This is a guest post from Cody Short, Community Specialist at Shipt. Interested in writing for us? Contact info@quotapath.com.

The term “sales and marketing” are married to each other for a very specific reason. It’s all about business growth! One can not exist without the other. A company’s marketing team relies on the sales team to effectively pitch the product. The sales team relies on the marketing team to be able to position the product. As a sales rep, it’s easy to forget the work that the marketing team already has done for you and how you can utilize those assets when trying to reach quota. Here are 5 marketing tips that can help you reach your quota!

Know your target audience

This sounds simple, but that’s because it is. One of the first things a sales rep learns when pitching a product is knowing who the product is for. If you’re having a conversation about the product with the right person, then your one step closer to closing the deal! The company’s marketing team are the experts on what the customers think, buying patterns, and location. While they’re gathering that information about the ideal buyer persona they’re also keeping track of industry trends and competitors! Direct marketing can be a powerful tool for promoting your content and engaging with customers on a more personal level, allowing you to build relationships that will convert prospects into loyal customers.

Go after the leads

When I was a Sales Development Rep (SDR) my favorite leads were the inbound leads, for obvious reasons. The inbound leads are the direct results of marketing done right! Obviously, inbound leads don’t lead to a 100% conversion rate, but they can almost guarantee at least one conversation. Then, if you’re able to pitch the product well, the possibility of a second conversation can happen. If you’ve booked a demo with the right contact, but the conversation ends afterwards, that contact can be used as a lead in the future. Always circle back to those people you’ve talked to before and continue to nurture those relationships. Part of nurturing those relationships is making sure they’re subscribed to your company emails so that they’re at least receiving free information on product updates and even industry trends. Which leads to my next point…

Read the marketing content

Your company has created so much content to lure in those prospects so you can have the warmest leads! The content that’s been created usually positions the product, making it easier for you to sell it. Take a line or two from the blog, webinar, podcast, or Instagram post to help your prospect understand how the product can be useful to them. Not only does reading the marketing content help you understand how to talk about the product, but it’s also a good way to keep up with industry trends. Utilizing a website’s chatbot is also a great way to know a business and learn more about its product.

Utilize social media

Depending on the industry you’re selling to, some social media platforms would be better to use than others. For instance, if you’re in the healthcare industry, Twitter is a great platform to utilize. If you plan to engage more audience, you can use Instagram, download lovely free photos, modify them with Picsart’s AI photo editing software, and share about your company. Developing a website is always a great idea; it does not require huge expenses if you have outsourced web design and SEO. If you’re in tech, LinkedIn is the best! Since LinkedIn is a professional networking site, it’s generally used by most sales professionals, no matter the industry. So if you haven’t started using social selling for your company’s product,  LinkedIn is a great place to start, plus they provide the tools to assist in creating leads and even export LinkedIn search results for sales outreach campaigns. You can also use a LinkedIn automation tool that allows you to automate such processes as sending invites and messages for a more efficient outreach process. 

Know the brand

What is the thing that stands out about the product you’re selling? How does your company market that niche or unique thing about the product? ALWAYS talk about that! Driving home that one (or two) unique factors about the product can help further the conversation down the sales funnel. It also helps you sound like you know what you’re talking about and that you’re aware of the needs of the prospect.

Reaching your sales quota is always the goal, and can sometimes feel out of reach. It’s easy to forget about the resources that are made available to you when only using the traditional sales methods. Remember, the sales and marketing teams work hand and hand together. If you follow these steps, utilizing the marketing team’s information then you can become a better salesperson, consistently reaching your quota!

Today we’re introducing a new section of our app called Payouts, and humble brag: it’s awesome. We think so and our early beta testers do too. We’ve heard everything from, “This is AMAZING.” to “Totally game-changing.” and “I love the exports.” And even a few expletives. ???? 

Payouts is a feature built with Sales Ops, Finance, and Accounting in mind. When we think about running payroll, there’s a lot of pain points that organizations experience when paying their reps. 

• Organizations lack a place where they can store their team’s payout records. 
• Payouts are handled in spreadsheets, so there’s no way for everyone to have visibility.
• Reps only see their total earned amount and don’t know what deals they are getting paid out on. They lack insights into when their commissions will actually be paid out.
• There’s no clear audit trail.

Payout is solving for all of these.

Let’s dive into some of the capabilities of this dynamic and collaborative feature.

Auditing, confirming & processing payouts

Clear audit trails make it easy for Sales Ops to review and approve deal earnings. We made this actionable and motivating. Our goal is to “Inbox Zero” your commissions, giving your team visibility into when they’ll get paid while still maintaining a level of control. 

We know it’s hard to run commissions when deal data isn’t correct. Transparency means less work for Ops and more ownership for reps. Reps are incentivized to keep their CRM data up to date so there’s less overhead and more efficiency.

Scheduling payouts for your team

A seamless handoff to the Finance and Accounting team simplifies scheduling payouts. You can create multiple payouts on specific dates or installments to be paid over a period of time.  Clawbacks make it easy to catch overpayments or resolve earned amount issues. If you need to create rules based on client agreements like paying 50% upfront and 50% when the client pays, it’s easy to do. It’s flexible and we provide options for payout schedules.

Plus, reps have their own dashboard to see what’s been scheduled for them and any earned amount that hasn’t been scheduled yet. They’ll know exactly what’s on their paycheck and its deals.

Closing the books

Clean record keeping is important for Accounting. With Payouts, you’ll have an organized and easily navigable view of payout records and their relation to rep’s earnings.

We offer easy exporting to run payroll. You can filter exports based on time, plans, payees, or export all data by rep and enter the data into your payroll processor. Close the books for the period, and you’re done!

Payout records & reporting

Where we really differentiate from other commission tracking softwares is the ability to report payouts by Path. Since plans in QuotaPath are composed of Paths, which are different categories or components of a sales compensation plan, this allows us to uniquely report on the types of commissions being paid out. For example: commissions vs. bonuses, new business vs. renewals, or 1-year deals vs. multi-year deals. This is helpful for Finance to know what they are paying for each of the different types of revenue. By the way, if you plan to have more advanced knowledge and be certified, browse for CPA certification practice and become your own expert.

Made to fit your commission process

Think about it in terms of your company’s journey with commissions and payouts. Let’s say in a normal cycle month, commissions are run on the 15th. 

• Sales Ops can approve deals and audit data before handing it off to Finance.
• On the 15th through the 20th, Finance has easy access to the team’s deals, earnings, and payout records. They can schedule out payouts for the 30th. 
• Prior to the end of the month, reps can go in and double check for accuracy. 
• Finance can export the data so Accounting can run payroll through their payroll processor.

To sum it up, QuotaPath is the very first product to connect earnings all the way to payous, rooted in sales reps visibility. 

Are you ready to get payroll done right? Are you looking to quit wasting time & money on inaccurate commission calculations? Then Payouts is for you. Take a deeper dive into how it works. Or give it a spin with a 14-day trial, all for free.

You’ve probably heard of sales performance software at some point in your career. You may even have colleagues who’ve mentioned their own installs have come in handy. But what does the software actually do, and more importantly, is it worth it?

What is sales performance software?

Sales performance management software helps salespeople and those in leadership positions track a number of sales metrics related to their department. Depending on the platform, this can include:

• Number (and value) of sales
• Length of a sales cycle
• Average contract value
• Incentive compensation
• Total sales compensation
• Quota attainment

All this data can be used for various purposes, nearly all of which contribute to overall efficiency and efficacy.

Key features and benefits of sales performance software

The main benefit of using sales performance software is the ability to monitor sales performance and progress. Automated tracking removes all the guesswork and the capacity for human error.

Imagine you’re loading information into a spreadsheet by hand and relying on manual calculation. One numerical mistake or incorrect entry and every resulting outcome is skewed. Sales performance software paves the way for unparalleled accuracy.

There are other key benefits for your business, too.

Transparency

Forget black box data. Keeping your team in the dark regarding their own sales accomplishments makes people feel uneasy. It’s no surprise that anxious, worried people tend to underperform.

The shared dashboards found on top-tier sales platforms enable everyone to have powerful insight. Your team knows where they stand personally and sees how they’re performing in relation to their coworkers. This can be a major motivator.

Identifying focus areas

Armed with vital information generated by sales performance software, salespeople can focus on strengthening their attributes. The software proactively identifies individuals or processes that need improvement. Now you can steadily collect data to help mentor your team or advise training to achieve better results.

Metrics & reporting

Speaking of metrics, those all-important numbers are easy to find using sales performance software. User-friendly interfaces make reports available at the simple push of a button, and C-suite executives can take a look at will.

How sales performance software can improve quota attainment

Perhaps the best aspect of sales software is the power to fuel growth and inspire everyone to meet the team’s sales goals. Depending on the data, you may change your best practices and create a new plan for growth. Or, you may decide to reward the top performer or create a more targeted campaign for a new product.

Set and track personal and team goals

Important for obvious reasons, goal tracking helps everyone keep the big picture in mind. Review relevant metrics and set goals specific to each individual. Remember, salespeople have different strengths and weaknesses which is why blanket approaches to motivation are underwhelming.

Perhaps you have a team member who is great at warming up leads but has trouble closing. Maybe there’s a newer salesperson who struggles with an overlong sales cycle. With the right software, you can see what these pain points are and set goals designed to nurture improvements.

Help manage the pipeline

Sales pipeline management is the practice of being hands on (or at least eyes on) through every stage of the sales cycle. And this applies not only to one sale but to the entire team’s active and prospective deals.

With a dashboard that displays everyone’s status, you can quickly identify what needs attention ASAP. You can also see what was accomplished in a certain time period. Perhaps more importantly, you’ll see what will be hitting the P&L sheet in the coming days, weeks or months.

Gain easy access to historical sales data

If you want to make accurate sales projections, you need accurate data from past sales periods. This data can tell you a lot about sales cycles and engagement. Review activity by season, month or territory, see which are more active and track information about specific products or salespeople.

Why QuotaPath is the top sales performance software

Sales experts skillfully designed QuotaPath to be the sales performance software your team has been waiting for. Using the QuotaPath platform, you can:

• Understand individual and team earnings and monitor quota attainment
• Align your whole sales team to track performance, results and revenue
• Integrate with existing CRM tools, such as Salesforce and HubSpot, to pull in deal data automatically

All this and QuotaPath is easy and inexpensive to set up and implement. No cumbersome interfaces with a giant learning curve, and no budget-busting onboarding fees. Just expert software that works for your department, your team, and the powers that be.

For more information, reach out to our team, or book a demo and see how QuotaPath can work for you.

Software as a service, better known as SaaS, is one of the fasting growing sectors in technology. Thanks to a sharp increase in the number of people working remotely, cloud-based software is becoming a crucial part of professional success. As a SaaS salesperson, it’s your job to help prospects understand why SaaS matters and what it can do for them. That’s how you earn your SaaS commission. But how do you know if you have the skills to succeed in SaaS sales?

Nothing can determine 100% if someone will be good in this area of sales. However, there are some traits that most of the top SaaS salespeople we know have. And surprise — experience isn’t one of them.

Integrity

Here are your first words of wisdom for today: Churn is the enemy of B2B sales. Selling software as a service is selling an experience. You need to be authoritative, trustworthy and confident. Without these three attributes, you’ll lose customers because they’ve lost faith in you. When customers cancel their subscriptions or opt-out of renewal, that’s churn.

Salespeople who exhibit integrity are truthful and honest about what their tool does. There’s no fibbing about functionality or promising features that don’t exist. That approach doesn’t work because time eventually proves those tales to be false, and the customer knows you’ve misled them.

Sell leads on what a tool really does and how it speaks to their needs. Make truth and integrity your foundation, and the deals will follow.

Curiosity about B2B SaaS sales skills and beyond

Knowledge is power, but no one wraps up sales education and hand delivers it. It’s easier to make a sale if you know about your business and customers. But you have to put forth the effort to gather and take advantage of that information.

Podcasts and books

Load up your smartphone with sales podcasts and audiobooks about B2B sales. Play it anytime you’re stuck in traffic or on the treadmill at the gym. Even prepping dinner or folding laundry at home is an opportunity to soak up some more info.

Know who you’re working for

Learn about the history of your company, its mission statement and its vision for the future. Understanding these things helps to position yourself and your division as a department consumers can trust. Remember integrity? It comes into play again here.

Learn your SaaS product inside and out

You need to know how your SaaS solution works. That means understanding the specs and using the software repeatedly until you can demo like a pro.

If you come off as confused or uncertain, how can the customer have any confidence the software will work for them?

Get to know your audience

At the end of the day, you’re not selling software — you’re selling a solution. Most prospects, B2B or B2C, aren’t looking for a specific item but rather something that addresses their pain points. Whether they need help managing orders, scheduling staff or facilitating team projects, you can frame your product as their answer.

At the end of the day, the more you learn, the better you are.

Grit

In sales, you’re always going to hear “no” a lot more than yes. From cold phone calls to demos, you’ll put a ton of work into warming up leads and attempting to close deals. Too often, your efforts fall flat. That’s sales. Honing your skills may boost your close percentage, but if you don’t hear no, you’re not taking enough risk. It really is as simple as that.

The key is to keep pushing through. Don’t take losses personally. Use every no as an opportunity to examine what you could’ve done differently. Notice we say “differently” and not “better.” Hearing no isn’t a failure.

There are a plethora of ways to approach SaaS sales. Maybe you used the wrong approach. Next time, you’ll know how to tweak your presentation when you encounter a similar audience or pain point. Or, maybe it just wasn’t a good fit. Not every product works for every prospect. Being an ethical salesperson means realizing that sometimes it’s just not going to happen and you need to stop pushing.

Selflessness

Speaking of letting go, a good salesperson learns to put everyone else first. The customer is obviously paramount because without them, we have nothing. But you also need to be a team player. Work as a unit to achieve widespread customer access. Accept critiques in the spirit in which it is intended. Offer positive reinforcement to your coworkers or employees to help recharge their batteries in between pitches.

Many industries work off the idea that a rising tide lifts all boats, but this premise is often forgotten in sales. It’s not surprising. So many sales metrics focus on individual achievement.

How:

• Much is Salesperson A selling?
• Many leads are they bringing in?
• Long is their sales cycle?
• Many demos are they scheduling?

A great salesperson remembers that everyone’s numbers matter, not just their own. Sales managers can help by reframing the importance of teamwork and rewarding employees who look out for more than just themselves.

Improvement focused

There is no “done” in sales. Want a career in which you can settle back in your chair, put your feet up and admire your accomplishments? Look elsewhere. Great salespeople are focused on improvement, sometimes to the point of obsession. That’s where gamification comes into play as a fantastic motivator. Because salespeople want to get better and achieve more, they’re eager for inspiration and specific targets to boost their numbers.

Even a 1% improvement each day leads to meteoric growth.

Competitive

And here we have one of the most recognizable attributes of a stellar salesperson — competitiveness. They want to outpace their own numbers and everyone else’s. The trick is to enjoy competition in a healthy way and not to a negative extent. “Winning at all costs” isn’t really winning. Hurting others to score a deal isn’t a smart way to go, either.

A positive competitive nature makes sales fun. You get to enjoy the camaraderie that comes with challenging your office buddies with who can set the most appointments for that week. You get to see the glint in your employees’ eyes when you set a sales quota for your SaaS reps. These goals fuel hard work and progress, but only if they’re done with positivity and respect.

Organized

Do you know what’s truly awful? Knowing you have a lead on the hook and realizing you can’t close because you misplaced a vital piece of information. Or maybe it’s time for follow-up calls with your existing clients, and your CRM is a mess. Organization isn’t some finicky undertaking that wastes time. It actually saves time by ensuring all the data you need is positioned where you can find it.

Keep your desk and digital workspace organized, and it’ll be easier to organize yourself, too. Set a schedule that helps you remember when to send those “touching base” emails or know when a client’s subscription is up for renewal. Your life will be easier, your team will function better and you’ll serve your clients sufficiently. Win-win-win!

Coachable

Coachable salespeople can take feedback well. They don’t push back when encouraged to try a new approach. This is important because there are so many different ways to nurture leads, entertain prospects and close a deal. You cannot choose one method and expect it to work in every situation.

Many of the characteristics above work best if you’re open to mentorship. If you’re competitive, expert coaching can help boost your numbers and come out on top of department challenges. When you’re curious, your coach can teach you about tried-and-true sales techniques as well as innovative approaches that could change your entire client-facing dynamic. If you want to be more organized, you can learn from your coach how they run their calendar or schedule follow-up calls.

Be open to help, and try recommendations even if they make you feel a little uncomfortable. You may be surprised.

Creative

Lastly, a strong salesperson embraces a creative mindset. They’re willing to try new things and even run experiments to see what helps them sell the most and convert leads faster. This might mean doing A/B testing, which involves taking two different approaches to selling new software and seeing which hits home.

If you deal with tons of emails, try toying with subject lines or personalization. Or, you might create different scripts, depending on which channels your leads came from, such as social media, direct mail or PPC ads.

Being creative in sales is like learning to paint with color when you’ve been stuck with a purely black-and-white palette for years. It’s a gift, and it’s one that can benefit the entire team.

A big part of personal growth in sales is understanding where you are so you can decide on new goals. QuotaPath can help. A unique combination of accurate commission tracking, easy compensation management and a personal sales journal puts improvement at your fingertips. For more information, sign up for a free account today.

Sales are lagging. The average sales cycle is so long that you’re breaking all the wrong kinds of records. And as for team morale, well, let’s just say it could be better. When your sales metrics are sinking, it’s time to learn how to increase motivation. These 20 expert tips can help.

1. Celebrate wins

If you want your team to be a success, make sure they know how many wins count. And not just the big wins, either. While there’s no need to start throwing a party every time someone picks up a lead, it’s important to recognize achievements when they happen. Give a public shout out to team members hitting sales quotas, and deliver bonuses to those shortening the sales cycle. Then watch others strive to join in on the fun.

2. Foster a culture of recognition

While you’re celebrating wins, incorporate other forms of recognition until weekly shout outs become commonplace. These don’t have to be major monetary prizes or even a prize at all. Maybe you’ll mention a salesperson who scored a major deal in that week’s company newsletter. Or, you’ll start every Monday morning meeting with a round of applause for the employees who hit quota the previous week.

3. Learn how to increase motivation with goal setting

People with no idea where the target is won’t know where to aim. Setting goals gives your team members purpose and helps quantify progress and track improvement. Goals should be SMART: specific, measurable, attainable, realistic and trackable.

4. Stay healthy

Motivation won’t matter if your team lacks the energy and mindset to formulate and execute a plan of attack. Encourage them to get enough sleep, stay hydrated and take breaks. You can also facilitate health by taking engaging steps, such as holding weekly yoga classes and giving everyone a branded water bottle.

5. Invest in the right tools

Make sure you have all the tools you need in your tech stack. For instance, software that supports team collaboration can keep coworkers connected even when they’re on the road or working from home. Then there’s QuotaPath, which makes tracking commission and other data points easier and more accurate than ever.

6. Keep your data clean

Data hygiene is crucial. By keeping your CRM data clean, you allow for greater efficiency and remove barriers that could otherwise prove frustrating for your team.

7. Build team-wide trust

Build trust amongst teammates, and they’ll work better together, and better for you. Take a look at team-building exercises, but also take the time to understand how your teammates work. Actively tackling communication gaps, especially between managers and subordinates, is also vital.

8. Regular 1-1 coaching sessions with managers

Want your salespeople to improve? Hook them up with mentors and make those meetings routine. When you remove the ability to opt-out, you ensure everyone gets access to valuable guidance — whether they think they need it or not.

9. Team training

The team that learns together wins together. Colleagues can motivate each other by sharing strengths and spotting weaknesses. Look to call recordings and group critiques to boost accountability and motivate the masses.

10. Conflict resolution

Distractions only serve to take the team’s eye off the prize, and drama is the biggest distraction of all. Use mediation and no-tolerance policies to stop bullying and infighting in their tracks.

11. Track performance

Knowing the exact status of professional success can be majorly motivating. If you’re doing well, you’ll want to keep that up. If you’re not, you’ll want to make changes to improve your commission and standing. QuotaPath tracks personal and team quota attainment and earnings, letting employees forecast potential earnings so that they can adjust performance on the fly.

12. Be transparent

Secrets are no fun, and they certainly don’t help anyone. As a sales operations manager or other supervisor, it’s your responsibility to be upfront with expectations. Transparency is how your team understands your expectations and learns how to grow.

13. Make new team traditions

Inspiring employees to be a part of the greater good — the company’s good, in this case — only works if they feel like they belong. Establish new team traditions and watch camaraderie swell.

14. Create a positive working environment

Research shows that highly engaged teams are 21% more profitable. Infuse your department with positive vibes that reach even those employees working from home, and you’re sure to reach your goals.

15. Choose to be a role model

No one’s expecting leadership to be perfect. But you can’t ask your team to do as you say, and not as you do. Be an example of how you want people to act, connect and hustle, and they’re more likely to do the same.

16. Focus on time management

One out of every eight phone calls will need repeating because of missing information.

Ten minutes of daily planning could save as much as two hours of time later on. On a typical day, office workers log onto social media a staggering 77 times and check their digital inbox another 50 times. All these infringements add up. Find ways to make your team more effective and efficient so everyone works smarter, not necessarily harder.

17. Make it fun with gamification

Sales is innately competitive, so it only makes sense to capitalize on the spirit of competition. Gamification uses games — hence the name — to help make selling fun.

18. Keep a positive mindset

Moods are contagious. If you’re angry, upset, frustrated or otherwise marinating in negative emotions, your team is going to feel that tension. Plus, it’s just bad for your health. On the other hand, intentional positivity could inspire your staff to be just as cheery — and prospects will pick up on the good vibes.

19. Face your fears

Being in sales can be terrifying, especially if you’re afraid of hearing the word “no.” It’s normal to have a healthy fear of losing a sale or falling short of the quota. But sometimes tackling those fears is exactly what a salesperson needs to reach the next level. Consider those weak points when setting goals and encourage everybody to work on whatever aspect of sales scares them most.

20. Never lose sight of the big picture

It’s wonderful to learn how to increase motivation and create programs that galvanize your entire team into action. But as you’re focusing on stirring spirits, don’t forget about the big picture. A successful sales department or company is more than meeting a quota or achieving a short sales cycle. Strategy, connection and metrics all help move your team forward.

Need help keeping track of it all? QuotaPath is a powerful sales tool thanks to capabilities that include commission tracking, compensation and more. To see how commission automation can help motivate your team, book a demo today.

Many businesses regard employee evaluations as standard practice, but some studies indicate that not all reviews are created the same. In fact, taking the wrong approach to employee feedback could actually have the opposite of the intended result. To get the most out of your team, it’s crucial to understand the reasoning behind regular employee evaluations. This includes learning how to run them and investigating what tools can help make the process remarkably painless.

Why run employee evaluations?

Employee evaluations are like organizational State of the Unions, albeit on an individual basis. It’s a way for leadership to check in with staff. It’s easy to view these sit-downs in a negative light, especially if you’re on the employee side. No one wants to face a barrage of criticism, even if it’s intended to be constructive.

But the truth is that, when done properly, employee evaluations are a valuable opportunity for all involved. Sales managers and operational supervisors can check in on each member of the team without distraction. They may talk about recent sales performance and/or set expectations for the future. It’s a way to get everyone on the same page and ensure that cohesion carries forward.

These “touch base” meetings also offer insight to how employee performance and the employee’s perception of their performance are matching up. For instance, an employee who views themselves as a chronic underperformer may be letting stress and doubt derail their potential. Painting a more realistic picture and offering guidance could help prevent burnout.

How to run an employee evaluation

There are five main parts to a typical employee evaluation in sales. It’s a good idea to use this guide as a framework to build out feedback sessions that feel thorough, fair and equitable. That said, also focus on simplicity. If you need to discuss non-performance-related issues, schedule a different meeting for that purpose. Is middle management or someone new to a supervisory role leading the employee evaluation? Consider offering some training on how to have meaningful conversations. This could include role-playing, courses on communication and using a list of approved criteria or questions as a starting point for the sit-down.

1. Set the meeting

The first introduction to your company’s employee evaluation system should be made when a new employee is hired. The onboarding process should include a look at when reviews are conducted. You may choose to do a 30-day evaluation of every new hire followed by periodic evaluations — say every six months — thereafter. Or you may conduct all team reviews twice a year regardless of when each employee came on board. The important thing is to be transparent.

As review time nears, it’s nice to send employees a reminder, so they can get prepared. Reinforce the idea that an evaluation is normal and nothing to be scary about, and that it’ll only last about an hour.

2. Gather key data

Sales reviews are based on numbers, so take some time to gather necessary data such as:

• Close rate
• Prospecting numbers
• Sales numbers
• Average contract

You’ll want to know where the employee stands in general terms and how they compare to others on the team. There are also likely key metrics and numbers that are specific to your organization. Don’t worry about having too much data before your call, there’s really no such thing as being overprepared. However, know that it’s possible to overwhelm someone with data if they’re not a data-minded person.

3. Share the data with the employee

Remember, evaluations are not a trap. The contents of the conversation shouldn’t be mysterious or come as a surprise. Part of the transparency discussed above is sharing all relevant data with the employee before the review. This gives them a chance to look over the numbers and formulate any questions or explanations they may have.

Also, ensure you ask the employee what additional data they’d like to discuss during the employee evaluation. There might be something that you’re missing or something that the employee values that they want to share with you. Their performance should not be a mystery.

4. Discuss the data

Now that everyone is equally informed, it’s time to talk about what those numbers mean. While the employee may know their own close rate, they may not understand where they fall when compared to their colleagues. Talk through any concerns with an emphasis on ways to improve. This may mean offering up mentorship or moving straight on to the next step: setting goals.

It’s also important for you to have a near perfect grasp on how you gather the data, what it means, and what good performance looks like.

5. Review old goals and set new ones

If this is the first performance review, you’ll be spending a lot of time talking about goal setting and plans for growth. Otherwise, it’s good to split the time up into both reviewing and setting goals. This way, it’s easy to see whether the employee is acting on previous advice and answering direct challenges. You may want to change their focus to improve a different skill or up the ante with a harder target to really fuel their drive.

When setting goals, ensure you set SMART goals. SMART goals are Specific, Measurable, Realistic, and Timely. Especially for a salesperson, setting unrealistic goals that can’t be measured is poor management.

How often should I run employee evaluations?

There is a plethora of opinions on this topic. As mentioned before, it’s usually a good idea to conduct at least one employee review soon after hiring and onboarding. But some experts recommend conducting frequent reviews throughout the early part of an employee’s tenure. So while your salesperson is ramping, you should run employee evaluations every month.

Then, after everyone gets to know each other and the employee gets in a rhythm, the reviews can move to a quarterly schedule. This switch often happens around the 9-month mark.

Top tools for running employee evaluations

Getting ready for an employee evaluation is a demanding process. Supervisors already tasked with a number of important responsibilities now have to put considerable effort into gathering and analyzing data for each employee. Depending on the size of your department or team and the breadth of the review, preparation alone can be a full-time job.

From quota attainment and sales numbers to income and incentive compensation, QuotaPath tracks and records key data so you can better serve your company and your sales reps. Resources like MyPath can help salespeople stay organized and track their own historical sales data, too. Combine that with commission tracking and other crucial management tools and your QuotaPath custom workspace could be the key to boosting team efficiency and employee satisfaction all year long.

To see QuotaPath in action, sign up for a free trial today.

Of course everyone tracks quota attainment and overall sales. However, there are a lot of sales metrics out there. We asked a group of sales experts what they think will be the most important sales metrics to track in 2021. Here’s what they had to say.

Heart and commitment

“I believe that the most important sales metric is something no dashboard or CRM could ever measure. It’s heart and commitment. 

How much heart do you have, how much commitment do you have to being 1% better at 1% of the job each day? How willing are you to practice and drill your weaknesses?

If you’re looking for something more traditional to measure it’s how many open-ended questions do reps ask? Who, what, where, why, when + TED questions (tell me, explain to me, describe to me). This number has a direct correlation to major success!”

Matthew Bigelow, Senior Director – Sales Execution at WalkMe

Number of contacts for a closed sale

“For me, the number of contacts you have to make for each closed sale is a vital sales metric. Sales all boils down to how many initial contacts and activity you have to make to generate 1 sale.

If you know this then everything else can fall into place.

It determines the quality of your leads, how well you are qualifying, following up – everything! Many people use the vanity metric closing ratio but that’s assuming you have a qualified opportunity to begin with. There’s loads of work to be done before that!

Once you know how many contacts and how much activity you need to make on a daily basis then you can scale accordingly. Armed with this figure you can then map out your entire sales process and then ticker and improve each stage and see what impact it makes to your overall ratio.

This metric takes into consideration your whole sales process and not just an element of it. I recommend that you then create a number of sub sales metrics to work throughout the process.”

Sean McPheat, CEO of MTD Sales Training

Service billings

“In addition to revenue generated and service booking, service billing is yet another important metric, especially for professional services companies.

This means that the salesperson is not only promising a solution to the problem but also is involved in the delivery and account management as well and also is dedicated to getting things done for customers.”

Houman Asefi, Sales Strategy Executive

Client satisfaction

“Tracking the company’s goal progress is very important. But measuring your client’s satisfaction as well as keeping in touch with your employees will also change the game of sales metrics. It’s valuable to know the customer’s feelings toward your branding and marketing. Of all people, your target audience is the one who can make or break your sales. The counterpart of this is your employees’ performance who could arise or eliminate your competitors. *It’s good to have sharp-eyes in planning and creativity creation, but being watchful to your people leads you to a high level of success.”

Robert Johnson, Founder at Sawinery

Forecast accuracy

“In my personal opinion, forecast accuracy is the most important sales metric. It shows the sales volume estimation which a business can expect to accomplish within a certain period.

Accurate sales forecasts result in a more efficiently run business and sound investments. However, they are primarily an indicator of how well does one understand their customers, and how commanding they are of their pipeline portfolio.

Recommended deviation of forecast accuracy should be normally about +/-5 percent, but it may vary from business to business.”

Martin Seeley, CEO at MattressNextDay

Below the funnel

“There are several aspects of ou company’s sales results that I run analysis on weekly, monthly, and quarterly to see trends, make cash projections, etc. One area that a lot of people tend to overlook in sales analysis is actually below the ‘’bottom of the funnel’’ – how many of your existing customers are paying you more money than last month and how many of your current customers are paying you less. 

Looking at churn by customer type can also give you great insights into what kinds of customers are the most valuable to the business over the long run.”

Tim Clarke, Director of Sales at SEOBlog.com

Opportunities created and win rate

“The two sales metrics I most rely upon are monthly opportunities created and opportunity win rate. 

Opportunities created provides a good gauge on meaningful top of funnel health versus vanity metrics like social media impressions. 

Opportunity win rate then tells me how strong my value proposition is and if I need to address our conversion strategies & tactics.”

David Garcia, CEO at ScoutLogic Screening

Referral generation

“The number one sales metric to track, hands down, is referral generation. Often salespeople will complain about lead quality, but they are really saying that they want hot leads. There is no hotter lead than a referral because the referrer has already sold them by the time they come in. Furthermore, their cost per accusation is much cheaper as well, and if one sale equals two, you dropped your CPL for the other lead as well. 

When we started focusing on referrals, our appointments doubled, without one extra dollar spent on marketing. Referrals. Referrals. Referrals. You must make it your mantra, every customer, from a customer.”

Danny Farrar, CEO/Founder at SOLDIERFIT

Calls to close

“Number of calls to close a sale is a big metric for us. Technically, we can close in one call, though the norm is two calls. The reps who are making sales in one or two calls tells me they really get it. But those who are taking four or more calls means they’re leaving too much doubt and not enough clarity of how we can solve the prospects’ pain points. 

Because time is money, and speed of cash flow is important, we like to close prospects quickly.”

Brian Robben, CEO at Robben Media

Opportunity aging

“I believe the most important metric for a sales rep is the Opportunity Aging report specifically showing the length of time from the last touch/CRM note input.  

This is key in determining both the actual activity with a prospect and also how thorough and up-to-date the rep is regarding CRM and the formal process. Open opportunities that become dated are essentially useless, and this CRM report can help in minimizing those.”

Ken Lambert, President at North American Association of Sales Engineers

Average deal size

“In a team with equal territories and opportunity, the Average Deal Size is a key metric. It represents the salesperson’s ability to negotiate larger orders, sell more services, and be steadfast on price. 

A larger deal provides the business with more revenue from day 1 and/or ties the customer into a longer contract.”

Henning Schwinum, Co-Founder & Managing Partner at Vendux

Quantifiable effectiveness

“As the CEO, and sales leader of an almost 50 person team, one of the most important and often underutilized metrics I use for sales growth is quantifiable effectiveness. 

What impact am I getting from my most time-consuming activities and how can I tweak those results or replicate them with members of my team? 

Instead of spinning our wheels on tasks that don’t produce revenue, we use this metric to eliminate time waste and spend our energy on areas that consistently result in increased business.”

Robert Lewis, President & CEO at Peak Access Solutions

Motivation is a tricky thing. Not everyone is inspired by the same type of encouragement. Some salespeople are after the win. Just getting a “yes” from a prospect is enough to trigger a tidal wave of adrenaline. Others want a little extra in their bank account or something tangible to show off at home. As a sales manager or similar supervisor, you have the freedom to motivate using those goals as your guide.

These team incentives tick all the boxes to help you reinvigorate your sales-chasing squad and get that much closer to your department’s collective objectives.

1. Tie team incentives to sales goals

If you want to promote teamwork, foster the idea that the team that succeeds together also wins bonuses together. When the team hits a goal, everyone gets a bonus. It’s perhaps the simplest incentive on the list, but it’s also effective.

All for one and one for all comes into play here. Strong employees are likely to work hard to compensate for weaker salespeople or newer colleagues still learning the ropes. While those uneven contributions aren’t great for morale in the long run, they do balance out in the short term. No one loses sight of the goal line because everyone needs to make it across.

• Example: Everyone gets a $500 bonus if the team hits $100k in October.
• Example: If the team hits the company’s annual target, everyone gets a $1,000 bonus.

Remember, these team sales goal bonuses can apply to a single launch or campaign or be tied to monthly, quarterly, or even annual goals. The prize doesn’t have to be cash, either. It could be a change in scheduling, a free meal, or tickets to a popular event. Leaders may consider another benefit, such as a spa day to help combat stress. Some people might even like the idea of giving to charity or snagging a prime parking space.

2. Bonuses for hitting quotas

This type of incentive compensation still encourages teamwork but doesn’t entirely tie a single employee’s bonus to other team members’ performances. Instead, each employee that hits their own goal receives smaller bonuses, which are available to everyone on the team. The two out of eight team members who hit their quotas may receive bonuses, or all eight team members might receive them.

This idea creates a solution that promotes cooperation without erasing individual recognition and accomplishment. The approach encourages employees to help each other out but doesn’t penalize high producers if one coworker is lagging behind.

One variation is to award individual bonuses for quotas and smaller bonuses for each team member that also hits theirs.

• Example: You get a $500 bonus if you hit your quarterly quota plus an addition $200 bonus for each team member who hits theirs.
• Example: Each person on the team who hits their monthly quota receives a $100 restaurant gift card.

3. Time off for hitting targets

Who doesn’t like time away from the office that doesn’t eat up sick days or PTO? Offering time off in return for hitting key targets gives hardworking team members a mental break and time out of the office to recharge. By setting targets high, sales managers can still push productivity and meet their own goals while offering an impressive incentive. The work just gets done in less time (and you can see what your team is truly capable of when pushed). In such cases, consider distributing glass awards to the most successful employees and team members to celebrate and honor their accomplishments.

One possible perk of this type of incentive is the opportunity for rewarding something other than sales quotas.

• Example: If the team sets 40 meetings this week, everyone gets Friday off
• Example: If the team sells $100k this month, they get the first week off next month

4. Sub-team competition

Time for some friendly competition! Split your sales team into two smaller teams, and have them compete. Everything they accomplish still goes into the team’s till, so to speak, but there’s an additional win for the “sub-team” that emerges victorious.

• Example: Split your 10-person sales team into two five-person sub-teams. The sub-team who sells the most gets to split $2,000.
• Example: Break a 30-person SDR team into three 10-person teams. The team that sets the most meetings gets $300 per person
  

5. Team speed bonus

When time is of the essence, choose this incentive, which is basically a game of beat the clock — or beat the calendar. If the team hits a specific target by a specific date, everyone gets a bonus. The target could be leads, sales, or meetings. The incentive could be cold hard cash, time off or something else such as remote work days or a coveted sales trip.

• Example: If the team hits its quarterly quota by the end of the second month, everyone gets $300.
• Example: If the team hits its monthly quota early, they get $30 per person for each day left in the month.

6. Team accelerators

Accelerators build on existing compensation plans. If the team hits its quota, everyone gets an extra percentage on top of whatever deal they already have in place.

• Example: If the team hits quota, everyone gets an extra 2% commission on all their closed deals.
• Example: If the team hits 110% quota, everyone gets a $100 bonus for every deal they closed.

7. Team sales cycle bonus

Some team incentives speak to a specific pain point rather than encouraging overall sales. Say you want to shorten the team’s sales cycle. Just give a bonus based on whether the team is able to cycle through the sales steps faster. The size of the bonus can increase depending on how much shorter the sales cycle ultimately gets.

• Example: If the team’s average sales cycle for the month is less than 45 days, everyone gets a $300 bonus.
• Example: If the team’s quarterly average sales cycle is less than 90 days, everyone gets a $50 bonus for each day under the previous average.

8. Team average contract size bonus

Another team incentive that focuses on a specific pain point, this one tackles average contract size. If you want to increase the size of the deals your team is closing, give them a reason to go the extra mile. The bonus can be tied to a general increase in contract value or tiered depending on the size of the increase.

• Example: If the team average contract value rises above $30,000, everyone gets a $500 bonus.
• Example: If the team average contract value is more than $20,000, everyone gets a $400 bonus for each deal over $20,000.

Team incentives should speak to what you need for your team and what your team needs from you. Whether your team members are looking for recognition, opportunity, money or a break, there’s room for everyone to be happy. For help tracking sales progress, logging accurate commissions and more, check out QuotaPath. Sign up for free, create a custom workspace and see how this resource can help you make the most of every incentive.

There’s a number in mathematics called Graham’s Number that is one of those absurdly large numbers that is used for some proof that I’m woefully underqualified to begin understanding.

This blog is about Graham’s Other Number — for the sake of simplicity just called Graham’s Number in this article. This is a number that I used while I was running an SDR team for a few years that helped me evaluate which segments of customers are most valuable. There is no good unit for Graham’s Number (you’ll see why in a moment) so I often put a G after the number so we know it’s a Graham’s Number value. I’ll talk about how to get this number, what it’s good for, how to utilize it for your business, where it fails, and complex variations. 

How to calculate Graham’s Number

Without further ado, this is the equation for Graham’s Number. 

Graham’s Number = (Average contract value * demo:close rate) / # of days in the sales cycle

Here’s an example: TrendRhino, a SaaS company, has an average contract value of $20,000. They have a demo:close rate of 15%. Their average sales cycle is 30 days. 

So their Graham’s Number formula would be: (20000 * .15) / 30 = 100G

You might be asking “what are the definitions of ‘average contract value’ and ‘demo:close rate’?” Well, as you’ll see momentarily, it doesn’t matter — as long as you’re consistently using the same definition. Maybe ‘sales cycle’ for your organization means the number of days from first demo to signed contract. Maybe it means the day of the trial to invoice sent. 

Why would I use Graham’s Number?

So we now know that TrendRhino has a Graham’s Number of 100G… so what? Well, this number doesn’t mean anything in a vacuum. Nor does it really make sense to compare two companies’ Graham’s Numbers. The real use of this number is when comparing two customer segments. So let’s take this example a bit further. TrendRhino sells to 2 different types of customers: brands and agencies. 

Brands have an average contract value of $30,000, a demo:close rate of 10%, and an average sales cycle of 40 days: (30000 * .1) / 40 = 75G. 

Agencies have an average contract value of $10,000, a demo:close rate of 25%, and an average sales cycle of 20 days: (10000 * .25) / 20 = 125G. 

Now at first glance, you’d think that brands are the real money maker, they close at 3x the cost after all! However, if you look at the Graham’s Number for these two examples, agencies beat out brands drastically. 

How to utilize Graham’s Number

Remember, Graham’s Number is designed to be used as a yardstick, a way of comparing two (or more!) different groups of accounts. So how best to utilize it? First, you need to figure out which different groups of accounts you want to compare. I encourage you to test your expectations. Don’t simply use the groupings you’re used to using historically. Here are some of the ways I would recommend trying to group your accounts: 

• Company size
• Company revenue
• Company revenue
• Location
• Industry
• Funding amount/type
• Account score
• First point of contact’s title

Next, now that you’ve identified a few different ways you want to segment your accounts, run the Graham’s Number equation on all of them. Are there any outliers? Can they be explained away? 

If you have found that, for example, Graham’s Number increases as the company size increases, you can improve your targeting to focus on those companies more.

Where Graham’s Number fails

If you made it this far and haven’t said to yourself “wait, hang on a second…” about anything I said, I appreciate your trust in me but you probably should be a little more skeptical. This model is far from perfect and it’s just one of many ways you should be analyzing your account list. Here are the other objections I often hear: 

1. “Sales cycle is too powerful in this equation!” Yep, it certainly can be. If you have some segments with a 5 day sales cycle and some with a 10 day sales cycle, the Graham’s Number will be 2x for the shorter sales cycle vs. longer. There’s a fix to this in the next section. However, keep in mind that if you have a 5 day sales cycle you can close a lot more deals in the same time frame as if you have a 10 day sales cycle, so you might not want to adjust.
2. “This is an over-simplification!” Well yeah, sure, that’s intentional. I wanted a quick and easy way to evaluate account segments against each other. You can make it more complex if you want, check the next section.
3. “Our demo:close rate is the same across all segments!” Wow, that’s awesome! Is there another number you could swap in for it? More below.

Complex variations of Graham’s Number

If you want to overweight/underweight sales cycle. The traditional format works best if you have sales cycles in the 30-180 day range. If you’re on 300 vs. 400 day sales cycles or 2 vs. 4 day sales cycles, the sales cycle component loses its effectiveness. Get ready, this is going to be a little complicated. Instead, you can chart your deals’ sales cycles on a normal curve and divide by the percentile of the sales cycle.

If you want to include additional components. Go for it! Just be careful to not over complicate it. One thing I’ve added in the past is the amount of time spent on an opportunity, signified by the number of meetings held on the opportunity. In that case, you would want a low number of meetings, so you’d divide the original formula again by the number of meetings. 

If you want to remove a component. I wouldn’t remove a component without adding in another component. You could try adding in the number of meetings, the renewal rate of the accounts, or some other metric that is important to your company. 

So there we go, sorry if you came here expecting an article on the “real” Graham’s Number, but hopefully, you now have another way of determining whether your account segmentation is working. 

So you’ve already set the sales quota for your sales reps.

You’ve scaled your sales team out with individual reps and they’re performing at a high level. But what’s the next step to keep the entire team performing?

In my experience, a way of keeping your team motivated and performing is to set a team goal — and all work together toward hitting it.

But how do you set this goal? There are a few different options.

Sum of quotas

This is the most basic of team goals.

Say you have 10 salespeople on your team, each with a $35,000 ARR monthly quota. Simple enough: you just add up all the quotas on your team and this is your team goal.

Pros:

• Easy to understand.
• It’s very easy to explain why that’s the goal to all your reps and your executive team.
• Incentivizes consistency.
• If you’re going to hit your goal every month, each person needs to hit their quota every month. This can cause the team to lift each other up.

Cons:

• Doesn’t encourage overperformance.
• If everyone hits their quota, you hit the goal. This encourages all team members to maintain the status quo.
• Requires consistency.
• All reps have to hit their number or for every underperformer you need an overperformer. This can be tough to manage month over month.

More than sum of quotas

This is the goal for the high performing team (the kind of team that’s willing to reach for the star). Instead of simply adding up all the quotas on the team, you add an extra dollar amount.

There’s more than one option here, too. I’ve seen teams do 110% of the team quota, act like they have an extra team member who needs to hit quota, or set a nice even number like $500k.

Pros:

• Encourages overperformance.
• If your team is going to hit this number, every member has to be firing on all cylinders.
• Higher sales.
• If you’re achieving this goal, you’re going to have higher sales than if you had a lower goal. Sounds simple — and it is. But teams bringing in more money are happier and treated better.

Cons:

• Can be discouraging.
• If you miss your goal 5 months in a row, it can really deflate your team. And if you have to lower your goal because it was set to high, that can be a hit to morale.
• Requires all team members to overperform.
• You’d better be very confident in your team if you’re going this route. Even one underperformer means you have a giant hole to dig out of.

Less than sum of quotas

Take the sum of your team’s quota and chop off some portion of it.

Whether it’s 90% of your total, or acting like you have 1 less member of your team, there are a few ways to reduce your team goal.

Pros:

• Easier to hit.
• I know, another no-brainer here. If your goal is lower, you’re more likely to meet that goal.
• Higher morale.
• Everyone loves winning and hitting goals. Hitting a goal gives your team a boost of confidence.

Cons:

• Doesn’t have the same feeling.
• Even I can dunk on a 6-foot rim. It’s just not impressive. The same can be said for lowering your target. If it’s comically low, people won’t get excited when they hit it.
• Missing is even more painful.
• Imagine if I tried to dunk on a 6-foot rim and failed, though. As a sales team, if you have a lowered goal and you still can’t hit it, there’s likely something else very wrong that needs to be addressed.

Choosing your path

Whichever direction you take your goal setting, make sure it’s articulated well to your team. Nothing is worse than a goal that is not well laid out or explained.

Finally, make sure you have a reward for the team hitting this goal. It could be something like a company shout out, a monetary reward, or (my favorite) a group activity like a happy hour or boating trip. Your team goal should motivate on top of the way you recognize and compensate individual reps for hitting quota.

Customer relationship management (CRM) tools are a critical part of any salesperson’s job and remain the most used tool in every great seller’s kit. Since launching a few years ago, HubSpot’s Sales CRM has become one of the most popular and widely used sales software out there to help close more deals, manage client relationships, and track team activities.

If you check out HubSpot’s Sales, their message is simple: it’s possible to love your sales CRM. They believe in swapping friction for clarity, consistency, and (dare we say) joy. It’s this mission that aligns so well with our own. We aim to take the confusion out of sales commissions and give you the insights you need to sell more and effectively.

Almost a year ago to this date, we launched our first CRM integration with Salesforce. Since then, we’ve tested, learned, and improved A LOT when it comes to building powerful and streamlined integrations. Today, we’re excited to announce that our #1 most requested feature in 2020 is live: The HubSpot Sales CRM integration.

HubSpot Sales CRM: Our newest integration

With this integration, you can import all of your HubSpot deals in just a few clicks. Layer on attainment and earnings data from QuotaPath, and you have a clear understanding of your sales performance and goals. 

• This integration works whether you’re an individual contributor looking to track your earnings each month or a sales leader managing your team’s compensation. 
• Reps can see their deals, forecast potential earnings, and refresh to bring in updates.
• Admins can align QuotaPath members to HubSpot users, map comp plans with HubSpot CRM data, and calculate earnings & attainment from HubSpot deals.
• This integration allows for a single source of truth for both attainment and earnings – no more dual entry in multiple tools.

Automate commissions with HubSpot in 4 easy steps

The one-way sync from HubSpot to QuotaPath is intuitive to set up and can be done in just four steps. 

Choose HubSpot “Deal” records

Pull in Deal records from HubSpot to count towards your earnings in QuotaPath.

Map Fields

Map all the components of your comp plan to relevant fields in HubSpot like deal name, deal amount, closed date, and owner email.

Define stages

Define deal stages to see commissions on closed deals and forecast potential earnings on opportunities.

Sync deals

Once you’re ready, start syncing. QuotaPath will populate HubSpot deals for all comp plan assignees.

And that’s it. It’s really that easy. We’re giving you time back to set more demos and close more deals. 

Try the HubSpot Sales CRM integration today

With millions of HubSpot customers worldwide, this integration gives us the pleasure of helping more sales teams track commissions, performance, and revenue. We’re thrilled to be partnering with HubSpot and this is just the beginning.

If you want to learn more about the integration and try it out, we’re officially listed on HubSpot’s app marketplace! 

The rep-configured HubSpot CRM integration is available for free.

I wish there was a standard commission rate, I really do. Given I spend so much of my time discussing commission rates with sales leaders and sales reps, this comes up a lot. As with most questions related to sales compensation, there is a short answer and a much longer answer. Strap in, here we go!

What is the standard commission rate for SaaS sales?

10%. The standard commission rate for SaaS sales is 10%.

If that’s all you came for, thanks for checking out my blog! If you want a bit more context, here you go.

There’s a reason that commission calculators generally start at 10% commission rate for salespeople. This is because of two major rules in compensation plan setting.

Standard commission rate rules

Rule 1: 50/50 split between base salary and commission. When looking at OTE (On-Target Earnings), the majority of compensation plans have half a rep’s earnings being base salary and the other half being commission. While there are exceptions, this is the standard rule of thumb.

Rule 2: 5x Quota:OTE ratio. This is a little more complex. If you take a rep’s annualized quota and divide that by their OTE, you’ll come up with their Quota:OTE ratio. The rule of thumb is that this should be between 4 and 6.

If you put these two rules together, you’ll see where we come up with 10%. Here’s an example:

A sales rep has an OTE of $120,000. They earn a $60,000 annual base salary and have an expected commission of $60,000 annually if they hit their quota. That’s the 50/50 split. Their quota is $150,000 per quarter, meaning they have a $600,000 annualized quota. That’s the 5x Quota:OTE ratio. So if they hit their $600,000 quota they earn $60,000. $600,000/$60,000 = 10% sales commission.

For calculating OTE, use our free Quota: OTE Ratio Calculator.

Learn More

More complex commission rate considerations

Okay, so you don’t live in a perfect sales world. Your compensation plan is not as simple as what I laid out above. Your base salaries are 60%, your quota ratio is 6.1x, you work in manufacturing selling goods. Let’s tackle these one at a time.

Base salary isn’t 50% of OTE

As I mentioned, the majority of salespeople have a base salary that is 50% of their OTE. However, there are instances where the base salary might be higher or lower than 50%. If the base salary is higher than 50%, you should expect a lower commission rate. Conversely, if the base salary is lower than 50%, expect a higher commission rate.

Quota:OTE isn’t 5x

When I have comp plan consult calls with sales leaders, it’s actually fairly rare that a salesperson’s quota is exactly 5x their OTE. If your revenue is less than a million dollars, it’s likely you have a 3x or even lower. So if you’re just building out a sales team, don’t fret. If your revenue is above a billion dollars, you probably have an 8x or higher multiple. The lower that multiple is, the higher the commission rate is going to be.

Not a SaaS business

I gave the example of manufacturing above, but maybe your industry is services or goods instead of software. If your cost of selling is higher or your customer acquisition cost is very high, you’re likely to have a lower commission rate by necessity. For example, if you need an employee to run onboarding, you need an employee to handle the service, and you need a whole team of contractor staff to do data entry, your expenses are going to be higher. Because your costs are so high, your commission rate needs to be lower.

There’s no exact template that lays out the perfect commission rate for every business and every industry. So you have to take a lot of things into consideration as you’re building a compensation plan.

Fortunately, our team at QuotaPath built a wonderful tool for figuring out quotas, OTE, and commission rates. Check out our sales compensation calculator here.

And once you figured out the right commission rate (or commission rates!) for your sales team, check out QuotaPath. We automate the commission calculating and quota attainment tracking for you.