time, resources, and enablement to help them grow and do their jobs more efficiently. 

Take a look at the difference between your lowest-performing rep and your highest

Look into the gap between your highest and lowest-performing reps. Why is there such a difference? Is it territory-related? If so, you should adjust your plans or territories to make them more equitable. 

Is your effective rate too high? 

Your effective rates could indicate that you’re paying your team too much per sale, especially if they’re not hitting goals. 

If so, consider adding a commission floor or cliff so that reps must meet a minimum threshold before being eligible to earn commissions. But be careful with commission floors. If they too low, you probably shouldn’t have one. Reversely, if the cliff is too high, you’ll discourage reps who may start sandbagging.

Rep feedback

While numeric data is always helpful, you should also collect anecdotal data. Get rep feedback. Do they understand how they make commissions? Are they motivated by it? If not, find out what would. 

Designing incentive compensation: What works best?

In addition to comp plans that are logical, fair, and simple to understand, the best sales compensation plans often include an accelerator, pay earnings as close to the sale date as possible, and have no cap. 

This is according to data we gathered for our 2023 Sales Compensation Trends report.

An accelerator in sales pays reps a higher commission rate, usually 1.5x their commission rate, for achieving a quota attainment milestone or selling a more extended contract, for example. Similarly, decelerators pay less than the base commission rate until reaching a threshold. They work like cliffs, except the rep earns commissions at a lower rate versus no commissions. 

Although, keep in mind that you can’t go wrong with a single-rate commission plan for its simplicity. 

Additionally, your quota period or frequency should be tied to the length of your sales cycle. For those with shorter sales cycles, consider a monthly or quarterly period. For longer deals, an annual frequency will be more appropriate.

Some general principles to follow when designing incentive compensation plans:

The role of performance metrics in incentive plans

We use performance metrics to measure employee performance against the goals in the incentive compensation plan. The performance metrics used should be relevant to the goals of the plan and to the job that the employee is doing.

Some common performance metrics used in incentive compensation plans include:

• Sales revenue: The total money a company generates from selling its products or services. It is calculated by multiplying the quantity of products or services sold by the selling price
• Customer satisfaction: Measures how satisfied customers are with a company’s products or services, often through surveys or customer feedback forms
• Cost savings: The amount of money a company saves by reducing costs. Leaders often realize cost savings by increasing efficiency, reducing waste, or negotiating better prices with suppliers.
• New product launches: New product launches can be a way for companies to increase sales, grow market share, and differentiate themselves from their competitors
• Market share growth: The increase in the percentage of a market that a company controls. You can increase market share growth by increasing sales, attracting new customers, or acquiring competitors
• Employee engagement: The level of commitment and enthusiasm that employees have for their work

Other common performance metrics that may be used in incentive plans include:

• Profitability: Weighs how much a company is worth
• Efficiency: Measures how well a company uses its resources and is an important metric to track because it can help a company reduce costs and improve profitability
• Quality: Measures how well a company’s products or services meet customer expectations, which can help predict retention
• Innovation: The development of new products or services to stay ahead of the competition and grow market share

Balancing risk and reward

One of the challenges when it comes to designing an incentive compensation plan is balancing risk and reward.

On one hand, the plan should motivate employees to achieve their goals. Conversely, the plan should not create too much risk for the organization.

To balance risk and reward, use a tiered reward system. In a tiered reward system, employees earn rewards at different levels based on performance. For example, an employee might earn a 10% bonus for achieving 100% of their goal, an accelerator of 15% or achieving 110% of their goal, and a 20% bonus for achieving 120% of their goal.

You could also put in cliffs or decelerators to mitigate risk and add measures that guarantee a rep meets a certain performance level before earning higher commissions.

Check out this blog to learn how to test your comp plan for risks. 

Case Studies: Successful incentive compensation models

One of the most successful case studies we’ve seen from a company that underwent a comp plan makeover is EverView. 

Before implementing QuotaPath and leveraging our team’s expertise in comp plan guidance, Everview had 35 compensation plans for their 80 reps, with some plans having as many as 12 components or routes to earn commissions. 

Their sellers had no visibility into how they made commissions and went into paydays without knowing how much their checks would be.

Not only did this collection of comp plans create a headache for those who had to calculate and pay commissions, but the reps didn’t understand their comp plans.

EvervView partnered with team members to reduce comp plans from 35 to 8 and again to one plan. This simplification of the plan, paired with rep visibility into their earnings and forecasted commissions, led to record-breaking deals for the EverView sales org. 

“From the top down, we consistently communicated the comp plan, the area or vertical our team should be focused on and directed our sellers to review in QuotaPath what their earning potential could be,” said Ron Morgan, EverView’s Director of Commercial Operations.

“Our comp plan was easily measured and viewed by our sellers in QuotaPath, which drove positive selling behaviors.”

Aligning incentive plans with organizational goals

If you take nothing else from this blog, remember the importance of aligning your incentive plans with your company’s goals. 

You can ensure alignment by bringing Finance to your comp planning proposal discussions early to learn the main objectives. 

Then, follow these steps. 

First, do not start the comp plan design process until you clearly understand your business goals. Host meetings with the executive team, board, and whomever else involved in the planning to ensure you’re clear on this. 

Next, create a compensation plan design committee that includes cross-collaboration from Finance, Sales, your C-Suite, and even Marketing and HR.

Schedule time to collect feedback from your reps face-to-face or over a survey. This will help you create a plan that aligns with your targets and motivates your reps. 

You’re ready to work with your comp plan design group to create compensation components that directly push this year’s metrics. 

Then, you test it. Use last year’s numbers to see what the plan would pay out. Run some edge cases and plug in the earnings numbers using next year’s projections to see how viable the plan is. 

Pitfalls to avoid

We’ve listed pitfalls to avoid throughout, but to double down, stay away from:

• Overcomplicating by providing too many streams or boundaries to earn commissions
• Building plans that don’t have your critical metrics in mind
• Quotas that are too easily obtained, or reversely, unrealistic quotas and OTEs
• Not providing reps visibility into progress and their compensation plans

About QuotaPath

You should feel well-equipped to build an effective comp plan. However, we are still here to help.

Connect with our team to learn comp plan best practices and how to run and manage sales compensation more efficiently through accurate commission tracking. 

Most would agree that a sales rep who spends time threading deals packed with growing relationships should make more than reps who follow a transactional sales motion.

That’s why enterprise sales reps are some of the highest-paid sellers in the tech world. 

This difference in selling motions highlights one of the most significant factors affecting sales compensation plans, especially on-target earnings (OTE),  but there’s more. Below, we’ve pulled together five of the most important ones to consider when designing sales compensation plans for reps. 

Selling motion (consultative vs. solution vs. transactional)

The first factor to consider is the selling motion, which can significantly impact the compensation reps earn. 

That’s because consultative sellers, solution sellers, and transactional sellers all have different compensation structures that reflect the different types of sales they make.

Consultative sellers typically have the highest OTEs, as they are responsible for selling complex solutions to high-value customers. These deals typically involve a longer sales cycle and a more complex negotiation process. As a result, consultative sellers need to have a deep understanding of their customer’s needs and be able to develop custom solutions that meet those needs. Both of which come at the cost of a more experienced salesperson — and higher compensation. 

Solution sellers normally have OTEs lower than consultative but higher than transactional sellers. Solution sellers are responsible for selling pre-defined solutions to customers that involve a shorter sales cycle and less complex negotiations. However, solution sellers still need to have a good understanding of their customer’s needs and be able to explain how their solution can help them achieve their goals.

Lastly, transactional sellers often have the lowest OTEs since they sell low-value products or services with less room for negotiation and tighter sales cycles. Additionally, transactional sellers do not need to have as deep of an understanding of their customer’s needs like a consultative sellers, but they do need to be able to close deals quickly and efficiently.

Complexity of sale (# of decision makers, sales cycle lengths)

Similar to the selling motion, the complexity of the sale should also dictate your compensation packages for your sellers.

More complex sales, such as those with multiple decision-makers and long sales cycles, typically involve more work and require a higher level of skill and expertise. As a result, sales representatives who sell complex solutions are typically compensated more than those who sell more straightforward solutions and have higher OTEs.

• Number of decision-makers: Sales with multiple decision-makers can be more difficult to close, as each decision-maker may have different needs and priorities. Sellers must build relationships with all decision-makers and develop a solution that meets everyone’s needs. Easier said than done, as this can be a time-consuming and challenging process.
• Sales cycle lengths: Long sales cycles also add to the complexity of a sale. Sellers must maintain long-term relationships with their prospects and keep the sales process moving forward. This can be difficult, especially if the customer is unsure when they are ready to decide.

Complex sales require more work and skill and are accommodated accordingly compared to less-intensive sales.

Role & responsibility (new biz, new biz + expansion, new biz + renewal + expansion)

The role and responsibility of your reps will also dictate their compensation packages.

In previous years, sales representatives responsible for new business typically earned the highest commissions as they brought in new revenue. Meanwhile, reps in charge of new business and expansion or those responsible for new business, renewal, and expansions have historically earned lower commissions.

But that’s starting to change as roles evolve and retention and predictable revenue grow more critical. 

Now, we’re seeing commission rates increase for those responsible for renewals, upsells, and, as a result, OTEs. Other trends we’ve picked up on include increased multipliers on multi-year renewals and bonuses for early renewals. 

Location (remote vs. specific city/region)

The location of where the rep works used to affect their OTEs and base pay. But following COVID-19 and the necessity of a remote workforce, we’ve seen less of a region’s impact on compensation. 

Still, some disparities exist between a rep on the West Coast versus one working from Denver, which you can compare in Betts 2023 Compensation Guide. 

Pricing model (consumption/subscription)

Lastly, consider the pricing model of your organization when determining compensation.

A business’s pricing model can have a significant impact on a rep’s compensation. For instance, consumption-based pricing and subscription-based pricing models have very different implications for sales compensation.

Consumption-based pricing: Consumption-based (or usage-based) pricing models charge customers based on how much they use a product or service. This pricing model is often used for SaaS products, cloud computing services, and telecommunications services.

In a consumption-based pricing model, sales reps earn incentive pay based on the revenue they generate from their customers, which aligns the rep’s incentives with the company’s goals of increasing customer usage and revenue.

• Example: A sales rep for a SaaS company earns a commission on all of the revenue that their customers generate from using their product. This incentivizes the sales rep to focus on selling to customers who are likely to use the product heavily, which would increase the company’s revenue.

Subscription-based pricing: Subscription-based pricing models charge customers a recurring fee to access a product or service used for software products, streaming services, and fitness clubs.

In a subscription-based pricing model, sales reps earn according to the number of new subscriptions they sell.

• Example:  A streaming service rep earns a commission on each new subscription that they sell. This would incentivize the sales rep to focus on finding new customers who are interested in subscribing to the streaming service.

The main difference between the two compensation structures is that consumption-based pricing models incentivize sales reps to focus on increasing customer usage and revenue, while subscription-based pricing models incentivize sales reps to focus on acquiring new customers.

OTEs will typically be similar, but the commission rates and payout schedules may vary. 

Conclusion

In addition to these five factors, several others can impact sales compensation. However, these five pull the heaviest weight when structuring your sales compensation models.  

By understanding these factors, you can design a sales compensation plan that is fair and equitable and that motivates your reps to achieve their goals.

For additional guidance on how to build comp plans and automate your sales compensation process, talk with QuotaPath today. Better yet, build a customized comp plan from one of our trusted templates and see your plan live on our platform by signing up for a free 30-day trial. 

In our 2024 Compensation Trends report, “Solving the biggest sales compensation challenges: Insights from 450+ Finance, RevOps, and Sales Leaders,” we asked leaders to think about how often reps quit over commission disputes.

This report discloses compensation management challenges shared by directors, VPs, and C-level executives from Sales, Finance, and RevOps in the United States and the United Kingdom surveyed during the first half of 2023.

This report aimed to understand the root cause of leadership disconnects, understand common compensation challenges, reveal gaps, and offer comp plan preparation guidance.

The survey findings highlighted that 100% of Revenue leaders agree that sales comp plans need improvement and that 78% of revenue leaders admitted that their sales reps find their compensation plans difficult to understand.

Thus far, we have dug deeper into areas of the survey in articles like:

– Leaders share 5 biggest challenges with sales compensation plans

– “Alignment” is most needed area of improvement in sales compensation management

– Why 91% of sales teams missed quota this year

This blog focuses exclusively on the impact of poor compensation management on rep exits and discusses the problem, why it is rampant, and how to avoid it.

What is the long-term impact of poor compensation management?

The answer: reps quit over it.

Leaders shared that 22% of reps have at least one dispute a year, and survey findings showed that 9% of reps eventually quit over commission errors or disputes.

Failure to address this costly issue can greatly impact revenue and business goal attainment.

Why reps quit and how compensation plays a role

Sales rep churn has historically been significantly higher than in other departments, hovering around 35% per year, according to Hubspot. That’s a significant amount, considering that organizations typically experience about 10% turnover yearly. So, why do reps quit, and what role does compensation play in this trend?

Lack of development and advancement opportunities

Sellers are demotivated when they don’t receive skill development or opportunities for advancement. This alone can lead sellers to display symptoms of “quiet quitting,” such as demotivation and minimal performance, according to Gartner. This makes them 35% less likely to attain quota and 51% more likely to be actively job-seeking. The Association of Talent Development (ATD) also found that 41% of people quit their jobs due to a lack of career development and advancement opportunities.

Lack of tools and technology

Tools and technology to boost efficiency and effectiveness used to be nice to-haves and are now expected. The Sales Happiness Index revealed that 33% of those who want to leave their roles cited a lack of access to the best tools and technology to be successful.

Unrealistic targets

Pushing reps to achieve seemingly unattainable goals leaves reps feeling burned out. Gartner’s survey showed that 89% of sellers feel burned out, and 54% are actively job-seeking.

So, it’s not surprising that Gartner also found that 67% of reps surveyed felt that leadership is overly optimistic and disconnected from the reality of sales today.

Unmotivated

Gartner found that 59% of sellers don’t believe management can motivate them. This creates what they call “high levels of seller drag, or a demotivation away from work,” a symptom experienced by 83% of sellers and most often associated with lower quota attainment and higher intent to leave.

Benefits, bonuses, and pay

According to the Sales Happiness Index, 43% of salespeople who want to leave their current job cited a lack of benefits, 31% a lack of bonuses, and 51% indicated they would leave for higher pay. During challenging economic times with limited deals, commission-only reps may be inspired to jump ship for employers that offer a base salary, especially since many sales pros got into sales because of the high earnings potential.

Commission mismanagement

Lastly, our research revealed that an average of 22% of sales reps have at least one commission dispute yearly, and 9% of reps quit over commission mismanagement. That’s nearly one-tenth of rep churn.

As you can see, compensation plays a major role in rep turnover in various ways. Understanding these contributors to rep attrition enables you to recognize and address them.

What causes commission disputes and incorrect checks?

Sales commission disputes contribute to rep turnover and arise more frequently than expected. These disputes and incorrect checks have several causes, including:

• Lack of understanding: Our data showed that 60% of reps take 3 to 6 months to fully understand how they earn variable pay from their comp plans. Reps are then unclear about how much to expect in their checks and when. This may cause them to question the earnings in their checks.
• Overly complex comp plans: 17% of leaders in our survey noted that plans too complicated for reps to understand were a compensation obstacle for them. Excessively complicated plans make it difficult for reps to understand how they are paid and what to expect in their commission checks. This may lead them to believe their pay is incorrect when it doesn’t match their expectations.  Plus, too complex plans require additional effort to calculate, track, and pay, increasing the odds of errors.
• Manual entry errors: Human errors in Excel spreadsheets are common. All it takes is an additional zero or a misplaced decimal point to throw off calculations. Inaccuracies accumulate as spreadsheets pass between teams. Then, plan changes further increase the number of errors.
• Lack of transparency: An inability for reps to easily track and view their earnings makes it more difficult to catch errors in commission calculations to head off disputes.

The cost of poor compensation management

Poor compensation management costs add up. It all starts with the costs of filling empty seats on the sales floor when reps quit.

“The cost of hiring a new salesperson isn’t terribly expensive, but the most expensive seat on the sales floor is an empty seat,” said QuotaPath Chief of Staff Graham Collins.

For instance, if a leader takes an average of 30 days to find and hire a new salesperson, add 90 days of ramp time before they can start selling deals.

“That’s four months of sales lost,” said Graham. “So, if your rep’s quota is 5x that of their on-target earnings, the company is losing 1.66x the salesperson’s OTE, or 3x their salary.”

Therefore, a rep who earns a $50K base salary costs the company $150K.

That’s $150K that could be avoided with better compensation management.

Then, going beyond the cost of replacing reps who quit, there’s lost selling time, sales rep demotivation, and time invested in addressing disputes and errors.

Disputes and incorrect commission checks damage trust and often cause reps to track and calculate their earnings manually. This further detracts from selling time.

How to avoid poor compensation management using QuotaPath

You can overcome compensation management issues and avoid commission disputes with QuotaPath.

• Gives reps visibility into compensation plans, real-time earnings, and commission calculations.
• Enables reps to catch and flag discrepancies before commissions are paid.
• Facilitates communication between reps and commission managers concerning errors and disputes, then tracks their resolution in the app.
• Prioritizes pressing tasks in a complete dashboard to hasten resolution.
• Organizes commission data and insights to look up deal specifics easily.
• Provides your reps with an accessible view of current, forecasted, paid, and upcoming commission information to promote compensation accountability and motivation.

Looking for additional ways to address poor compensation management issues? Download the full report or chat with our sales team on sales compensation management improvements using QuotaPath.

According to our 2024 sales compensation report, Solving the Biggest Sales Compensation Challenges, more than 450 Finance, RevOps, and Sales leaders reported “failure to motivate reps” as their most challenging issue with comp plans. 

Another 30% admitted their plans don’t motivate reps when asked directly if they do. 

In today’s market, which is only recently showing signs of rebounding with initial public offerings and valuations steadily rising, we understand that the stress on Sales is exceptionally high. Their teams, plus the teams they’re selling to, have downsized. This has made motivating teams facing so much economic opposition more difficult.

We can’t control the market. 

But one thing we can control is the levers to promote desirable selling behaviors, which can be done through intentional, direct, and tactful compensation design.

The core function of a sales compensation plan is to inspire reps to sell deals that earn them and the business the biggest bucks in the long term. When the plan fails to do that, your reps are more inclined to sell what is easiest for them, which is typically not the best deal for your organization (high probability of churn, lower lifetime value). 

Below, learn how to motivate sales teams using compensation and other tactics.

How to motivate your sales team

First and foremost, before you put anything into place, you need to understand what motivates your team.

Is it money? Recognition? Team collaboration?

Our previous blog explores the psychology behind motivation and outlines the differences between extrinsic and intrinsic elements. Extrinsically motivated individuals value outside influences like a higher commission rate or avoidance of a negative outcome, such as a decelerator. 

Meanwhile, intrinsic motivation ties to personal interest or accomplishment. 

Salespeople often are a mix of both.

To find out what motivates them, this may seem obvious, but you must ask them directly.

You can do this through surveys, one-on-one meetings, or focus groups. Ask open-ended questions that allow your team members to share their honest thoughts and feelings.

Secondly, pay attention to their behavior. What are your team members doing that gets them excited and motivated? What are they not doing? Pay attention to their behavior and try to identify patterns. For example, do they seem more motivated when working on complex deals or competing against each other?

Last, look at your company culture. Your company culture can greatly impact what motivates your sales team. For example, if your company culture is very competitive, your team members may be more motivated by financial incentives. If your company culture is more collaborative, your team members may be more motivated by recognition and rewards.

Once you better understand what motivates your sales team, you can tailor your management approach accordingly. For example, if you know that your team members are motivated by competition, create sales contests or other competitive initiatives. If you know that your team members are motivated by recognition, recognize and reward them for their achievements.

How to motivate sales team outside of commissions

More often than not, compensation is not the only motivator. 

Before we get into sales compensation, let’s look at how to motivate your Sales team without money. 

Here are four ways to incentivize behaviors outside of commissions. 

Additionally, you can encourage outbound efforts by following these tips. 

How to motivate sales team with compensation

There are several compensation components you can implement to drive performance.

Accelerators, which take the shape of a higher commission rate, bonus, or multiplier, reward over-performance or incentivize reps to surpass an attainment threshold. This is one of the most widely adopted components of sales compensation plans, according to our 2023 Trends Report.

Similarly, you could put decelerators in place or lower commission rates or bonuses to deter your reps from selling certain deals (unfavorable payment terms, a customer outside your ideal customer profile, monthly contracts, etc). Pairing accelerators with decelerators is one of our most-used compensation plan templates. 

Next, play with SPIFs throughout the year when you need to encourage a short-term burst, launch a new product or service, enter a new market, test a potential permanent comp plan, change, or more. 

Some of our favorite SPIFs include “fast close” SPIFs when a rep earns a flat bonus for securing several deals within the first month of the quarter, and team-wide SPIFs that apply to every rep if they hit their team goal. But the best ones target specific business-wide metrics, like:

• Cash flow: SPIF on deals under Net 30-60-90 day payment terms
• Gross profit: SPIF for deals more profitable to the business long-term
• Retention/renewals: Reward a SPIF when customers commit to early renewals

Check out our Learning Center article, Do SPIFs work? to learn how to run these successfully.

Whatever components you include, it is imperative to communicate with your reps the “why” behind the comp plan and how their performance directly moves the business forward. Their understanding of optimizing their comp plan is paramount; without it, your efforts to motivate them will fall flat. 

How to check if your comp plans are motivating

Once you find what motivates your team, you must check in throughout the year to ensure your strategies still work.

Here are 10 ways to evaluate your sales motivation tactics:

1. Host 1:1 with your reps to learn about what motivates them
2.  Incorporate their feedback in your comp plan design process
3.  Incentivize different behaviors
4. Test future changes with SPIFs first before implementing in plan
5.  Reward overperformance
6. Avoid demotivating levers if you can (commission floors or cliffs, decelerators, lack of accelerators)
7. Use historical and industry data to ensure quotas and OTEs are fair
8. Communicate plans, changes, and policies (clawback clauses, compensation agreements)
9. Provide visibility into commissions and compensation plans (Try QuotaPath for free)
10. Remove risks of inequities by standardizing comp plans and building fair territories and account scoring models 
that evenly distribute opportunity.

Conclusion

Our report uncovered that motivating reps posed the most significant challenge for revenue leaders regarding their comp plans.

That tells us we can do a better job finding out exactly what motivates our reps while blending non-compensation incentives with comp-related ones. 

About QuotaPath

Founded in 2018, QuotaPath’s sales compensation management and commission tracking software rallies Sales, Finance, and RevOps around their financial goals by providing a source of truth for commissions, attainment, and forecasted earnings. Calculate and pay commissions more accurately with QuotaPath. Learn more by scheduling time with our team today.

In our 2024 Compensation Trends report, “Solving the Biggest Sales Compensation Challenges: Insights from 450+ Finance, RevOps, and Sales Leaders,” leaders reported that 91% of them are failing to hit sales quota expectations this year.

This report reveals insights from a survey of over 450 RevOps, Finance, and Sales Leaders from the United Kingdom and the United States. Participants included directors, VPs, and C-level executives at tech-adjacent and SaaS companies. The survey was conducted during the first half of 2023 to investigate the impact of misaligned and poorly executed compensation plans.

In this report, we set out to:

• Determine where the disconnect between Finance, Sales, and RevOps Leaders originates.
• Understand issues encountered by organizations throughout the compensation plan design process.
• Expose the largest gaps in commission management.
• Provide advice on how to prepare for comp plan success in 2024.

The survey exposed common compensation issues, including a lack of confidence in comp plan performance, sales reps not understanding how they earn commissions, and 100% of revenue leaders admitting to the need for comp plan improvements.

Every challenge leaders referenced previously in the report — misalignment to business goals and between teams, complexities of plans, failure to drive rep motivation — often results in missed quotas and targets.

Our survey found that 91% of companies fail to achieve 80% or more of their quota targets.

Below, we share what leaders credited these misses to.

Market conditions

Failure to adjust comp plans as your strategies change in response to the market influences your sales team’s ability to achieve targets.

Market volatility in 2023 caused SaaS businesses to shift from a “grow at all costs” mentality toward business efficiencies.

It started with the first quarter of 2023, when deal count and raised capital dropped 45%, marking the slowest period since 2017.

Then, organizations changed the key performance indicators (KPIs) they were tracking to show investors a healthy business model. They started monitoring metrics currently of greater importance to investors because they offer a more direct path to profitability. These KPIs include customer lifetime value, customer acquisition costs, and gross revenue retention.

However, tracking the right metrics alone doesn’t do the job. These companies failed to boost predictable retention without adjusting their sales compensation plans to reflect their new focus. The simple inclusion of compensation levers to promote the right activities is all they need.

Lack of experience or skill

Another cause of missed quotas is a lack of experience designing plans (24%), the third biggest challenge cited by survey participants.

This can lead to common sales compensation errors like overly complex plans, failure to align plans with business objectives, using outdated data, and duplicating another company’s plan.

Our survey revealed overcomplicated plans as a common issue, making aligning teams and gaining adoption harder.

Avoiding too much complexity is essential; otherwise, you risk sales rep confusion and demotivation, which is the opposite of what your plan should accomplish.

Signs that your comp plan is too complex include reps’ confusion about how they earn commissions, a continual need to add SPIFs to drive behaviors, and taking longer than 1 minute to explain it.

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Misaligned sales activities

A properly designed compensation plan drives sales activities that align with and drive business objectives.

“You have to eliminate any disconnect between the business’s performance and your team’s performance,” said QuotaPath Sr. Director of RevOps Ryan Milligan.

The following misaligned sales activities hinder your team’s ability to hit their goals and should be avoided:

• Reps push a product they’re used to selling vs. a newer one with a better product market fit.
• Outbound efforts target industries, company sizes, and existing tech stacks that slow down sales cycles and are harder to sell.
• Reps chase unqualified leads because the potential deal size is larger.
• The team focuses on the wrong metrics, trying to push ARR at a grow-at-all-costs measure vs. taking a strategic approach to winning ICP deals (ideal customer profile) with shorter sales cycles and more likely to close/win.

Sales activities thwart efforts to boost desirable business KPIs by decreasing the odds of customer retention, shortening customer lifetime value, and increasing customer acquisition costs.

Poor time management:

Another key factor preventing reps from hitting their numbers is poor time management practices like:

• Spending too much time researching prospects
• Failing to set time for outbound prospecting.
• Neglecting CRM updates
• Not conducting follow-ups
• Investing too much time on poor-fit prospects who don’t fit your ICP.

Practicing effective time management boosts rep productivity and results.

New hire ramp-up periods

New hires need time to reach total productivity and aren’t yet equipped to hit the quota of more established reps on the team. Failure to adjust the quota for these reps makes them fall short.

Sales reps who lack experience or skills aren’t as productive as their fully onboarded and experienced counterparts. So, when you add new reps to your sales team, the hiring and ramp process significantly decreases productivity.

A leader takes an average of 30 days to find and hire a new salesperson, and it takes an additional 90 days of ramp time before they can start selling deals. Then, according to Rain Group, it takes an additional nine months for reps to be fully productive and 15 months to become top performers.

To offset this, add management by objectives (MBOs) in your new hire ramp plan that promote behaviors that will help them be successful faster and give them a fair shot at achieving OTE. For instance, you could reduce quota, keep commission rates intact, and provide other ways for the new reps to hit OTE, such as completing training or a prospecting goal.

Unstructured sales process

A sales process that lacks structure is a huge obstacle to reps hitting quota.

A structured sales process delineates what needs to be done at each sale stage and includes clearly defined steps and milestones. It guides reps as they advance the sale from prospecting to presenting to offer to close, increasing the odds of success by preventing deals from slipping through the cracks.

Failing to set up a sales process hurts productivity and gives sales reps a huge disadvantage. Asking them to work in an unstructured sales process like this leaves them constantly trying to figure out what to do next. Some of your reps may find their way, but you’re setting most of them up to fall short of targets.

Lack of motivation

Motivating your sales team is one of the core key elements of a sales compensation plan, and when that’s not happening, this indicates a flawed compensation strategy.

Address lack of motivation by confirming your reps understand their comp plan and how they are paid. You can achieve this by leveraging a survey or providing your reps multiple opportunities to ask questions about their incentives. These are also great ways to gather feedback on their incentives and learn how they are motivated.

Another way to cultivate motivation is by giving your sales reps easy access to views into their earnings. They can translate their pipeline into potential commissions using a tool like QuotaPath to display forecasted earnings and attainment through Team Leaderboards.

Unrealistic quota or sales goals

Company objectives typically change with market and financial shifts. Comp plans must be adjusted and aligned with business goals to promote sales behaviors that drive these new objectives.

As market conditions shifted in early 2023, we didn’t see companies adapting their sales compensation plans to align with evolving business objectives. This has resulted in reps at many companies falling short of sales goals.

Unrealistic quotas and sales goals, especially on-target earnings, can be challenging to set and adjust. Use our free Quota:OTE ratio calculator to take the guesswork out of this process. It measures the health of your targets against your team’s historical performance while determining if they are too easily attainable.

Address comp plan challenges

Compensation plans can be used to address these common reasons for sales teams missing quotas. This is especially true regarding sales activity alignment, motivating reps, ramp-up periods, and structured sales processes.

Looking for more ways to solve compensation plan challenges? Download the full report or chat with our sales team on sales compensation management improvements using QuotaPath.