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.

With an unmatched number of people working from home (WFH), it can be difficult to maintain motivation. This is especially true for salespeople who are typically surrounded by their peers making cold calls, running demos, and closing deals. I sat down with Mark Siciliano, the VP of Sales Productivity & Strategy at Drift to discuss how he’s keeping his team motivated while working from home.

Graham Collins:

Hey Mark, thank you so much for chatting with me about sales in the “work from home” world. Before we dive in, can you tell our readers a little bit about yourself and Drift?

Mark Siciliano:

Sure, Graham. Happy to be with you. For starters, I joined Drift in August of this year as the VP of Sales Productivity & Strategy. I’ve worked with great SaaS business from Oracle, Marketo, Demandbase, and now Drift. What makes Drift so unusual, was that I was hired while working remotely and onboarding with colleagues I’ve not yet met face to face. And yet there is such a connection. It’s an incredibly exciting time for Drift and it’s been a fantastic experience helping our customers adapt and succeed during a challenging time for all of us.

In case your readers don’t know, Drift is a Revenue Acceleration platform that uses conversational marketing and conversational sales to help our customers grow revenue and increase customer lifetime value faster. In essence, we power the marketing and sales tech for more than 50,000 businesses that enables folks to do their jobs better, smarter, and more effectively, using a platform with AI.

Graham Collins:

Great! Thanks, Mark. Okay, diving in here with my first question. It can be tough to stay motivated to sell while working from home. How do you keep your team motivated during these challenging times?

Mark Siciliano:

It’s a great question, and something that in speaking with other sales professionals, is very top of mind for themselves and their teams. Maintaining motivation and drawing boundaries between work and life has never been more important than it is now.

At Drift, we’ve been working hard to make sure these lines are drawn and our teams feel supported. To do this, we’ve moved a lot of our important employee engagement programs to virtual experiences, including Monday Metrics, when teams can reflect on progress and outline clear priorities for the week. We’re balancing these regular meetings with more casual ones. Recently, we held a virtual “Friends and Family Day” for our entire company, where the team had the opportunity to connect outside of a business setting. These are important initiatives that work in tandem to make sure we can not only align on priorities, but also build camaraderie amongst our team.

In addition, we actually decided to shift our fiscal year end from December 31 to January 31st. This means that our sales team can actually enjoy the holidays — and actually helps our customers focus on their year end, instead of Zoom calls with us!

I think my biggest advice to other managers who are struggling to keep their team motivated during the pandemic is to unite under one goal. For the team at Drift, our goal is to continue innovating for our customers and put them in the center of everything we do. That’s how our company was built, and it’s one of the pillars of our organization.

Graham Collins:

I get asked about hiring and training remote salespeople frequently. I know you were hired remotely, but have you done any hiring and training remotely? If so, what’s your advice for those struggling with it?

Mark Siciliano:

Drift as a company has grown a lot since Q1 – and even in the months since I joined the team. We were incredibly fortunate to even record one of our largest quarters in company history in both Q2 and Q3 of this year. As a result of this momentum, we’ve expanded our team significantly and restructured our internal organization to ensure our employees are supported.

Since joining Drift, I’ve been in charge of remotely hiring and training over 100 people. It’s been a significant undertaking building – and onboarding – our sales leadership team entirely remote. As challenging as it’s been, however, I’m reminded of how lucky we are to be able to hire new talent amidst the pandemic, because I know that’s not the case for a lot of companies this year.

My advice to managers specifically is to be as clear as possible when assigning projects or when giving instructions, and repeat instructions frequently. It seems like such a foundational, basic piece of advice, but when we’re caught up in the day to day, I think sometimes it serves as a helpful reminder to managers and associates alike.

Graham Collins:

For salespeople who are used to being surrounded by their peers on a sales floor every day, transitioning to a remote lifestyle might be a huge change for them. How would you recommend a salesperson acclimates to a fully remote sales role and what virtual team building activities would you recommend?

Mark Siciliano:

I think my biggest recommendation is to ensure that salespeople have very clear channels for communicating with one another. Sales roles center around collaboration and teamwork. These teams are always working with one another to share leads in order to meet sales quotas and goals.

Consistent, effective communication serves as the foundation of any successful team and means even more when working remotely. Of course, this can be much harder when you’re remote and aren’t able to turn to the person next to you to ask for help. This is where sales managers play a role; it’s our responsibility as sales managers to facilitate this virtual collaboration whenever possible.

Graham Collins:

Obviously being a SaaS company, I’m sure you lean on tech to drive engagement with your sales team. How has technology helped you during this time?

Mark Siciliano:

Absolutely. At Drift, we lean on product-led growth as our primary strategy, so technology and functionality are at the heart of everything we do. This is something that has definitely worked, as we grew from $0 in revenue in 2015 to more than eight figures in less than two years.

Something that is quickly becoming the cornerstone of our sales tech stack is our newest product, Drift Prospector. We launched Prospector in August as part of our announcing a new category in enterprise technology: Revenue Acceleration. The beauty of this platform is that it’s a product built for our virtual lives right now. What I mean is that because of social distancing recommendations, the dinners and in-person events we once relied on to build relationships and engage with our customers now aren’t an option. Instead, we leverage technology to our advantage to meet customers on their terms, and establish that essential visibility to see when outbounds are being engaged with.

Prospector works for sales teams by helping them navigate the omnichannel, virtual sales environment – LinkedIn, Salesforce, Outreach, etc. – by aggregating all of these disparate touchpoints under one platform. Thus providing visibility into how prospects are engaging with outbounds.

Right now, it’s all about removing friction from the buying process and creating impactful digital experiences for current and prospective customers alike. As the adaptation that the pandemic started with slowly turns into normal behavior, sales teams will need to increasingly rely on technology like Prospector, to better engage customers on their terms, 24/7/365.

Graham Collins:

Any other tips and tricks you might recommend for a salesperson working from home for the first time?

Mark Siciliano:

Definitely, I have a couple that immediately come to mind:

My first piece of advice for an AE is: relate to the pain. 2020 has been a difficult time for all of us, and sales teams need to be mindful and attentive to the situations our prospects and customers are in. This year we’ve all experienced a great trauma, and unless we can relate to that pain and connect to illustrate the “why now” of a buying decision, your sales pitch will be meaningless. Creating that sense of alignment is essential now to show prospects that you understand their pain points.

My other tip is to put the customer at the center of everything you do. I’ve alluded to this already – and it might sound complex, but it’s really not. In order to succeed now – in sales and really every profession – we need to think about our customers foremost. Think with every decision, “what is the value for my customers?” If you can adopt this mindset, then remote work or in person, you’ll set yourself up for success. This is our mentality at Drift, and something that’s been vital to our success since the beginning.

Graham Collins:

Thank you again for your time, Mark. Where can people find you — and Drift — online?

Mark Siciliano:

Thank you for your time as well, Graham. Our website is www.drift.com. While there, we have a great blog with a lot of really helpful resources that everyone should check out, as well as Drift Insider — our learning platform. You can also catch us on Twitter @Drift and on LinkedIn and me at @MarkSiciliano61 on Twitter and on LinkedIn.

Sales goals aren’t just practical; they’re also powerful motivators. When you’re in a leadership role, it’s your responsibility to find ways to light a fire under your sales team. It’s your job to help them, which helps you generate impressive numbers. You can’t move an inch in the sales industry without the word quota hitting you in the face, but quota isn’t everything. In fact, sometimes experimenting with unexpected and creative sales goals is far more thrilling — and effective.

What makes a good sales goal?

First things first. Before you can suggest your team aim at some outside-the-box targets, you need to make sure you’re setting everyone up for success.

“Hitting quota” is a good goal, but it’s also an obvious one. It fits the SMART framework — Specific, Measurable, Attainable, Relevant, Time-Based; however, it doesn’t always work. There are a lot of reasons reps fail to meet quota. One major contributor is the fact that such a broad, generic goal doesn’t speak to salespeople as individuals.

Try creating additional sales goals tailored to each specific person and what they’re looking to achieve. Also, ensure every goal is attached to a clearly defined outcome and timeframe.

The sales goal examples below tick all of those boxes. As a bonus, each offers suggestions on how to coach reps as they reframe their sales approach and embrace the opportunity for growth.

Sales goals

1. Improve demo-to-close ratio from X to Y over the next 90 days

When to use it: A rep is having a lot of conversations with prospects but not closing a lot of deals.

Ideally, the more a rep meets with prospects, the more deals they’ll close. When that doesn’t happen, it can feel defeating. Switching from a general sales quota to boosting their existing demo-to-close ratio builds on personal accomplishments and addresses a specific pain point — they’re not competing with anyone but themselves.

To help your sales team amp up their close rates, have them run through the demo process. Are they maximizing every opportunity? How are they tackling prospects’ objections? One way to help is to do a postmortem on lost deals. By identifying where things have gone wrong, you can offer suggestions on ways to improve. Try sharing alternative approaches that have proven successful in the past.

The 90-day timeframe allows for mini-goals or milestones. Continue revisiting the demo process to see how small tweaks affect interactions with prospects and keep the rep engaged and on track.

2. Generate $X in the new pipeline this month

When to use it: A rep is good at closing but doesn’t have the required deals in their pipeline to hit targets.

This is another situation when a close rate isn’t everything. Say a rep nails 100% of their demos but only schedules meetings with prospects twice a month — that scenario makes it difficult to hit quota or achieve any other meaningful target unless those closed deals are worth a ton. In some industries, two contracts every 30 days may be enough. In others, that’s miles from satisfactory.

Sales reps who need to liven up their pipeline should start by looking at their outbound sales strategies. How are they reaching out to prospects? What is their process for gathering and nurturing leads? Are they using email templates or personalizing each pitch?

There’s room to listen to a cold call and offer feedback. But it may be more productive to have the rep shadow a top demo seller. They’ll be able to see firsthand what a successful pitch looks like and how someone who’s hitting their numbers talks to prospects. Witnessing different ways a rep connects with strangers to establish rapport can be invaluable.

Sometimes increasing the number of deals in a rep’s pipeline is just a numbers game. If they’re not making cold calls, they need to start. If they’re making calls and sending emails sporadically, it’s time to step it up. Set short-term goals that suit the current campaign. This might include executing a certain number of calls and/or emails every day. That way there are plenty of opportunities to put new strategies to work. Help reps track what seems to be effective. Also, keep an eye on anything that doesn’t feel natural or fails to connect with prospects.

3. Shorten sales cycle from X to Y days for the next 10 deals

When to use it: A sales rep closes many deals, but the process takes forever.

The exact steps in a sales cycle shift from industry to industry and even company to company, but everyone wants an efficient cycle. The more time you spend going from absolutely nothing to a closed deal represents a consistent usage of resources. While a rep is locked in negotiations with a potential client or busy fiddling with details in pursuit of a final agreement, they’re:

• Unable to turn their attention to other prospects
• Generating expenses without generating revenue
• At greater risk of the deal falling through

It’s important to note that super-short sales cycles aren’t always possible. For instance, imagine you’re in SaaS and pitching the CEO of a Fortune 500 company. It’ll be difficult to convince her to spend a few hundred thousand on a company-wide IT upgrade in a matter of days.

In a perfect world, long sales cycles exist in tandem with shorter cycles. That way, there are always deals being made and money coming in. The problem is when one rep’s sales cycle is significantly longer than his or her coworkers or the industry’s norm.

The key to improvement here is to shorten the sales cycle anywhere you can. Suggest your rep reconnect with prospects in one week instead of two or check back in a couple of days. Make the timeline a primary focus early on, and encourage reps to ask more questions about a prospect’s timeline. They may need to practice pushing back — within reason, of course — if the customer suggests touching base too far into the future.

4. Increase average contract value by $X by the end of this fiscal year

When to use it: A rep is closing a lot of deals, but they’re small.

Every contract counts, but if we’re honest, some count more than others. There are no participation prizes in sales — revenue matters. Reps have to sell and sell big. A salesperson who’s closing many deals every year but has a low average contract value might have one of the easiest paths forward. After all, they’ve already proven they can connect with prospects and convert them into customers. Now all that’s left is to work on the skills necessary to convince those customers to spend more.

This goal is all about the upsell. Train your rep on additional products and how they complement each other, so it’s easier to explain the benefits of buying more. Negotiation training can be helpful, too:

• Teach what not to do, such as making assumptions or rushing into an agreement
• Outline the perks of coming to the table prepared and what proper preparation looks like
• Discuss the importance of impartiality and the dangers of taking negotiations personally
• Talk about the power of empathy and how using emotion to balance out rational arguments can be exponentially more effective
• Encourage reps to look at negotiations as a way to build relationships by listening, taking opinions and preferences on board, and forging connections

Another way to increase the average contract value is to go after bigger accounts. Larger companies typically have larger budgets and a greater need for products and services. Check with reps who may feel intimidated; role-playing exercises and mentorship can go a long way to instilling some much-needed confidence.

As for the timeframe of this goal, it depends on how long your sales cycle is. Are you at the start of a new fiscal year and your reps close a handful of deals per year? Then you can make it a ‘this fiscal year’ goal. A full sales year might be too long if you’re closing 50+ deals in a year. If you have this as a goal, you just might have the best sales year yet.

5. Have X% of this quarter’s revenue come from Y industry

When to use it: A rep is being overly reliant on one specific industry. This is especially true if that industry isn’t great for you or the powers that be.

Most people don’t go out of their comfort zone unless they have to. Reps who know a certain industry like the back of their hand may be reluctant to test the waters elsewhere. They know the clients, the lingo, and how businesses in that industry operate. It’s easier to sell because they’ve addressed common pain points multiple times and can speak to prospects from a place of experience. The issue is that you can only go back to the same well so many times before the water runs out.

Diversification equals opportunity. Empower your rep to take on a new-to-them industry or expand their work in an under-serviced niche. They may need sales training to understand that new industry. On the other hand, it could just be a matter of starting them out with a set of high-quality accounts.

6. Sales team goal of $X this quarter

When to use it: When you have one or two top sellers on the team and the rest of the team is struggling.

Okay, I know I saw these sales goals aren’t “hit quota” but this is slightly different. As a sales team leader, your success hinges on the success of every team member. Encouraging your team to focus on team sales goals can cause an overall lift on the team’s attainment.

What you may see with a sales team goal is more collaboration and teamwork. If one team member is struggling, another team member could lift them up or provide assistance on a deal. That doesn’t mean the team leader can rely on this, though. Especially if you have a remote sales team (seems like nearly every sales team is a remote sales team!) this could be a good goal.

If you roll this out and have your team meet this goal, a good incentive is an extra bonus for everyone on the team. Give your team a little extra cash or a day off. Or maybe you give your team quota relief for a tough month. This might motivate your team to hit a stretch goal!

Encouraging your reps, no matter their sales goals

You may be juggling 10 reps with just as many divergent sales goals, but some things remain the same. As you work on tracking progress and monitoring KPIs, don’t neglect the human element. The skills you’re teaching work for the campaign’s lifetime, but they also work for the rep’s entire lifetime. Focusing on growth first and money second makes sense. Take care of the first, and the second will follow.

Customer acquisition can be a tricky game. Converting prospects into profitable B2B clients is even trickier. But your job as a manager is to give your people feedback to help them leapfrog to the next level. Do that, and you’ll foster team loyalty, meet your objectives, and perhaps even exceed your forecast.

Setting sales goals that speak to each individual takes practice, but the results are worth the work. No matter what goals you decide to give your reps, it’s imperative to keep an eye on their progress. Use QuotaPath to track your reps’ growth, so everyone knows where they stand every step of the way.

If sales reps pursued every possible opportunity, they’d be exerting an awful lot of effort for very paltry results. Qualifying opportunities enables reps to prioritize efforts according to how likely they are to close. For sales leaders looking to empower their team to be super successful, the BANT sales framework is an invaluable tool.

What is the BANT sales process?

Part of the job description for a sales leader is facilitating a more strategic, streamlined sales process. That includes determining whether a prospect is a good fit. That determination is less black and white and more of a sliding scale. The higher the likelihood that a prospect is a good fit, the more sense it makes for a sales rep to pursue the opportunity after the demo. Enter BANT.

BANT stands for Budget, Authority, Need, Timeline.

• Budget: Does the client have budget dedicated to buying your service? There’s a lot of wiggle room between what a prospect wants and what you believe they need. Some things can’t be overcome. A product or service that’s way out of a prospect’s budget won’t magically become affordable. If they can’t afford to work with your company, then it’s not a good fit.
• Authority: Does your point of contact have the authority to make a buying decision? Always make sure you’re negotiating with the decision-maker. Ask who has the buying power. If it’s not your point of contact, make sure you understand how they’ll get approval and how long that process takes.
• Need: Does the client need your tool over your competitors’? The best products and services address a prospect’s pain point. Do they want something, or do they need it? Get to know customers’ challenges and be prepared to address how you can solve them.
• Timeline: When does the prospect need their new purchase in place? Sometimes those expectations are not realistic. They may expect a short sales cycle that’s almost impossible to execute. Or, they may not want to decide for months, which can strain your own resources. Timelines that suit your own needs can take priority.

Why does it still work?

IBM first developed BANT in the 1950s. That means it’s nearly three-quarters of a century old. And yet, BANT still works and is used by salespeople in a wide variety of industries. Why the longevity? Experts agree that it’s an easy way for any salesperson to judge the quality of an opportunity. It doesn’t matter if you’re new or decades into the game. BANT is a universal language that ensures even novice reps know what questions to ask.

Is there anything better than the BANT sales process?

Some people criticize BANT because it can be a rather shallow evaluation. As important as it is to understand the what, you also need to delve into the why. But it is possible to use BANT as a starting point since each letter in the acronym is a guidepost. However, it’s up to the rep to dig deeper.

Still, some industries or organizations may be better suited to a more complex approach. Take MEDDIC or MEDDPICC for example. MEDDIC stands for:

• Metrics
• Economic buyer
• Decision criteria
• Decision process
• Identify pain
• Champion

MEDDIC is the go-to for a lot of SaaS companies. The focus on KPIs and ROI (the metrics portion of the acronym) makes sense for companies seeking improvement through technological advances.

MEDDPIC is similar but adds “paper process” into the mix. That has to do with how the prospect actually processes bids and does the clerical work that goes into making a decision. Think of the additional bureaucracy that’s often associated with an enterprise-level business.

Then there’s CHAMP:

• Challenges
• Authority
• Money
• Prioritization

CHAMP has a lot in common with BANT. The not-so-big twist is putting the primary emphasis on a prospect’s pain points over budget. The assumption is that need could override financial constraints.

When does the BANT sales process fail?

The BANT sales process seems universal, but it’s not always a success. For very complex sales that have a lot of moving parts, BANT can be too simplistic. Maybe your buyer isn’t concerned with pricing or doesn’t much care about the timeline. Eliminating 25%-50% of the qualifying criteria takes the wind out of BANT’s sails. You’re left with authority (who’s making the decision?) and need. Not much to go on.

Ultimately, how effective your qualification process is depends less on the acronym you choose and more on how you use it. If you’re a sales leader, train your team to look beyond a prospect’s answer to determine their why. Understanding the motivation behind certain decisions and why a timeline is the way it is could be the key to overcoming objections and making that almighty sale.

Once you’ve got close rates soaring, it’s time to keep an eye on commission. Lighten your load with QuotaPath’s innovative commission tracking and revenue management software. Build compensation plans, ensure transparency, and integrate the platform with your existing tech tools. For a full preview, sign up for an account and see the evolution first hand.

What is a Sales Operations Manager, really? Everyone seems to have a title in the sales industry, but the job description doesn’t always match. Whether you’re thinking about hiring a Sales Operations Manager/Revenue Operations Manager or want to become one, the first step is to understand what it takes (and what you’ll be doing). Oh, and there’s the not-so-insignificant matter of money. We’ll talk about job duties, salaries, and more, so you can see what it takes to be a top-notch SOM.

What is a sales operations manager?

Once upon a time — think the 1970s — those in “sales ops” had a relatively narrow purpose. Managers would analyze data and pass on those insights to sales reps. The role was simpler because the data itself was simpler. In the half-century since, sales operations management has become far more comprehensive.

Today, Sales Operations Managers are the puppet masters of a company’s sales and marketing departments. Their number one goal is to make the sales process as easy as possible for salespeople and prospects alike. SOMs supervise sales reps and other operational specialists to ensure things run smoothly. As part of their ongoing analysis, SOMs identify challenges, and find solutions.

You’re likely to find sales operations managers in larger companies or small companies looking to scale quickly. That’s because the amount of customers and revenue directly correlates to how complicated the sales process becomes. The amount of KPIs you need to track multiplies, there are more revenue streams to look over, and on it goes. Bringing in a SOM ensures there’s someone to take care of the minutiae, allowing your sales team to concentrate on selling.

What makes a good Sales Operations Manager?

The best Sales Operations Managers are people who think in systems. The job is all about creating sales processes, implementing them, and then continually revisiting and refining. Familiarity with CRM software and other technological tools is a major advantage as well.

Most successful Sales Operations Managers will have the following qualities and skills:

• Attention to detail. Sales strategies have a lot of moving parts. It’s important to be able to manage them all without letting anything fall through the cracks.
• Communication. Conveying objectives and coaching sales reps is a big part of the job.
• Technologically adept. It’s impossible to succeed in sales ops/revenue ops in 2020 (and beyond) if you can’t navigate the right software.
• A knack for long-term planning. SOMs are responsible for designing the sales team’s purpose and mission, so it’s important to use current data to plan for the future.
• Agility. Long-term plans are great, but lots can happen between now and your strategic milestones. Being able to pivot as needed will help the team thrive.
• Organization. All those processes and standards a SOM sets need to be documented. A great sales operations manager provides order.
• Leadership. For a sales strategy to work, reps have to listen to the messaging and respect the person sharing it.

Day-to-day activities of a sales ops manager

A Sales Ops Manager has a lot of duties, including:

• CRM management and oversight
• Overseeing crucial components of the sales process, such as territory alignment and customer profiling
• Creating and implementing sales and revenue generation strategies
• Structuring compensation plans
• Commission calculation and sharing
• Tracking and analyzing data

Some tasks occur less frequently but are no less important. Sales Ops Managers might oversee product training when it’s almost time to launch a new campaign. They often take care of hiring and onboarding talent as needed, too. They also might conduct quarterly reviews of incentive compensation plans, sales reps’ individual targets, and team goals.

What is the average Sales Operations Manager salary?

According to Glassdoor, Sales Operations Managers make an average base pay of $83,332 per year. Low-end salary sits at about $48,000, while those sitting on the high end of the scale make as much as $132,000 annually. Google has advertised sales operations manager positions with an average salary of just under $200,000 per year. At Bank of America, the average SOM salary is just over $90,000. All this indicates that salary can shift dramatically, depending on the industry.

Of course, the base salary is only one part of the pay mix. Sales Operations Managers are often part of the sales team. As such, they can certainly have a generous compensation package that includes commission, bonuses, and other perks.

Career track of a Sales Operations Manager

Sales Ops Managers come to the role with a wealth of experience. Many have a background in sales, operations, finance, or a combination of all three. For instance, a Revenue Operations Manager makes a great SOM because of their experience with similar strategies and software systems. Educational requirements have similar overlaps — almost all will have a bachelor’s degree in a relevant field, and many will hold an MBA.

It’s common to meet Sales Operations Managers who have worked their way up. From a starting role as a sales rep, SOMs can have long, happy careers at the operations management level or continue to rise. The next level up is a VP of Sales Operations or a Sales Operations Director position.

If you’re aspiring to be a Sales Operations Manager, take advantage of your company’s training programs and look for mentorship. The more you learn about sales processes, forecasting, CRMs, and creating strategies, the better off you’ll be. If you’re already a SOM, make your life easier with commission tracking software from QuotaPath. For more information on how you can streamline earnings and performance measurement, create your very own workspace.

With nearly every salesperson conducting their workday from home nowadays, we wanted to compile a list of the best WFH tips for salespeople. We asked some of the top experts, some of whom have years of experience working from home offices and some who are brand new to it. Keep reading to see what they have to say about working from home in sales.

Stay hydrated

“Always keep a full glass of water next to you at all times, as talking for hours at a time can get you dehydrated. When that happens, your voice starts to sound more hoarse and can crack, which you don’t want when you’re on the phone with an important client. So always make a habit of refilling your glass of water on the way back from the bathroom or anytime you have a reason for getting up off the couch.”

—Sharon Van Donkelaar, Chief Marketing Officer at Expandi 

Surround your workspace with your “why”

“This should consist of photos of why you are doing what you’re doing. It could be photos of your family, a car you want, a goal, photos of a house you want, people you admire, etc.

When you look at them they should influence you to make that extra call, to keep on going when it gets tough. If they don’t then your goals are not compelling enough.”

—Sean McPheat, CEO at MTD Sales Training

Batch your emails

“In order to keep myself sane in a day where my structure has all but disappeared, batching my emails has empowered me to reclaim my schedule. I only check and respond to emails twice a day, usually from 10a to 11a and from 3p to 4p. 

The rest of the day, I keep Outlook offline. This stops the barrage of urgent emails from flooding my inbox with distractions. I quickly realized that few emails are really as urgent as they first seem, and oftentimes, the proper team member responds instead of me feeling obligated to always chime in.”

—Brian Kantor, Digital Account Director at Hearst and Founder at Pour My Party

Designate a workspace

“A designated workspace is a must. Make sure to have a desk, good lighting, and attractive background for video calls. Invest in (or make your employer invest in) tools like a large monitor, ergonomic office chair, etc. It’s also important to have a clutter-free and inviting space so that you can be your most productive self every day.”

—Tolga Sakman, VP of Enterprise Sales at JotForm

Schedule a break

“One of the biggest challenges in WFH is to stop working, step away, and establish a balance between work and life. Without a scheduled interruption, I just continue to work, since there is always one more task to complete. To counter this, I start the week by looking at my calendar and the weather forecast. Then I block 3-4 hours on a day with great weather in the forecast and use this time to bike, hike, or sail.”

—Henning Schwinum, Chief Evangelist at Vendux Interim & Fractional Sales Leadership

Establish ground rules

“Establish ground rules for other people in your home or who, while you work, share your room. When you have kids that come home from school when you’re already training, they need straightforward guidelines on what during the period they can and can not do.

Furthermore, just because you’re home and will allow help workers into the house or take care of pets doesn’t mean that other members of the family could believe you’re still going to do so. If that’s how you plan to break the household labor, that’s good, but if you just take it all on by chance since you’re home, you will feel taken advantage of it, and you might benefit from your efficiency.”

—David Meltzer, CEO at East Insurance Group

Meditate

“The pandemic has forced all of us to dive deeper into the digital communication world than we ever have before. While there are a lot of benefits to it, there are also some drawbacks. The lack of human interaction coupled with the perceived pressure of 100% work-uptime can become all-consuming. 

Take time for yourself daily, make sure you reground when you get spun up. Not taking this time can have diminishing returns on your productivity.”

—Ed Carroll, Vice President of Sales at JRNI

Maintain a morning routine

“Maintaining a schedule, and more importantly, a morning routine has helped keep me energized and productive while working from home. Waking up at the same time I normally would when working from the office and completing my personal morning activities, i.e. workouts, meditation, etc. helps me start on a positive note and sets the tone for my day.

Scheduling meetings, to do’s, and breaks, as well as continuing my normal work hours and shutting off when the workday is done also helps with work/life balance as it is very easy to blur the lines when it all takes place in the same environment.”

—Gill MacPherson, International Commercial Growth Strategist at OnCrawl

Wear your shoes 

“When I first started working from home (WFH), I struggled with motivation. My workdays felt like weekends, and my sales suffered.

One day, I forgot to take my shoes off after running an errand. I felt reinvigorated that workday. Was this because of the shoes? The next day, I wore my shoes again and experienced the same motivation. The following day, I closed a significant new account.

Wearing shoes was tricking my brain into thinking I was in an office. I made wearing shoes while I worked from home a habit. The weekend vibes evaporated, and I started crushing my sales goals.”

—Christian Banach VP, Business Development at Genuine Interactive and Outbound New Business Consultant at ChristianBanach.com

Segment your life

“I highly recommend segmenting your life. For example, you should not work in your bedroom. If you have a home office or spare room you can dedicate to work, that is best. If not, try using the living room or kitchen. Just make sure you get out of the bedroom!”

—Kevin Miller, CEO at The Word Counter

Check your appearance

“My number one working from home (WFH) tip is to focus on routine maintenance. When working from home, it’s important for me to keep an office-like routine. I get up at the same time, eat the same breakfast, and approach the day in the same way. I also wear office-appropriate clothes every day, because you never know when you’ll need to jump on a video call with a prospect. Nobody wants to buy software from someone wearing flannel PJs and a sweat-stained cap. Your online appearance makes a real difference, so I also routinely check my surroundings to make sure what’s behind me puts our company in the best possible light.”

—Pat Criss, Sales Director at RFP360

Keep networking

“WFH has limited salespeople from doing what they do best…networking! It’s imperative that sales professionals find (or create!) virtual opportunities to keep their network alive and connections warm.

Rather than viewing connections as purely transactional, Noam’s sales secret was constantly creating opportunities to keep his network warm and not to let important connections go cold. Examples could be sending interesting articles to those he knew would appreciate them or going out of his way to introduce two strangers in his network that would benefit from meeting.”

—Noam Weisman, CEO at Hunterz.io

If you follow these tips, you’ll be hitting your quota in no time! If you need help tracking your commissions and quota attainment, sign up for QuotaPath today!

How can you ensure your reps feel connected, motivated and ready to attack a new offer or sales cycle? It’s all about a great sales kickoff. This annual summit is the go-to for agencies and companies eager to launch an offer or product with incredible energy.

With COVID-19 forcing widespread changes in company structure, many sales reps are working remotely. That means your sales kickoff has to look and operate differently. Getting prepared for your virtual sales kickoff could be the difference between a successful cycle and a big, fat flop.

Preparing for a virtual sales kickoff

A virtual sales kickoff can be a very pricey investment for the company. However, if done properly, this investment is worth it for the business and employees. Simply “winging it” is not an option, given the size of investment for your enterprise. The first thing to tackle is the overall layout. Management must get organized beforehand. Paying attention via computer is hard enough without waiting for the host to shuffle through notes or figure out the interface.

• Get organized. Know what the entire kickoff is going to look like. This includes directing attendees to supplementary materials and creating a detailed speaker schedule.
• Don’t plan full days. It’s almost impossible to stay alert for a full 8-hour kickoff in person. Now that you’re planning a virtual SKO, it’s even harder to have people pay attention. Don’t expect that to happen when salespeople are at home, surrounded by kids, pets, and other tempting distractions.
• Plan to be flexible. Have a blueprint in place but know that it’s likely things will change. Use your plan as a sort of road map, but remember that it’s okay if people pull to the side to admire the scenery. These side discussions can be useful tools. You may learn more about your sales team’s needs or encounter questions or concerns you hadn’t considered before.
• Don’t forget breaks. Build in pauses for bathroom visits, snacks, and lunch. Consider blocking off time for group stretching and sending out a few yoga poses to boost energy.

How to structure sessions for a remote sales kickoff

As you transition from in-person SKOs to a remote sales kickoff, it’s important to keep some familiarity. If your existing session structure works, stick with it. For most sales divisions, that includes addressing any or all of the following:

Look back/recap

Many sales kickoffs include a chance to revisit the previous year/cycle and see what everyone did right. It’s also a time to figure out what went wrong and why. Try to keep the tone upbeat, so you don’t tank the SKO energy from the get-go, but be realistic. Touch on ways to improve, and then introduce positive themes, such as “Succeeding Together, Apart” or “Mask On, Sell Out.”

Training

If you’re introducing a new client or product or moving to a new sales platform, here’s where the training starts. Screen sharing makes it easy to walk through a tricky interface as a group. You can showcase key features and demonstrate a product’s highlights quickly and effectively.

New comp plans

Everybody’s favorite topic: money. If your compensation plans are changing, especially in the wake of COVID-19, be transparent. Leave room for questions, send out the terms in writing without being asked. Doing this pre-SKO can save a lot of time and stress.

Breakout sessions

These mini meet-ups are workshop-style conversations within the main event. They’re shorter, more focused, and ideal for smaller groups that want to discuss sub-topics and experiences specific to their department or team.

Team building

Team-building exercises are always important, but more so now that everyone is scattered. Coworkers miss the camaraderie, and new team members never had those heartwarming water-cooler moments. What these exercises look like depends on your existing company culture and what feels right.

• A virtual 5-minute dance party
• Quiz participants about a new product or company history
• Open mic hour (have people sign-up beforehand and set a concise time limit)
• Announce an online “break room” that salespeople can use during the week to meet up

One-on-one networking

Encourage — or mandate, your choice — more senior salespeople to interact with new team members. These one-on-one sessions are mutually beneficial in unexpected ways. Schedule them as part of the kickoff, but pair people up ahead of time.

Create your layout, then start with a bang. You need to grab people’s attention before their minds start to wander. This could be a killer intro with tempting numbers; get the team revved up about how much money they could make. Or it could be something different entirely.

It may not be normal, but it can be fun!

If you’re looking to shake up the status quo, explore ways to make the virtual format more fun.

Send swag beforehand

Freebies are always enjoyable. The pens, bags, and other swag clients send to get the team excited can be forwarded from HQ before the SKO. It’s easier to get pumped up when the gear is right in front of you. It makes everything seem more real.

Cover expenses for your team’s meals

Set a per diem to cover food delivery, and make lunch part of your SKO. People have to eat anyway, but ordering in feels more special.

Hand out awards

Who’s “Most Likely to Forget to Mute?” Or, who’s “Most Likely to Make the First Sale?” Awards can be funny, motivational, serious, or almost anything in between. Just keep them appropriate.

Host a virtual scavenger hunt

There are countless virtual scavenger hunt ideas for team building purposes. Some involve finding items around the house and taking a picture. Others are challenges that take participants all over the internet. You can make yours relevant to your company or a particular client, combining fun and education.

Take advantage of being remote

For now, social distancing means selling remotely. But separate doesn’t have to be “less than.” Work with your circumstances instead of against them, and you may discover opportunities. For instance, you can hire someone special to speak remotely that you otherwise wouldn’t have been able to host in-office.

You can do remote-specific training, and choose the learning software that meets your needs. This is especially relevant when the team is planning on reaching out to customers remotely in the coming months. Educating employees on virtual etiquette and remote-inspired tips and tricks helps everyone acclimate. It could even help make clients more comfortable down the road.

A virtual sales kickoff isn’t bad; it’s just different. In many cases, it can be an opportunity to explore creativity and find new ways to craft a successful launch. Once you’re in business, create a workspace on QuotaPath and make tracking those hefty commissions easier than ever!

As of 2017, 5.7 million professional salespeople were marketing either remotely or face-to-face in the United States. Of those, about 52.8% worked in outside sales. The remaining 42.7% were dedicated to inside sales. That’s a fairly even split, so what would make companies or reps choose one over the other? When it comes to inside sales vs. outside sales, what’s the difference?

Inside sales vs. outside sales: A quick look

It’s popular to argue which type of sales is better. This debate may be fun for those invested in one method over the other, but in truth, one isn’t objectively better than the other. They’re just different.

Inside sales

Inside sales are so named because they occur inside the sales agency or company sales department’s framework. Rather than going to meet customers face-to-face, reps take care of everything from prospecting to converting remotely. Traditionally, this meant reaching out to prospects by phone. Today, telesales has expanded to include a diverse array of communication. Reps may connect with clients via email, text, video conferencing and even social messaging.

Outside sales

Outside sales, sometimes referred to as field sales, involve reps going to meet prospects wherever they happen to be. This could mean drumming up business at big industry events or cold calling on companies at their own offices. In fact, the Department of Labor has its own definition of what it means to be an outside salesperson. Basically, it’s anyone who makes sales outside the office.

Inside sales vs. outside sales: What it means for the company

Some companies use both inside and outside sales for a more diverse approach to onboarding and managing clients. Others, particularly startups, may not have the infrastructure to support outside sales. In 2020, when COVID-19 has forced many teams to work remotely, there’s an understandable uptick in inside sales. Whether or not that trend sticks remains to be seen.

Here are a few other considerations:

Types of products sold

You’re more likely to see inside sales used in B2B sectors, including technology and SaaS. When prospects already understand their pain points and believe in the solution, all that’s left is explaining why your product is the winner. It’s also the preferred method for time-starved clients. Sometimes people just want to get what they need and move on.

Outside sales tend to be more popular with products or services that are too complicated or specialized to sell over the phone. It also comes in handy when you’re trying to compete for large, multiyear accounts also being courted by your competitors. In these cases, a phone call or email just isn’t enough. Some clients want the attention now, so they know they’ll also be taken care of later.

Average contract size

Contract values tend to be larger in outside sales because of the resources involved in bringing that client on board. Travel is particularly pricey and can be difficult logistically, so larger contracts equal better profits.

Sales cycle length

It takes longer to sell outside. Again, it comes down to logistics. The cycle includes traveling to the client’s location or an industry event, following up, and nailing down particulars. With all that back and forth, there can be weeks or even months between the initial introduction and an actual signed contract.

The immediacy of internet-based communication and everyone’s ability to read contracts and answer questions on demand makes for a faster cycle. Inside sales can close almost immediately if everyone is on task and agreeable to the terms.

Overhead

Outside sales teams are almost always more expensive to maintain. Inside sales reps need equipment and software as well as basics, such as a desk, Wi-Fi, and access to standard office supplies. You might provide a cell phone or laptop as an added perk.

Outside sales reps are always on the go and have to be equipped accordingly. This may include everything from a company car to plane tickets and hotel accommodations to per diems for food and taxi rides. Because closing deals in the field often involves dinner and entertainment, businesses also have to budget for extras like golf memberships and shows.

Scaling

Because inside sales are so efficient, it’s possible to connect with clients all over the world in a matter of minutes. Using email automation and other tech-forward methods allows for easy lead qualifications, so inside sales reps can focus on nurturing the most promising leads. Outside sales are mostly one-on-one. While reps might initially pitch a group at a conference or luncheon, nearly all deals close individually.

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Inside sales vs. outside sales: What it means for the rep

Once you’ve decided on your corporate sales structure, you have to decide who to hire. Part of that interview process should understand what skills work best for each sales scenario.

Personality and skillset

For reps, much of the decision between inside and outside sales comes down to personality. Outside sales reps are required to be outgoing. They’re often found attending luncheons, working booths at trade shows, and cold calling clients in person. Inside sales reps rarely meet clients in person; instead, they rely on the written word and phone calls.

It’s difficult for an introvert to excel at outside sales. Conversely, someone who loves being in the field and thrives on public speaking might not feel comfortable with inside sales.

Of course, the flip side is also true. Some less technology-adept reps may not excel at inside sales simply because virtual communication and text-based sales aren’t their forte. Thus there is the solution as video interview software, which allows real-time talks and eases the hiring and communication processes, and for the outsource workforce, it will be a great tool.

Additionally, outside sales reps need to be self-starters and responsible for managing their own schedules and sales goals. They typically wear business attire, while inside sales reps have more oversight and can dress down in theory because they’re not meeting with clients.

Experience required

Despite the differences in skills required, it’s not unusual to start with inside sales and progress to an outside role. That’s because inside sales allow for more interaction with management. Supervisors can see how a rep is learning, correct any issues promptly, and teach them the ropes one-on-one. Once a rep moves to outside sales, they’re largely on their own regarding day-to-day activities.

Outside reps also act as company ambassadors at high-profile events. Saving these roles for employees with more experience is a safer bet.

Pay

Both outside and inside sales work on compensation models, though most also incorporate base pay. Exact salary structures shift from industry-to-industry and are also dependent on geographic location. That said, outside sales reps typically have more experience and are compensated accordingly.

Per Payscale, the average outside sales representative’s salary is $49,822 annually. Add in bonus, commission, and profit-sharing, and that’s an average total of $68,853 yearly. Reps can make as little as $34,000 in total or reach well over six figures.

As for inside sales reps, Payscale says the average salary is $46,011 annually. Add in bonus, commission, and profit-sharing, and that number rises to $56,199 yearly. That’s about $12,000 less annually for inside sales vs. outside sales reps.

Upward trajectory

Studies show that inside sales are growing exponentially faster than outside sales. That’s not too much of a surprise considering the convenience that comes with tools like Zoom and internet-based sales platforms. But just because there are more opportunities in inside sales doesn’t mean it’s right for everyone.

Whether you funnel all your energy into inside sales, outside sales, or a combination, you need a smart way to track commission. Check out QuotaPath’s game-changing adaptable compensation solution, and discover a stress-free way to track commissions and compensate your team. Start for free today!

Over the past 3 months, I’ve met with over 50 sales leaders helping them build, fix, or refresh their compensation plans. Some of these VPs of Sales need a complete overhaul of their variable compensation structure. Some have a nearly flawless plan. The vast majority of sales leaders are just looking for a sounding board to make sure they are on the right track. Sound like something that would be helpful for you, book your own call, no cost.

I thought I’d share a few insights I’ve gained from these calls. However, I want this blog to be slightly spooky, due to the season. I’ll be framing the most common things I hear as tricks (things to avoid) and treats (ways to build a good compensation plan). So strap on your spookiest mask and let’s get going!

Trick: “I need to raise quota AND lower commission rates AND keep base salary static.”

Especially if new compensation plans are rolled out in conjunction with a new fiscal year, this topic comes up a lot. The management team has increased your financial target for the new year. You can’t hire a larger sales team to make your number, and you don’t have additional budget for more salary. You need to conduct research and set the salary amount for all your departments. New compensation plans should never be all bad, no good. That means you need to find a way to inject something positive for your sales reps, so they don’t feel spurned.

How can you inject some positivity into a tough compensation plan change? One way to do this is to reframe their quota or commission. If you have a monthly quota, change it to a quarterly quota. Try adding in an accelerator for those reps who over-perform. Increase paid time off. Expand your rep’s territory beyond a city to an entire state or region. Add in a recoverable draw to add some cash to their paychecks. Begin paying salespeople when the deal closes instead of when the client pays. Add in a bonus if they close a multi-year deal. Increase pricing to match your competitors’ price. Roll out an employer-funded mental health education program.

Treat: “How can I simplify my compensation plans?”

Music to my ears! Even without seeing their compensation plan, I (half-jokingly) tell most people they need to remove half of it. It’s very tempting to add in more components to compensation plans. Maybe you want to include a multi-year accelerator, a new logo bonus, or an activity requirement. Though each of these has merit in their own right, each time you add another part to a salesperson’s compensation plan, it adds complexity. With added complexity comes added confusion.

If you want to build a good commission plan, try to limit it to two or three components — we call them Paths. This will ensure everyone understands exactly how much they’re earning and why. If you’re reviewing an existing compensation plan and want to add a component, try removing one as well.

Trick: “The quota just feels right.”

Quotas should feel attainable and reasonable. Does that mean they feel right? Sure! However, quotas also need to be back by math, logic, and market standards. If your average contract value is $10,000 and the market average close rate is 10%, a $100,000 monthly quota isn’t realistic. That means your reps would have to run 100 demos to close 10 deals for $100k every month. I’ve had days when I run 5+ demos. I’m entirely drained by the end of it; I can’t imagine doing that every day of the month. On the flip side, say your average sales price is $50,000 and your demand is incredibly high. If your sales team closes 50 percent of their demos, a $100,000/month quota could be entirely too low!

There are several methodologies out there to help you figure out what a quota should be. Here’s my advice if you need a super simple option. Take your average contract value and multiply that by your average close rate. That gives you the value per demo. Multiply that by the number of demos a good rep should be able to run in a month. That gives you how much a good rep should be able to close in a month. If you have a quarterly quota, multiply that by three. As you scale and grow, you’ll have more data that should help you narrow in on a more accurate quota.

Treat: “I want sales incentive compensation to align with company goals.”

Great! Too often the company goals don’t align with the incentive pay offered to salespeople. Say, for example, a company is trying to reduce the amount of time it takes to collect the money owed to them by clients. If that’s a company goal, a smart sales leader might add in an extra incentive. If the rep gets net 30 terms instead of quarterly payments, they earn an extra 1% commission. Another example is the company is focused on closing as many new clients as they can with a contract value over $10,000 ARR. If that’s the case, the sales leader could create a $500 bonus for every contract over $10,000 that a sales rep closes.

If this is done well, you see everyone achieving their goals. However, if it’s done poorly, this can cause the opposite effect. Say your accounting team is focused on closing enterprise deals, but your marketing team is told that sales cycle is the most important metric. Your marketing team will provide smaller, quicker closing deals to your sales team. Your senior management team might praise your marketing team for their focus on revenue, but chastise your accounting team for failing. It might fall to the sales management team to identify this issue and help remedy it.

Trick: “Well, each rep has a different quota and variable compensation.”

Standardize your comp plans! Standardize your comp plans! I’ve written about this in the past. Employees bargaining for their compensation can lead to very nasty results. When every employee has a different commission rate because of their negotiation, employers tend to underpay women and people of color. “Not my company!” I can hear you yelling at me. I’m sure you’re very careful that all your employees are treated the same regardless of gender and race. However, the numbers don’t lie. It’s not done with malicious intent, but it happens.

Secondly, this causes additional confusion and effort for whoever has to calculate your commissions, though I know a tool that can help with that. Finally, with standardized compensation plans, you can articulate the career path well and your employees can focus on

This doesn’t mean that every single person has to have the same exact comp plan. Someone with a much larger territory might have a much larger quota and therefore a higher OTE. That’s normal and perfectly acceptable. What you do need to be aware of is when two employees have the same sized territory or quota but very different earning potentials.

Treat: “I want more transparency for my reps.”

I hear this pretty frequently, but I wish I heard it in 100 percent of my compensation plan consultation calls. If your employees don’t know how they’re paid, they won’t do the actions you’re hoping to pay them for. I’ve had conversations with people who said they were hoping to close more 2 and 3-year contracts. I asked them if they paid more for closing those deals — they do. I did a quick survey of their salespeople. Survey says: the salespeople didn’t realize it! If you think your comp plan is clear for your employees, do your own quick survey. Ask your team to describe their plan to you. If it’s not entirely correct, you need to add more transparency to the process. You should clearly lay out the different ways they get paid in one document for them to review. Most organizations have their sales reps sign this document, so they know everyone’s on the same page.

Also, sales reps should have real-time access to their commissions earned and the commissions they could earn from pipeline deals. That’s where QuotaPath comes in! QuotaPath is more than just a sales commission calculator, it helps reps track their quota attainment, set personal goals, and more! Sound like something you’re interested in? Book a demo with our team or create your own account for free.