4 sales compensation best practices to help you for 2023

compensation plan examples featuring four experts

This blog marks the fourth and final blog of our series featuring comp plan examples for account executives from industry leaders. In case you missed our previous posts, catch up on the firstsecond, and third blogs. 

Despite a looming recession and ongoing tech layoffs, sales reps remain in power when it comes to their compensation. If they don’t like your plan, they’ll hop to the next highest-paying company. 

“Your comp plan is one of the biggest recruiting tools to attract top reps,” said Andrew de Geofroy, SVP,  Global Revenue Platform for Quantive.

At a time when rep tenure continues to shrink, compensation packages also act as a driver in retaining your reps.

Just ask Mark Roberge, Managing Partner at Stage 2 Capital, who received nearly a dozen resumes from reps looking for different opportunities after their leadership introduced an unfavorable comp plan. (Check out his thoughts on how to successfully communicate comp plan changes.)

Companies have to get compensation right in 2023. 

But it’s never been simple, despite our incessant calls for simpler plans.

“The number of people who come to me and ask me to build their comp plan is startling,” said Beekeeper CRO Kevin McKeown.

To help, we asked Andrew, Kevin, and Insight Partners EVP, Sales & Customer Success Hilary Headlee and Operating Partner, Sales & Customer Success Pablo Dominguez to share their compensation best practices.

Plus, our four contributors shared their top comp plan examples for account executives below.

Hilary: Shorter quota periods

“It can be really tough to look into the crystal ball and get your comp plan accurate for the year,” Hilary said.

To overcome this, Hilary suggested rolling out quotas on a quarterly or bi-annual basis (depending on the role) in place of an annual quota.

“This approach takes a lot of trust from your sellers to not see an annual number,” Hilary said.

It can also be arduous for the Finance and Ops team to maintain and roll out, but that shouldn’t be a dealbreaker.

“You can make modifications once a year or a couple of times a year if you need to, especially if you’re rolling out a new product-led growth motion, or jumping into e-commerce or a new market,” Hilary said.

Andrew: Factor ramp time

Assume all new hires will not be productive toward quota until fully ramping up. Set your ramp times to align with sales cycles, and be prepared to adjust them if your sales cycles change.

For example, Andrew’s company switched from a 90-day ramp-up to a 6-month one because the former didn’t account for their long, enterprise sales cycles.

Now it’s six months, and reps have a $0 target until they fully ramp.

However, should they book business, the rep retires that quota earns commissions, and moves toward the accelerator bands.

Pablo: Tease it with a “focus group” of reps

Once you have the initial compensation plan created, Pablo recommends testing it through your best first-line manager or your best rep.

This will allow you to get a sense of how other reps will perceive it or take advantage of it.

“Ask them, ‘if we made this change, how would you react?’” said Pablo. “Would it change your behavior? See what they say. Get their feedback.”

They’ll let you know how they would game it.

“Your best reps always want what’s best for the company and themselves, so they’ll usually be honest and help you understand if the plan changes will land well,” Pablo said. 

Comp plan examples

Kevin’s plan in Compensation Hub

Kevin’s plan to increase the health of early-stage companies:

Does your customer acquisition cost greater than one year? Multi-year deals can help ensure your business has lifetime value.

To lock in those multi-year deals, incentivize your reps to sell them by building accelerators into your comp plan. Every additional year after one year rewards a higher commission rate.

“We’re early stage, we’re trying to get CAC under 1 year,” Kevin said. “Until we can get our top-of-funnel more efficient and CAC in line, these multi-years are what makes the unit economics really healthy.” 

View Kevin’s Plan: Commission with Multi-Year Accelerators

Hilary’s plan in Compensation Hub

Hilary’s plan to lock out the competition:

Becoming a “category king” is often the goal of many new startups.

To help carve out your business as the category leader, consider paying AEs on a plan that includes Commission with Multi-Year Accelerators.

Longer contracts typically mean your competition can’t get to them at least until your contract is up. The more multi-year deals your team sells, the larger the impact on your targeted market, and the fewer chances your competition can sneak in to scoop your clients.

“Multi-year contracts also show that it’s a good deal,” Hilary said. “If somebody is willing to sign up and sign a contract, and really not be able to get out of it for two, three or four years, they are buying into what that rep is selling and positioning from a value standpoint.”

View Hilary’s Plan: Commission with Multi-Year Accelerators

Andrew’s plan in Compensation Hub
Pablo’s plan in Compensation Hub

Pablo’s early-stage accelerator plan: 

“For an early-stage company between zero to $10 million in annual recurring revenue, I love a flat-rate commission with an accelerator,” Pablo said. 

A plan such as Pablo’s maintains simplicity but pays competitively with the added incentive of the accelerator.

While the above modeler activates a 1.5x accelerator once the rep passes 100% quota, Pablo’s ideal plan would actually include an accelerator 2x that of the flat commission rate.

“When I worked in a public company and a private company, I never had accelerators less than 2x, and then I bumped to 3x,” Pablo said. “I love to pay those top 10% of reps a shitload.”

View Pablo’s Plan: Commission with Accelerators

About Compensation Hub

QuotaPath’s newest (free) resource, Compensation Hub, invites Sales, RevOps, and Finance leaders to discover, compare, customize, and share compensation models. Strike the right balance between pay and performance to successfully align your compensation to your business strategy.

About QuotaPath

QuotaPath provides a sales compensation and commission tracking platform for revenue teams large and small. Handling some of the most complex comp plans out there, we pair a simple user experience with a highly technical backend. QuotaPath is the only solution fit to get Sales, RevOps, and Finance all on the same page.

To see how we fit into your tech stack, check out our integrations page. To learn more, book a time with a member of our team today. 

SDR compensation plans to consider for 2023

three sdr comp plan examples

Our contributing writer and former sales development representative Cody Short authored “SDR Compensation Plans to consider for 2023.”

In 2015, I moved to Austin, TX, to start my career in tech sales. I worked at a large Fortune 500 company in an entry-level position role as a Business Development Representative (BDR). 

BDRs, also referred to as sales development reps (SDR) or market development reps (MDR), do the grunt work. They are often a prospect’s first impression of a company. Because of this, reps like myself looked to be compensated well for their work. 

In my first role as a BDR, I earned variable pay based on the Qualified Opportunity plan. My team and I had a quarterly quota that entailed bringing in nine qualified opportunities. Those nine opportunities could fall into two categories: Stage One and Stage Two, and we had to bring in five and four opportunities, respectively.

My company defined Stage One opportunities as prospects we booked for a meeting who qualified to buy the product according to budget, need, integration capability, and buy-in from the decision maker. 

Stage Two entailed everything from Stage One with the addition of another meeting booked to move the conversation forward. At the handoff between the SDR and the account executive (AE), the AE would then classify which stage the opportunity falls under.

Qualified Bonus Opportunity 

This is the type of compensation plan that I had as an SDR. A single bonus rate is applied to every qualified lead that an SDR creates. This plan allows for an SDR to get paid on every opportunity they pass on for an AE to work. The most important guideline to establish beforehand leaders involves clearly defining what classifies as a qualified opportunity.

For instance, remember Stage One and Stage Two opportunities? 

You can create something similar that is easily trackable with a scoring system. I had to bring in five Stage One and four Stage Two opportunities, and that was how my manager kept track of my success and quota. 

I like the Qualified Bonus Opportunity plan because it incentives the SDR to create quality leads for the AE. And, as a result, builds a good rapport between SDRs and AEs. 

Closed Won Commission 

This compensation plan is probably the most unpopular for SDRs. 

That’s because so much of the SDRs success lies outside of their control. In order to gain any variable pay from this, the AE must win the deal. 

As far as mechanics, this plan applies a fixed rate, or Single Rate Commission, to every Closed/Won deal that began as an SDR lead. 

One of the upsides of the plan, however, is the potential for lucrative payouts.

Example: If the SDR’s monthly quota is $50,000 at a payout of 5% of all closed/won deals, that’s $2,500 a month if they hit goal.

So, what happens when an SDR brings an AE multiple qualified leads, but the conversion rate to closed/won is 5%? The answer is in the next paragraph… 

Qualified Opportunity Bonus & Closed Won

This is the type of compensation plan that I wish I had as an SDR. 

According to Garner, the conversion rate of a qualified opportunity from an SDR to a Closed/Won deal should be at least 20%.

At that conversion rate and paired with this compensation structure, the SDR will focus on generating qualified leads and gain an extra kicker upon those leads closing. 

Winning the deal leans entirely on the AE — not the SDR. So, if an SDR hits 100% of their qualified opportunities quota, anything they make on top of that from a closed/won deal is the cherry on top! 

Here’s an example: If an SDR hits 100% of her quarterly quota, she earns $5,950 for the quarter. That’s $2,975 from seven qualified opportunities at $425 each, plus an additional $2,975 from a quarterly quota of $175K in closed/won opportunities paid at 1.7%.

Not bad. Not bad at all.

About QuotaPath and Compensation Hub

QuotaPath’s new free (and ungated) resource, Compensation Hub, allows sales leaders to discover, compare, build, and customize compensation models from 15 templates. Adjust variables to your business and evaluate and optimize comp plans to ensure they’re driving the right results. Share with your team and automate it directly in QuotaPath.

Deliver visibility, automation, and seamlessness across the entire sales compensation process by booking a demo here

The trust in your comp plan starts with its rollout

communication of compensation plans featuring 3 leaders

This blog is our third in a four-part series featuring comp plan examples for account executives from industry leaders. In case you missed our previous posts, catch up on the first and second blogs featuring six sales experts. 

Bad compensation plans leave scars.

“Compensation is part of the core foundation of trust between the company and the individuals,” said Philip Charm, Co-Founder of Climate Club

Break that trust with a bad comp plan, and you face irrefutable damage in the form of rep exits.

“For many people like me who have tried to design comp plans early in a company’s life, we have scars from the experiences we’ve seen or when we’ve been taken advantage of,” Philip said. 

That’s why it’s so important to start simple in your design, stay hyper-aware of changes in sales and customer cycles, and, most importantly, keep everyone on your team updated on their comp along the way.

How you introduce a comp plan and — any changes to it — plays a huge factor in how your reps will receive it. 

The trust in the comp plan starts with its rollout. 

compensation hub resource

Compensation Hub

Discover, compare, and build compensation plans. Customize compensation models using 9 variables.

Find Compensation Plans

After the meeting, post a draft of plan changes on Slack and let people respond to it. Be active in the comments. Look out for good ideas, because your reps will have two to three good ones, and explain why you can’t run the bad ones.

“Your salespeople deserve to know why the design is the way it is and why changes they propose can’t be done,” Mark added. 

By the time you roll it out then, there shouldn’t be any surprises. 

In addition to the rollout, Mark, Philip, and Demandbase VP of Go-To-Market Asher Mathew offered some additional sales compensation best practices. Read on for tips and three commission pay examples.

How to fix your comp plan 

Mark: Design begins at the C-suite.

Start your design at the C-level and with your board. Identify three to five strategic objectives for the company over the next quarter or year. 

“Then ask, can any of those priorities be reinforced with sales compensation design?” Mark said.

Sometimes you can’t.

“But sometimes you can,” Mark said. “And if you can, you do it. In my experience, that’s the No. 1 tactical implementation that will drive the strategic objective. Much more than the CEO saying this is what we’re trying to do.” 

Philip: Hold off on variable pay when you’re just getting started.

Philip’s tip for teams hiring their first sales rep is to not offer variable pay just yet. Instead, make it clear they’re getting a solid base salary and equity in the company.

“To me, this is a best practice,” Philip said. “It’s the best way to balance upside and downside risk.”

In setting it up this way, you’re incentivizing your rep, as an owner of the company via larger equity than a traditional sales rep, and capturing the value of that growth. 

If you go this route, know that this hire is a tough hire to find.

“This hire tends to not be from an enterprise selling background. Rather, they’re more a true business development professional,” Philip added. 

Asher: Don’t pull too many levers.

“What doesn’t work in comp plans is when you use a plan to brute-force a go-to-market motion,” Asher said.

Think about the well-being of your sales force. High-commission plans filled with incentives, spiffs, and accelerators can overcrowd a plan and backfire.

“Your reps may run really fast for a bit, but when you burn them, you churn them,” Asher said. 

He also mentioned the importance of understanding your risk profile when evaluating base to variable pay splits. The closer and more control a rep has over the conversation with the customer, the more risk they can take on in their plan. AKA: higher commission ratio.

Compensation Hub QuotaPath

“The accelerate and decelerate plan is one of the best generic models,” Mark said. “It makes the performance payout extreme.”

When a rep doesn’t do well, they really don’t do very well.

“But when you do well, you do really well,” Mark added. “It accentuates the motivation of a commission plan.”

View Mark’s Plan: Commission with Accelerators & Decelerators

Philip’s early-stage enterprise AEs plan

For enterprise reps, Philip recommends offering an OTE of no less than $225K. As far as other elements of the compensation structure, Philip said he loves the idea of an accelerator. 

However, when you’re building an enterprise team from scratch and don’t have historical data on past performance, a Single Rate Commission plan with a flat 10% on every deal works well.

This plan pays your reps competitively since they’re bringing in larger deals and gives your team time to understand the cost of sales, expectations, and payback periods.

View Philip’s Plan: Single Rate Commission

Asher’s commission-only plan

Above, Asher mentioned the need to recognize your business’s risk factor as it pertains to compensation. The riskiest of compensation plans for the rep is the commission-only plan. But for the business, that’s the least risky.

“One-hundred percent commissions is the fastest way to learn sales,” Asher said. “You get a ton of exposure and education quickly.”

In his plan, he adds accelerators that raise the base rate from 10% to 15% after the rep achieves 100% attainment.

View Asher’s Plan: Commission Only with Accelerators

About Compensation Hub

Our newest (free) resource, Compensation Hub, invites Sales, RevOps, and Finance leaders to discover, compare, customize, and share compensation models. Strike the right balance between pay and performance to align your sales compensation to your business strategy.

About QuotaPath

QuotaPath provides a sales compensation and commission tracking platform for GTM teams of all sizes. Pairing a fun-to-run user experience with a highly technical backend, QuotaPath is the only solution fit to get Sales, RevOps, and Finance on the same page for compensation. 

Check out our integrations page to see how we fit into your tech stack. And, to learn more, book a time with a member of our team today. 

4 sample bonus structures for AEs to consider for 2023

AE sample bonus structure

As much as we love sales commissions, we also appreciate strong sample bonus structures.

We’ll dive into four of our most widely adopted account executive (AE) bonus structures, but before we do, let’s first differentiate between bonus and commission.

Companies award bonuses, or a pre-determined amount of money, when a rep achieves a set goal. Sales commissions represent a percentage of the total revenue tied to a won deal. 

In practice, we might see a company pay an AE a $2,000 bonus when they hit their monthly quota of $25,000. If the company paid commissions instead of bonuses, and if it took the rep three deals to hit $25K, the rep might earn 10% of the total revenue for each of the three deals. 

Create Compensation Plans with confidence

RevOps, sales leaders, and finance teams use our free tool to ensure reps’ on-target earnings and quotas line up with industry standards. Customize plans with accelerators, bonuses, and more, by adjusting 9 variables.

Build a Comp Plan

Additionally, in some cases, companies combine bonuses with commissions, like the Commission with Accelerators and Milestone Bonus plan, which you can explore and model in Compensation Hub

But we’re not merging commissions and bonuses for today’s conversation. Instead, we’re focusing exclusively on sample bonus structures for AEs.

Below, we’ll guide you through the use cases and logistics of each one. Be sure to explore each sample bonus structure yourself in Compensation Hub.

Sample Bonus Structures for AEs

Milestone Bonus Modeler in Compensation Hub

Milestone bonus

This compensation plan pays AEs a single milestone bonus once a rep hits quota. This plan offers a variable pay package with low financial risk from the lens of the company.

One thing to note about the milestone bonus compensation plan is that reps do not earn any incentive pay until they reach quota. They only earn the bonus upon hitting target.

A structure such as this encourages reps to consistently hit quota every month while protecting the business from inflated commissions. That’s because the maximum bonus payout is the pre-determined bonus amount.

Now, do we love this plan? Not particularly.

At QuotaPath, we prefer pairing a bonus with a tiered sales commission structure that promotes overperformance. Something like this one: Commission with Accelerators and Milestone Bonus plan.

Why don’t we love it? Because of the risk of sandbagging

If a rep hits quota early in the month, they might sandbag deals until the next month. This enables them to secure the milestone bonus ahead of next month. 

To model the milestone bonus with your own business inputs, use our ungated modeler

Single Rate Bonus (Revenue) Modeler in Compensation Hub

Single rate bonus (Revenue) 

With the revenue-based single rate bonus, the bonus rate remains the same regardless if the rep hits quota.

We like this one for two reasons. First, reps understand it. It’s easy to explain, and reps know how to make money. Second, this compensation structure allows for quick adjustments that can help steer selling behaviors. For instance, you could increase the rate to motivate reps to sell a specific product or de-motivate reps from selling one when trying to sunset a product. 

To set your bonus rate:

  • Figure out how many deals you want your reps to close during the quota period.
  • Determine this by solving for how many deals your reps need to collectively close in order to reach the financial target.
  • Find the applicable bonus for your quota period. For annual quotas, this number will match your annual variable set for OTE. If it’s quarterly, divide the annual bonus by 4, and if it’s monthly divide by 12.
  • Example:
    Annual target: 10 deals per quarter
    Annual bonus: $80K
    Quarterly bonus: $20K
    Bonus per deal: $2K

Under the revenue-based single-rate bonus, not to be confused with the quantity-based bonus below, the company pays out a flat bonus for every quota attainment point earned.

This sales bonus structure works great for sales teams with quotas that change over time or for those with “busy seasons” throughout the year.

Explore the Single rate bonus (Revenue) in our ungated modeler.

Single Rate Bonus (Quantity) Modeler in Compensation Hub

Single rate bonus (Quantity)

In addition to the single rate bonus revenue-based plan is the ​​Single Rate Bonus (Quantity) bonus structure.

This one differs from the revenue one above by paying a flat bonus on every single deal regardless of quota attainment. We consider it the most basic bonus format and recommend implementing it when you have consistent contract values in place.

One thing to remember is that this plan does not account for deal discounts. That means that no matter how much or how little a rep discounts a deal, their bonus remains the same. As a result, we usually see teams discount more frequently because their variable remains intact.

In the plan pictured above, the quantity-based single rate bonus plan pays $2,500 on every deal.

Customize the Single Rate Bonus (Quantity) in Compensation Hub.

Multiple Rate Bonus (Revenue) Modeler in Compensation Hub

Multiple rate bonus (revenue)

We like this model because it rewards overperformance and gives your reps a reason to keep bringing in deals after passing goal. 

Now, if you prefer to pay a commission rate versus a revenue-based bonus tied to attainment points, check out the Commission with Accelerators plan

Thanks for talking sample bonus structures with us!

For more widely adopted compensation structures, check out Compensation Hub.

About Compensation Hub

Our newest (free) resource, Compensation Hub, invites Sales, RevOps, and Finance leaders to discover, compare, customize, and share compensation models. Strike the right balance between pay and performance to successfully align your compensation strategy to your business strategy.

About QuotaPath

QuotaPath provides a commission tracking and sales compensation platform for revenue teams of all sizes. We’re the only solution fit to get Sales, RevOps, and Finance on the same page. 

To see how we fit into your tech stack, check out our integrations page. Learn more by booking a time with a member of our team today.  

The 5 biggest takeaways from our 2023 Sales Compensation Trends survey

2023 compensation analysis

In August, we surveyed more than 300 leaders and sales reps to get a pulse on today’s sales compensation trends.

With 38 questions around sales commissions structure, ownership, and rep motivation, we aimed to uncover where organizations struggle the most. What we found was the startling realization that 9 out of 10 leaders don’t trust they have the right compensation strategy in place. 

This lack of trust spills into the individual contributor (IC) roles, where 75% of sales reps admitted they don’t trust their companies to pay them fairly. 

Below, we reviewed our biggest takeaways with immediate steps your organization can take to right your commission plan.

Base to Variable Pay split

5. The “most common” tiered commission structure

Based on the data from the survey, we built out the most widely adopted sales commission structure for SaaS sales compensation.

The components of this plan include:

  • Base salary: 50% of OTE
  • Quota period: Quarterly
  • Quota:OTE ratio: 4-7x
  • Components: Accelerators and decelerators tied to quota attainment
  • Payment schedule: The majority of companies pay commissions upon the deal closing (vs. invoice payment, or usage-based models)

For early-stage companies, sales leadership most frequently led the design of the compensation plan. That responsibility pivoted to RevOps for later-stage companies. And, at both stages, leaders introduced new comp plans most frequently on a yearly basis. 

Build and model this plan in Compensation Hub. 

Now, if your compensation plans fall outside of these trends, that’s okay.

Your plan should reflect your business, so if your sales cycles, revenue, and maturity curves don’t follow suit with another organization’s, then your comp plan shouldn’t follow either.

compensation hub resource

Compensation Hub

Discover, compare, and build compensation plans. Customize compensation models using 9 variables.

Find Compensation Plans

“If you have inconsistent plans for each person in your organization, you end up underpaying women and people of color,” said Graham Collins, our Chief of Staff.

Our VP of Sales Caroline Tarpey agreed and mentioned how standardizing plans impacts recruiting efforts.

“People crave transparency in our organizations. When we standardize these, we’re giving that equitable opportunity to the team,” said Caroline. “We’ve seen it become a tool in the recruiting process. It’s viewed as very positive across the board.”

Pro tip: Use Compensation Hub to standardize your plans for all ICs who share the same title. You can then use the Growth Curve in the top right corner to show job recruits their earnings potential according to your business metrics.

3. Reps trust comp plans built by Sales Leadership the most

Given that Sales Leaders typically emphasize what’s best for the rep versus Finance, it’s no surprise that reps trust plans designed by their leadership.

What is surprising, however, is the downward trend of reps lacking trust in plans built by RevOps. For instance, in a survey we conducted in 2020, reps had the most confidence in the plans RevOps created.

This shift tells us that RevOps can do a better job collecting feedback from their sales teams. 

Our Sr. Director of RevOps, Ryan Milligan, does this by hosting monthly one-on-ones with every member of the sales org.

No matter which department runs compensation planning, remember to keep your reps in the loop on future comp plan changes. Ask for feedback, and explain the math and the reasoning behind the different mechanics of the plan. Most importantly, share how the company will help them reach their targets.

Conversely, ICs who received plans once a year felt most confident that their pay was accurate.

So, what’s the takeaway here?

Fewer changes equal more trust.

In our experience, we see leaders issue more comp plan changes with the presence of a volatile market, uncertainties or changes to sales cycles and pricing, and shifts in strategic business objectives.

One way to get ahead of those changes, and foster trust along the way, is to come up with the business goals first, then leverage the comp plan to drive those. That means if your company introduces a new product while sunsetting another, your comp plan should pay enough on the new product to motivate reps to sell that over the existing one.

Setting expectations from the onset will also establish trust. If you think you’ll have to modify your plans throughout the year, be upfront with your reps to avoid blind sighting them later. For help rolling out changes, check out this example compensation communication plan

Pro tip: Run different scenarios and experiment with a compensation plan template and modeler in our free, ungated resource, Compensation Hub. As an example, if predictable revenue is a goal, consider the Single Rate Commission with Contract Term Multiplier plan or the Commission with Multi-Year Accelerators plan.

1. 86% of reps rank compensation as their top priority when job hunting

“Having this compensation conversation early on in the interview process is really important,” Graham said.

Your recruits will ask about it, so it’s on you to share transparently. Show them their earnings potential (feel free to use Compensation Hub’s Growth Curve as a visual). A good interviewer will ask how many of your reps actually hit their on-target earnings (OTE), so be prepared to speak to that percentage. 

Note: If your attainment is less than 80%, that may signal future changes to your comp plans. 

To ensure your base salaries and variable pay packages compete with market standards, invite your People Team to the table. They play a critical role in securing solid sales talent and will bring market data to the conversation. 

About Compensation Hub

QuotaPath’s newest (free) resource, Compensation Hub, invites Sales, RevOps, and Finance leaders to discover, compare, customize, and share compensation models. Strike the right balance between pay and performance to successfully align your compensation strategy to your business strategy.

About QuotaPath

QuotaPath provides a sales compensation and commission tracking platform for scaling GTM teams. Pairing an easy-to-use user experience with a highly technical backend, QuotaPath is the only solution fit to get Sales, RevOps, and Finance all on the same page. 

To see how we fit into your tech stack, check out our integrations page. To learn more, book a time with a member of our team today. 

The problem with complex comp plans (and how to fix them)

transparent compensation plans

This blog is the second in a four-part series featuring comp plan examples for account executives from industry leaders. To catch the first blog, featuring Liz Christo, Amy Volas, and Kevin “KD” Dorsey, check it out here

Prior to founding RevGenius, Jared Robin sold for one of the largest transportation and shipping vendors in the world. 

The company itself? Phenomenal, said Jared, while reflecting on his 7-year tenure.

But the compensation plans? Yikes.

“What makes sales compensation so hard is that people organize the plans without transparency,” said Jared. “At that company, nobody at the VP level understood how reps could get 100 percent to goal.”

That meant reps couldn’t map it out for themselves either.

“Everybody had different sized goals that combined maintaining a current book of business and net new,” Jared added. “My territory may have been $4M, while someone else at my exact level may have had a quota of $5M. Our gates were different, too.”

compensation hub resource

Compensation Hub

Discover, compare, and build compensation plans. Customize compensation models using 9 variables.

Find Compensation Plans

“You’re trying to solve for a plan that the reps understand and know exactly what they need to do to make more money and why they should bring in one more deal,” Sam said. 

So, instead of trying to model the perfect plan that accounts for every edge case, strive for simple, standardized plans that bring transparency and motivation. 

Impact on gender pay gaps

Another setback that often goes understated when it comes to complicated, non-standardized comp plans is the pay discrepancies that unfold between men and women in sales.

Lori Richardson, Founder of WOMEN Sales Pros, Harvard Business School Sales Coach, and Growth Strategist for Score More Sales, experienced this firsthand.

“Some people are just flat-out paid differently,” Lori said. “That happened to me. I found that my male counterparts were paid more, even though they had no more experience than me.” 

While Lori spoke directly to the interview and negotiation differences between men and women in sales, inconsistent, complex, non-standardized plans can also contribute to unequal pay. The more plans and mechanics across plans, the greater the risk of paying team members unfairly. 

That’s why we encourage organizations to be open (and upfront) with on-target earning potential and compensation details. 

“I’m a big proponent of putting salaries and compensation information publicly available on job posts,” said QuotaPath’s Chief of Staff Graham Collins. “It doesn’t make sense that every single person in a sales organization gets paid the exact same, but by putting a structure behind it that is widely understood and that commensurates the amount of money they’re earning with their quota, you’re making it fair.”

Fair plans

To save leaders from the instinctual reflex to overcomplicate plans that Sam called out, use our newest resource Compensation Hub

This library of 15 sales commission structures enables leaders to discover, compare, customize, and share fair and standardized plans that align compensation strategies to business goals.

Each plan includes a modeler with nine customizable inputs. Leaders can experiment with different figures to run scenarios based on historical or projected data on deal sizes, annualized quota, and more. Then, once you’ve got a plan that meets your needs, share and save it with members of your team. 

To get started, check out the plans Lori, Jared, and Sam put together below. Plug in your own inputs to see if they’d fit your business. And, for more commission structure templates, visit Compensation Hub.

View Lori’s plan: Single Rate Commission

Annual OTE: $160K
Base Variable Pay mix: 40:60

Jared’s comp recipe for renewals

For an easily understandable plan that guarantees renewals and pays reps more upfront, look no further than Jared’s plan. 

The Commission with Contract Term Multiplier plan pays a higher commission percentage when a rep signs up a customer for more than one year. This encourages multi-year deals and rewards reps accordingly for pushing for longer terms. 

A note, typically we don’t see contracts that exceed three-year terms. 

View Jared’s Plan: Commission with Contract Term Multiplier

Annual OTE: $200K

Earnings Rules: 10% rate on all contracts one year or less

    12.5% rate for all contracts greater than one year

Sam’s productivity plan

We see mixed reviews of decelerators, but one person who is a fan of them is Sam. His plan of choice is the Commission with Accelerators and Decelerators. 

“When a rep misses their number badly, it cascades upward,” Sam said. “I think it’s pretty compelling when a 10% miss on a $20M business equates to $2M. That’s why I think having a baseline level of productivity and performance like a decelerator should be baked into the comp plan.”

Do you agree? 

View Sam’s Plan: ​​Commission with Accelerators & Decelerators

Annualized Quota: $560K
Earnings rule: 0% to 50% of quota = 5% decelerator

50% to 100% = 10% base rate

100% and above = 15% accelerator

About Compensation Hub

QuotaPath’s newest (free) resource invites Sales, RevOps, and Finance leaders to discover, compare, customize, and share compensation models. Strike the right balance between pay and performance to successfully align your compensation strategy to your business strategy.

About QuotaPath

QuotaPath provides a sales compensation and commission tracking platform for scaling GTM teams. Pairing an easy-to-use user experience with a highly technical backend, QuotaPath is the only solution fit to get Sales, RevOps, and Finance all on the same page. 

To see how we fit into your tech stack, check out our integrations page. To learn more, book a time with a member of our team today. 

How to include Finance in sales comp planning

how to prepare your comp plan for finance

Sales representatives have the least confidence when Finance takes the lead on sales comp planning. Conversely, sales reps have the most confidence when Sales Leaders come up with the commission structure template.

That’s according to our “Sales Compensation Trends in 2023” survey.

We have a few hypotheses as to why, but we think the biggest cause stems from the misconception that Finance only looks out for the bottom line rather than considering what’s best for the rep.

“When the Finance team gets too involved, they tend to think about everything from just the cost perspective,” said Kevin McKeown, CRO at Beekeeper. “Comp planning usually goes sideways when someone without a sales mindset is driving the process.”

But that’s not the case here at QuotaPath.

Our VP of Finance Ryan Macia and Senior Financial Analyst Jonathan Mann shared their takes on how Finance teams can better balance rep motivations with profitability.

compensation hub resource

Compensation Hub

Discover, compare, and build compensation plans. Customize compensation models using 9 variables.

Find Compensation Plans

Start with a pre-proposal from Sales

Your comp design process starts with Sales.

Ryan and Jonathan both suggested inviting Finance into the conversation after Sales puts together a proposal.

“I prefer when Sales comes to us with options and pre-proposals,” Ryan said. “I don’t like starting from scratch. If you can come to me with some concepts that you think will motivate the team, then we can determine if it will break the bottom line.”

Bringing options and a blueprint gives Finance enough of a baseline to begin pressure testing different outcomes and edge cases.

For example, a VP of Sales presents Finance with an Account Manager compensation plan built to drive upsells and retention. However, the plan includes an upsell quota and retention target tied to net revenue retention.

See the issue?

There’s an overlap with a “double dipping” of earnings since the rep would get paid on upsells and again via net revenue retention, which has upsells included.

“In that case, I’d recommend changing net revenue retention to gross revenue retention,” Ryan said.

In doing so, this addresses what the business aims to solve for — more upsells and retention — without paying an AM twice for the same thing.

Have Sales leadership collect feedback

Secondly, leave it to Sales to collect Feedback.

Rep feedback plays a critical role in compensation plan design, but it’s on the Sales leaders to gather it from the reps — not Finance.

This will allow you to get a sense of how other reps perceive it or take advantage of it before you bring the proposal to Finance.

“Ask them, ‘if we made this change, how would you react?’” said Pablo Dominguez, Operating Partner, Sales and Customer Success at Insight Partners. “Your best reps always want what’s best for the company and themselves, so they’ll usually be honest and help you understand if the plan changes will resonate with the team.”

We recently went through this process here at QuotaPath.

After spinning up our first Business Development team and corresponding BDR/SDR compensation plan, we asked our rep about her compensation plan, which pays her out on demos set.

She shared that she’d also like to be incentivized by demos that go on to close with the sales rep. This introduces a quality component and encourages setting demos with higher chances of closing.

“We’ll take that feedback,” Ryan said. “We want to excite and motivate our reps, and we want a plan to incentivize our aligned interest.”

Navigating Commissions & Compensation Planning in a Volatile Job Market

Learn how four leaders approach sales compensation strategy to accommodate today’s economic landscape.

Download now

To help find a plan for 2023, check out our plan modeler, Compensation Hub

About Compensation Hub

QuotaPath’s newest free resource, Compensation Hub, invites Sales, RevOps, and Finance leaders to discover, compare, customize, and share compensation models. Run scenarios through 15 vetted compensation structures and strike the right balance between pay and performance.

About QuotaPath

QuotaPath provides commission tracking and sales compensation management for scaling revenue teams. With a simple UX and a highly technical backend, QuotaPath can handle even the most complex compensation plans for some of the largest sales organizations. We’re the only solution to get Sales, RevOps, and Finance all on the same page.

Check out our integrations page to see how we fit into your tech stack. To learn more, book a time with a member of our team today.

Discover, compare, customize and share comp models with Compensation Hub

compensation hub launch

After 400-plus compensation consultation calls, we understand the market’s need for more accessible and customizable compensation planning tools and models. 

That’s why we launched Compensation Hub, with 15 of the most frequently used sales plans to allow you to discover, compare, customize, and share.

Wondering what the best compensation plan will be to hit your 2023 targets? Trying to model out a plan for your new SDR team? If you have questions about the best compensation plan to meet your evolving business goals, uncover the right solution using Compensation Hub.

“Designing the perfect deal and aligning compensation to that perfect deal can be tricky,” said Pavilion Founder and CEO Sam Jacobs. “When it comes to the startup industry, the market makes it hard. People pay unsustainable rates ignoring the true economics of the business and acting like they have zero churn.”

With Compensation Hub, avoid these pitfalls by customizing and sharing your plans across Sales, RevOps, and Finance leadership.

“If you can find a plan you like, then you can quickly goal search it to your business economics,” said Kevin McKeown, CRO at Beekeeper. “It’s very cool.”

No more guessing what plan might work. 

Instead, use Compensation Hub to run scenarios based on historical or projected data and tailor a plan accordingly. Remove the uncertainties and drive efficiency across the organization to attract and retain talent. Incentivize outputs that spread alignment throughout your business.

And, most importantly, build trust and transparency across your organization. 

How Compensation Hub works

Staying true to QuotaPath, Compensation Hub’s functionality kicks off with the sales reps in mind. When using the modeler, start with your rep’s OTE, then adjust your plan’s key variables to achieve that desired number. 

For example, if you set your OTE to $180K, and your team follows a quarterly quota frequency with an ACV of $30K, your reps should average 5.8 deals per quarter in order to hit their target. That’s according to Compensation Hub.  

After setting variables that get your plan in a good spot, Compensation Hub suggests rules tied to commission and bonus rates. 

For instance, an Account Executive Commission Plan with Accelerators shows a plan featuring a two-tiered commission structure. This includes a 10% rate on all deals won between 0 and 100% attainment. Then a 15% commission rate applies to all deals after hitting quota. 

To estimate how much a rep earns overtime under the given earnings rules, check out the Growth Curve in the top right corner. Get Sales, RevOps, and Finance all on the same page regarding reps’ earning potential under a given plan. 

“One of QuotaPath’s core missions is to create alignment and clarity throughout the entire compensation process and across all departments. This starts with the very first conversations around compensation for a given role,” said QuotaPath Co-Founder and Head of Product Cole Evetts

FAQs

When should I use Compensation Hub?

Anytime you:

  • Question the effectiveness of your existing compensation plans
  • Want to run different variable scenarios 
  • Need a new comp plan (new team, territory, product, segment, etc)

What plan should I start with?

Our favorite answer to this question is “it depends,” which certainly is not the answer you seek. 

But, if you’re building out the first-ever comp plan at your organization, start simple. The Single Rate Commission is a fan-favorite of Women in Sales Leader Lori Richardson, for instance. Or, if you’re looking to push and reward reps for surpassing quota, see Commission Plan with Accelerators

A more complex plan might be in your wheelhouse for sales teams looking to change certain selling behaviors based on historical performance and new business targets. Consider the Single Rate Commission with Contract Term Multiplier if your goal involves securing longer-year contracts. 

Why is sales compensation so hard?

3 ae sample compensation plans

This blog marks the first of four in a series highlighting the challenges and solutions around sales compensation planning and comp plan examples. Our contributors span the sales industry and have experience at the startup, mid-market, and enterprise levels. 

As our Compensation Trends Survey indicated, just 9% of leaders feel confident they have the best sales commission structure in place for their business. 

Reps, too, aren’t feeling the love for sales compensation, citing frustrations over a lack of understanding and lack of motivation when it comes to their plans. Two important components considering that more than 50% of reps put on-target earnings at the top of their list when considering job options, according to our survey. 

But why is it so hard to align reps and leaders? 

Is it the poor habits of sales leaders trying to force a plan that worked at a previous company onto a new team? An oversight to leave out the goals of the individual contributors when considering those of the company? Or, is it the pressure of having to anticipate a team’s performance that comes with no guarantees?

Twist. It’s all three, and then some.

compensation hub resource

Compensation Hub

Discover, compare, and build compensation plans. Customize compensation models using 9 variables.

Find Compensation Plans

As such, leaders fail to recognize the nuances between roles and a disconnect builds between what’s happening on the front line versus what’s happening operationally.

Sales Leader, Advisor, and Coach at Winning By Design, Kevin “KD” Dorsey called that disconnect a “misalignment between people and goals.”

“You have to understand how individuals make decisions when it comes to compensation,” KD said. “The person element in the plan is where the struggle lies. The plan always makes sense in a spreadsheet, but once it hits the people, it breaks.

The ripple effects on your business and people

“Bad plans lead to reps completely outperforming expectations, someone trying to ratchet it back, and more often than not, you end up with salespeople who can’t hit their OTE, resulting in high turnover,” Liz said. 

The latter is especially crippling when sales turnover jumped 39 percent quarter over quarter a year ago over the previous three months and when sales jobs ranked as the second highest in demand role across the world, per a LinkedIn report.

So, how can you approach sales compensation in a way that promotes good selling behavior, rewards competitively, and drives your business goals? 

Liz, Amy, and Kevin shared steps to immediately implement in your comp planning process. We also feature their favorite comp plans below, which you can also check out in Compensation Hub

KD: Make it simple. My comp plans today have three drivers at most. 

Out of the 40 comp plans I’ve built in my career, the worst plan was an absolute dumpster fire. I paid off both revenue and self-generated pipeline, and your close rate. I wanted to pay them to do all the things I asked them to do, which resulted in a super complicated plan.

The second plan I ever made though was actually the best one, and I’ll probably never be able to do it again. It paid on recurring revenue based on quota attainment and it made people think long-term. 

You didn’t make a lot of money right away, but it built up over time. You were always chasing that accelerated rate because if your percentage was 12 points on a million ARR or 12 points on $50K MRR, once you got to 15%, it was a huge hump in pay. 

This plan also made it so I could tell someone where they were capped on OTE based on their churn rate. I could say, ‘You’re never going to make more than $92K in this role unless you improve the types of deals that you’re closing.’

It was so simple, and it worked so well.

Amy: You have to understand the market. 

What does the job require to do the job well? Do you even know what the job or role is? 

Most people make the mistake of assuming and don’t understand it as a result. We absolutely need RevOps and accounting involved in building the plans. It’s an ecosystem and not an us versus them. But if you’re relying on an algorithm that nobody understands, and now I need a legend to figure out how I get paid, that’s not going to bode well for anybody involved. 

 Understand how your buyers buy, what it takes to be successful, how long it takes to build a pipeline, and then start mapping that back.

Start with what is the work within the segment that’s required to do this.

For instance, my background in enterprise sales has some heavy-duty, gnarly, complex multi-threaded global accounts. It takes an average of 12 months at the very least to build a pipeline. If you design a comp plan for a commercial team, and you expect production in three months, that creates a huge disconnect. 

 Understand how your buyers buy, what it takes to be successful, how long it takes to build a pipeline, and then start mapping that back.

compensation hub resource

Compensation Hub

Discover, compare, and build compensation plans. Customize compensation models using 9 variables.

Find Compensation Plans

The beauty of reps is that they are motivated by sales compensation plans. So if you roll out a bad plan, they will find the loopholes.

Lastly, test the changes. Try new models of the comp plan without rolling out one huge adjustment. Test them in a more controlled environment and add gradual changes.

Comp plan examples

We hope you found Amy’s, Liz’s, and KD’s tips helpful. We know we certainly did. But now let’s see their compensation philosophies in action. We asked each leader to pick a successful tiered sales commission structure that they’ve implemented. 

Feel free to borrow their plans but be sure to plug in your business inputs so that it aligns properly. If not a fit, explore a different compensation plan template from the 15 structures in Compensation Hub.

Amy’s most effective plan for Enterprise AEs

One thing to keep in mind when it comes to enterprise compensation plans is that reps typically run the full cycle with the customer. This means that an account manager or customer success rep does not step in once the deal wraps.

The comp plan should match. Enterprise reps should earn commissions when securing the new account, retaining that account, and when expanding the account.

Amy’s plan: Accelerators with Milestone Bonus 

Annual OTE: $320K
Base to variable: $160K | $160K

Liz’s most impactful comp plan for Post-Series A, Series B Companies

Liz primarily supports startup teams who fall between Series A and Series B funding rounds. Although we recommend a Quota:OTE multiplier of 5x, given the stages of the companies she works with, you’ll notice her plan includes a 4x multiplier.

A sales compensation plan like this one provides flexibility to adjust the plan on a more regular basis as sales cycles change while they scale. 

This multi-tier plan includes two rates, a 10% commission rate on all deals before achieving 100% quota, and a bump to 15% after hitting the full target. Her only change would be to add two more tiers, which would add a gradual increase in commission rates as the rep moves toward the goal.

Liz’s plan: Commission with Accelerators

Annual Quota: $750K
Base to variable: $75K | $75K

KD’s “dollar in/dollar out” comp plan

KD’s okay with a decelerator as long as they aren’t super extreme. Unlike a cliff, which doesn’t pay a rep anything until they hit specified attainment, a decelerator pays a percentage. The caveat is that it pays at a lesser rate than the plan’s base rate until the rep hits the attainment level that bumps them to the base rate.

His plan does a great job of eliminating the risk of sandbagging. 

KD’s plan: Commission with Accelerators and Decelerators

Annual OTE: $175,000
Base to variable: $105K | $70K

Want to see more plans from sales leaders throughout the industry? Check back next week for three more

compensation hub resource

Compensation Hub

Discover, compare, and build compensation plans. Customize compensation models using 9 variables.

Find Compensation Plans

Check out our integrations page to see how we fit into your tech stack. To learn more, book a time with a member of our team today. 

Meet QuokaPath’s September Winner: Courtney Billingsley

september quokka winner

Every month, QuotaPath collects nominations from our customers to name a Quokka of the Month. We’re thrilled to announce our QuokkaPath September winner below. To nominate a teammate, see past winners, and learn more about this peer recognition initiative, check out QuokkaPath.

A volunteer at her core, Courtney Billingsley from Virtuous is this month’s Quokka of the Month.

“Courtney is deeply passionate about the work she does and about our customers,” wrote Samantha Lovewell in Courtney’s nomination. “On top of that, she is always willing to support her teammates, lend advice, collaborate, and goes the extra mile for everyone.”

With over a decade of professional experience in the non-profit sector, including time at the ALS Association and Boys & Girls Club, Courtney joined Virtuous two years ago.

The move makes sense when you consider what Virtuous offers, a CRM tailored to nonprofits

“Helping nonprofit organizations increase their generosity and further their mission continues to be a defining achievement of my career as an Account Manager,” Courtney said. “It’s such a rewarding experience to work with them and push their momentum forward.”

In her time there, Courtney has developed an empathetic, curious approach to her role that’s contributed to her success. 

“I work to understand the true customer challenge or opportunity and propose a solution that best services their teams in a user-friendly way,” Courtney said. 

This genuine and attentive style hasn’t gone unnoticed by her coworkers.

“She is truly a wonderful coworker,” Samantha said. 

Likewise, Courtney had nothing but praise for her teammates and credited them for her own development.

“My colleagues continue to provide new insights and encourage me to embody customer service every day,” Courtney said. “They’re helping me achieve these wins!”

More on Courtney, September’s QuokkaPath Winner

Tell us more about your volunteer work.

In this season of life, I’m working to volunteer in ways that can include my kids. This shows them the impact and importance of serving others. 

From making stockings or Easter baskets for children in foster care to volunteering in their schools directly, I love being able to include them in these activities. 

How does Virtuous embed volunteer work into its core mission?

Because Virtuous serves exclusively non-profit organizations, volunteering is a core piece of our company culture. Each month, Virtuos requires us to spend a minimum of two hours volunteering.

Just this month, the entire company came together to volunteer in a variety of ways to continue this commitment. 

What do you hope to accomplish next in your career?

I hope to continue growing in my ability to support my teammates in producing strategies for our customers and supporting each of them in being the best version of themselves!

Lastly, when you’re not at work or volunteering, what else do you enjoy doing?

When not working, I enjoy golfing, reading, and hanging out with my husband and 2 kids. 

About QuokkaPath

Like a flock of smiling quokkas, we’re happiest when our customers excel! 

That’s why we invite our customers to nominate someone from their team who has gone above and beyond. From there, a QuotaPath Quokka Committee selects a winner.

“Quokkas of the Months” earn permanent spots in our Quokka Hall of Fame. Plus, the winners, and those who nominated them, receive quokka-filled swag packs.

Congrats again, Courtney, and thank you for sharing your story!

 Nominate a teammate for October by submitting your nominations here.

About QuotaPath

QuotaPath provides sales compensation and commission tracking solutions for scaling GTM organizations. Pairing an easy-to-use user experience with a highly technical backend, QuotaPath represents the only solution fit for Sales, RevOps, and Finance all on the same page. 

Schedule a time to chat with our team.

5 takeaways from SaaStr 2022

saastr

SaaStr 2022 marked my third attendance at the SaaS community event, and, honestly, it was the best to date.

I went out to San Mateo, CA, with seven QuotaPath team members spanning Sales, Marketing, and Product. Some of those seven attended last year with me and agreed that the depth and quality of conversations far surpassed those of 2021. (Read last year’s recap here.)

You can check out my full speaking session below with guest Liz Christo of Stage 2 Capital. She and I went through compensation best practices that scale with your teams.

After a full week and many back and forths between San Mateo and San Francisco, here are my key takeaways from SaaStr 2022.

  1. Deeper conversations

We held a lot of wonderful conversations last year with people about QuotaPath, but this year, they went much deeper.

I noticed a vulnerability amongst other founders and leaders we met with and a willingness to share their growth challenges. This I credit to our product being further along. For instance, now that we have a universal API, we can partner with any company and keep the conversation going. 

  1. Executive burnout is for real

Those growth challenges mentioned above segue into my next point about executive burnout. 

The “grow at all cost” model over the past 24 months set forth by venture firms has burned out top execs. I learned from my one-off conversations at SaaStr that a lot of leaders have taken a step back into consulting roles to take a breath and plan their next move.

The reason for their exits typically landed into one of three buckets.

The first — they joined a startup that wasn’t what it was hyped up to be.

The second, they left after their startup did really well, found wealth, and took a step back. 

Or, third, they saw a fledgling company through its end and practiced “quiet quitting” until it wrapped.

While I don’t have a solution in mind at the moment, I do recognize that a mass “reset” of sorts is taking place amongst employees. The start of 2023 should be interesting. 

  1. Increased international presence

I also noticed a lot more international folks in attendance this year than in 2021, which we can chalk up to COVID-19’s presence in 2021. 

Still, it was super interesting to hear how our international industry leaders think about compensation — and especially interesting how they turn to American technologies and media for their source of truth. 

I hadn’t expected that and was surprised to hear how many international companies leverage HubSpot as their CRM. 

  1. There is no better time than now for Compensation Hub

Additionally, we already knew this, but SaaStr re-confirmed the value of QuotaPath’s Oct. 4 launch of Compensation Hub.

Everyone asked us about compensation plan design and how we think about specific scenarios. We also spoke with a lot of founders planning their first sales hires. 

After giving a broad overview of our newest free resource that models sample compensation plans based on customizable business variables, I heard a universal, “Wow that will be amazing.”

They understood the big picture and where we can take Compensation Hub.

  1. Content improvements

We had a great time and held hundreds of meaningful conversations between the eight of us, but I still felt SaaStr 2022 content from the key speakers could improve. 

Product-led growth (PLG) topics remained popular on the presentation front, and I found Mark Roberge’s particularly interesting

But overall, the content was so-so, and I’m over panels.  

I’d love to see more vetted content, especially for the key speakers from larger companies. For panels, I’d love to see a bigger effort to match people up appropriately and find really good speakers.

As for next year, we plan to return. Maybe in 2023, we can run a RevOps event centered on Compensation Hub. 

Lastly, traveling between San Francisco and San Mateo is not fun. 

I made that trip four times last week, and it was terrible. If any founder can find a way to make that commute less painful, I’m interested in learning more.

About QuotaPath

QuotaPath provides sales compensation and commission tracking sales enablement software for scaling GTM organizations. Pairing an easy-to-use user experience with a highly technical backend, QuotaPath is the only solution fit to get Sales, RevOps, and Finance on the same page. 

To see how we fit into your tech stack, check out our integrations page. And, to learn more, book a time with a member of our team today. 

About Compensation Hub – coming Oct. 4!

QuotaPath’s newest (free) resource invites Sales, RevOps, and Finance leaders to discover, compare, customize, and share compensation models. Strike the right balance between pay and performance to successfully align your compensation strategy to your business strategy.

Be the first to know when Compensation Hub launches.

Is your commission check wrong?

commission checks

In the world of sales, it’s common to receive an incorrect commission check. Most times, it’s not done on purpose, but instead, a mistake occurred along the way. The challenge becomes finding out where and when the error happened, who will fix it, and how to avoid the issue in the future. 

The most common commission error stems from the manual entry of commissions in spreadsheets. Compensation changes, non-standardized compensation plans, lack of transparency, and commission payouts taking a backseat to the standard paychecks also lead to more errors. 

We recognize these issues. We’ve experienced them first-hand and understand how errors within the commission tracking process can lead to inconsistencies and ultimately incorrect commission checks. Our software solves inaccuracies by automating and calculating commissions in real time based on the data that’s in your CRM. Automation makes commission tracking more accurate and transparent for everyone involved in the compensation process, reps included. 

Speaking of reps, when compensation mistakes bubble up, it’s, unfortunately, the rep who bears the burden the most. And that burden takes form in an incorrect commission check.

For those not using QuotaPath (yet), we tapped one of our account executives to offer his guidance on how to check if your commission payment is correct. 

Meet Travis Longden.

He’s worked in sales since 2013 and specifically SaaS sales since 2016. He’s experienced a few incorrect commission checks before, but he’s always had a system in place to double-check the numbers. 

Your Guide to Setting, Calculating and Tracking Sales Compensation

Design and execute a compensation strategy that rewards and motivates your reps, aligns to business goals, and drives revenue.

Download the free ebook

Outside of cross-referencing your numbers through a spreadsheet, what other steps have you taken to check the accuracy of your numbers? 

Once that mistake happened the first time, I began auditing my paychecks as well by going back through to identify any errors. Outside of spreadsheets and calculations, there’s no real way to audit anything like that. At my previous employer, we had a couple of other sales tools that would have features as to when deals shipped or counted toward my commissions. But honestly, the tool was so complex that putting the time in didn’t warrant the effort into doing it, unless I knew there was a huge difference in my check. 

When you first joined QuotaPath were you still double-checking your numbers? 

It took about 3 months for me to realize I can trust QuotaPath’s commission tool without having to double-check my numbers every week.

How has QuotaPath helped you understand your commissions compared to past processes?

QuotaPath helped me see real-time capabilities. When I close a deal, I can immediately see how it impacts my numbers. With native integrations that update my deal information directly from the CRM, QuotaPath will accurately reflect the deal data. 

About QuotaPath

QuotaPath helps businesses automate and calculate commissions without error while delivering transparency and consistency to earnings data. The easy-to-use dashboard shows Sales, Finance, and executive team quota attainment, commission goals, and to-date and forecasted annual recurring revenue. To see QuotaPath’s real-time analytics, check us out by booking a demo with our team.