Since we launched QuotaPath in August of 2019, I’ve heard a lot of reasons why people don’t use sales commission software. These are the three most common reasons I hear:

• We can calculate our commission in a spreadsheet
• Our commissions are too simple/complex for software
• Commission software too expensive

We built QuotaPath from our first-hand experience with a big problem in the sales industry: sales commission calculation sucks. Here are the 6 reasons we believe it’s important to automate your commission process.

Benefits of adopting a sales commission software

Time efficiency

Most organizations spend hours (if not days) calculating, verifying, and recalculating commission checks for their sales reps. Especially if the b2b sales team has one spiff, the SDR has another spiff. It can get incredibly confusing to keep it all straight. By automating commissions with software, the process can take just a few minutes every month/quarter.

With QuotaPath, you don’t need any complex formulas or an outside consultant to get accurate commissions. If you have an especially complex comp plan, we’re here to help — no implementation fees. If you use CRM software, our Salesforce integration pulls in all of your company’s data and updates in real-time. This makes it easy to get your team up and running and data is exportable for you to upload to your payroll providers.

Reduction of mistakes

The term ‘fat-fingering’ can strike fear into the hearts of data-centric people. Take it from UBS, whose fat-finger mistake cost them $100 million. While your numbers might not be as large as USB, a simple spreadsheet error can be a headache to unwind.

If you’ve ever had a conversation with a rep that starts with “my commission check is wrong…” then you know the pain. Oftentimes, it requires you to write a check out of your payroll cycle or hold off until the next paycheck. Either way, the sales rep is annoyed that their compensation is wrong. Plus it causes a disruption to your week. By automating your commission process, you can reduce the number of costly human errors.

QuotaPath allows users to relax knowing that their commissions are correct the first time. And if you need to make a change in the compensation plan? It takes just a few minutes to tweak (or entirely remake) compensation plans.

Money savings

Save money by spending money on sales commission software? That sounds counter-intuitive. If you’ve ever done a search on Google, you may have gotten turned off by expensive enterprise solutions. These legacy tools are clunky, unintuitive, and take forever to set up. I don’t recommend them — I know from experience! Many of our customers have migrated to QuotaPath after poor experiences with these tools. Commission managers are looking for a modern and affordable sales incentive compensation solution for their team.

And spending money on a compensation management tool, you’ll likely save money in the long run. Between time spent to calculate commissions, the numerous back-and-forth exchanges with reps, and reps’ time away from selling there are countless wasted hours. These hours could be spent doing core tasks that generate revenue for the company while finding ways to cut costs where appropriate. For instance, Finance teams could consider exploring high-interest savings accounts reviewed to make informed decisions about optimizing their company’s financial management strategies.

Improved sales

When people track their progress towards goals, they are more likely to achieve them. This applies to goals from weight loss and quitting smoking to growth targets. With quota attainment tracking tools, reps are reminded of their goals regularly and are more likely to hit their quotas.

Within QuotaPath, there are two ways for reps to track progress toward a goal. With the Attainment module, they can see their quota prorated over time to see how their deals are helping toward hitting quota. They also have the ability to forecast deals in their pipeline so that they can maximize earnings potential. With MyPath, reps can create their own goals based on personal events. If they are saving for a house down payment or a fancy vacation, they can set an earnings goal and track toward it. It’s also a great way to keep their busy days organized and stay on track and motivated to hit their targets.

Transparency

This is the reason that I’m most passionate about. With sales commission software, there is no “shadow accounting”. Reps know — in real-time — how much compensation they have earned on deals. ‘Forecast Pipeline’ allows the ability to see how much compensation they could earn on deals in their pipeline. With QuotaPath, reps can log in and see real-time views of their earnings and what they’ve closed in a quarter. With the Earnings Detail View, they can drill into deals and understand why they made what they did on a specific deal. They have visibility into which deals pushed them into the accelerator bracket, and which ones pushed them over their monthly quota.

For commission managers and sales managers, sales commission software provides more visibility into individual and team sales performance. They can view deal data on both a macro and micro level. They have access to the same information as the reps. Finance teams don’t have to send out end-of-the-month commission statements because reps are aware of how much they have earned.

Source of truth

I’m sure you’ve heard software companies tout that they are the “source of truth” for organizations. While the term might be overused, QuotaPath helps align teams. Our commission tools offer a dedicated place where teams can look at the same set of data, instead of disparate spreadsheets. Juan Torres, Head of Global Sales at Prism.fm said it best, “With QuotaPath I know exactly how much to pay my reps. They can easily see how much they earn.”

Not only are earnings aligned, so are compensation plans. Using our sales commission tool, admins can distribute new compensation plans to all relevant reps instantly. Need to add in a quick spiff (or is it spif? Spiv?) or alter quota due to, say, a pandemic? QuotaPath’s Plans module has that functionality. Plus you can integrate your CRM to ensure all the data is accurate.

In uncertain times, investing in sales software can be tricky. Adding a sales commission software might seem like an unneeded expense. However, as you can see, it pays off very quickly for you and your team. Your reps will have a greater understanding of their earnings which means they will have more time to focus on closing more business. Managers will have more visibility and insight into team performance. Plus, you can use QuotaPath for free for your whole organization.

Originally published on March 27, 2020, updated on November 12, 2020.

Building a startup sales compensation plan that works for your company can be extremely tricky.

Oftentimes, it takes multiple iterations to reach an appropriate startup sales commission structure.

This blog will cover seven principles that will help accelerate the process of finding a sales commission structure for startups. Not sure what a compensation plan is? Check out this blog post to learn about the basics of a compensation plan.

First, there are three factors that need to be considered when creating a startup sales compensation plan.

Size/Stage of the startup

An early-stage startup typically has fewer employees and an inconsistent revenue stream. This is the stage when figuring out a solid sales strategy and understanding your value proposition is key in scaling revenue. In the growth stage, a startup is most likely to figure out how to optimize their sales strategy. No matter what stage, the sales strategy is going to have to adapt to the needs of the business. Once the startup is more established it becomes a lot easier to project sales targets based on historical data.

Runway

Startups are typically strapped for cash (or at least careful with where their cash is going). This means that the design of the compensation plan itself needs to be planned out to maximize efficiency early on. Cash-strapped startups make higher base salary compensation plans nearly impossible since there isn’t much cash in the bank. This holds especially true for companies that are pre-revenue. Having a blended mix of salary and commission is probably going to be the best compensation plan for the majority of startups. Don’t forget that equity is a powerful tool you can use as well!

Industry

This one is pretty obvious. Sales compensation plans can look different across various industries.

“SaaS companies typically have annual contracts, whereas consulting companies may have a month-to-month agreement,” QuotaPath’s Head of Growth, Graham Collins shared, “so you have to pay your sales reps accordingly. Do some research on the way your competitor’s bill and therefore pay their sales reps.”

7 tips for building a startup sales commission structure

1. Don’t overcomplicate the startup sales compensation plan

Keep it simple. The general rule is that if you can’t explain your sales compensation in one or two sentences, it’s probably too complicated. We wrote all about what makes a good compensation plan in a previous post.

Typically, a blended method with 50% salary and 50% commissions is the standard split for most startups. Of course, this is assuming that the product is fairly simple to sell and has a shorter sales cycle. If the product is more difficult to sell, it might be wise to do a 75% salary to 25% commission split. This will help with churn on your sales team. If you’re early stage and having to do an even higher salary to commission split, it might be too early to hire sales reps. In this case, you should consider focusing first on improving the product.

2. Be sure to cultivate the right culture

Cultivating the right culture for your startup, specifically on your sales team, is extremely important. When building your early sales team, it’s important to hire the right sales reps. You want reps that understand the problem you are solving and resonate with the mission of the company. The early hires are going to set the precedent for the sales team as the startup scales, so it’s important to vet them properly. It might even be helpful to hire someone with more experience in sales, to help train the next couple of hires. Our CEO, AJ Bruno, goes into more detail about how to cultivate the first sales hires into champions in this post.

There’s something to be said about creating a culture of competitiveness to keep reps motivated. However, be careful to not allow this to transform into a cutthroat sales culture where everyone acts as a “lone wolf.”

3. Make sure your reps have a clear understanding of your value proposition and your target market

At an early stage startup, the founder is typically the first salesperson. They need to be able to clearly convey their vision and drive to their sales team. If reps don’t have a clear understanding of the product’s value, it can be difficult to get initial customers to buy into the vision. If the founders can’t sell the product, there is a good chance that the sales team won’t be able to either. Check out this blog post for more on why product knowledge is key to the success of your sales reps.

4. Ensure quotas are attainable for your reps… but not TOO attainable

If only a small percentage of your reps are consistently hitting their quota, that may be a sign that the quotas are too high. Whereas if all your reps are hitting quota easily, that’s an indication that your quotas are too low. Even if you have superstar sales reps that hit their quota every quarter, you should also cater to the reps that aren’t as consistent.

If a rep is struggling to hit their quotas, the sales manager should focus on trying to improve the rep’s performance. QuotaPath is a great way to motivate your reps. They can visually track their progress and see how they compare to their fellow reps. Another way to help struggling reps is to sit in on their conversations. You’ll be able to see what the rep is potentially doing wrong and provide constructive feedback. If that isn’t working, it might be time to hire someone new to replace the lagging rep.

5. Make sure the B2B sales commission structure aligns company goals with the rep goals

A friction point that startups and companies with high sales rep churn face is misalignment between company goals and the reps’ goals. The person running the sales team needs to understand what drives each of their reps to succeed. An example of not understanding the reps’ goals is capped commissions. Very rarely, if ever, do capped commissions make sense, especially if a startup is looking to grow as fast as possible. For more info on capped commissions, check out this blog post about why capping your team’s commissions is almost never a good idea.

6. Designing a sales compensation plan for a startup that can scale with your business

As you scale your business, the last thing you want to worry about is making adjustments to your comp plans at every stage. The best way to ensure that your plans can scale is to keep them as simple as possible. Simplicity scales.
Of course, the sales incentive plan you have as a five-person sales team is going to change when you hit 50 people.

It’s important to optimize along the way to drive the behavior that leadership is trying to promote. You just don’t want the plan to change with every new hire.

7. Ensure that your reps can track their commissions and quotas

Sales reps hate not knowing what they’re going to be paid. They want to make sure that they are getting the commissions they deserve for the work they put into the startup. Being able to visually see how they are contributing to company attainment and personal goals is a powerful tool to motivate sales reps.

Luckily, visually tracking commissions and quotas is made simple through QuotaPath. Built by salespeople for salespeople, QuotaPath empowers the individual sales rep to crush their quotas and make those important sales. If you’re interested in seeing how QuotaPath can work for your sales organization, sign up for a free 30-day trial.

Setting up compensation and benefits for startup companies

Remember that your total incentive package will include compensation and benefits. Consider your company’s stage of growth and be prepared to get creative, such as offering equity, flexible work arrangements, and opportunities for professional development.

Do your research by looking at what other startups similar to your stage offer. This will help you to set competitive and fair startup compensation packages.

Most importantly, be flexible and transparent. As your startup grows, your compensation and benefits plans may need to adjust. Keep your team in the loop and communicate regularly.

FAQs

How can I determine the appropriate commission structure for my startup?

To determine the commission structure for your startup, consider the following:

• Company’s stage of growth: A young startup may need to offer a higher commission rate to attract and retain top talent. As your company grows and matures, you may be able to lower the commission rate.
• Product or service you offer: Your product or service will affect the best way to structure your sales commission. For example, a SaaS company may want to offer a commission based on the number of recurring subscriptions a salesperson generates, while a software company may want to offer a commission based on the total value of the sale.
• Sales goals: What are your sales goals for the next year? Your commission structure should be designed to help you achieve those goals.
• Budget: How much money do you have to spend on sales commissions? This will help you determine the maximum commission rate you can offer.
• Team experience: How experienced is your sales team? If you have a team of experienced salespeople, you may be able to get away with a lower commission rate. If you have a team of less experienced salespeople, you may need to offer a higher commission rate to incentivize them.

Should I consider offering equity or stock options as part of sales compensation in a startup?

We recommend offering equity, stock options, or profit sharing in addition to sales compensation not in place. Our CEO offered startup equity best practices.

What are common mistakes in start-up sales compensation planning?

A common mistake when it comes to startup sales compensation planning occurs when leaders try to duplicate commission structures that worked at previous companies. A more complex plan that drove selling behaviors at a later stage company likely won’t be successful at a more volatile early-stage company. Another mistake involves not adjusting the plan frequently enough. We normally would say less changes are better. But at younger companies, you will need to make changes as you uncover more information about sales cycles, average deal sizes, and number of deals per month and quarter.

Originally published Nov 26, 2019, updated August 20, 2020

One of the great debates in cold calling methodology is the voicemail; to leave or not to leave? The anti-voicemail camp believes that by not leaving a voicemail, you stay undercover. You can call back later in the day and hopefully get someone on the phone. The other camp (my camp) thinks that a cold call voicemail is another valuable touch point.

To be clear, we’re talking about leaving a cold call voicemail. I’m not talking about leaving a voicemail when you’re working on closing a deal. It’s perfectly acceptable to leave voicemails when you’re following up with someone with whom you’ve already had a conversation.

Why leave a cold call voicemail

By leaving a high-quality voicemail message, you can define why you’re calling and encourage a response. Before we dive into how to leave one, I want to get one thing clear though. I do not leave voicemails with the hope of callbacks. I have worked with sales reps who get tons of callbacks even to missed calls without a voicemail! I’ve never been that lucky (or skilled) so I don’t expect callbacks. As a salesperson, you shouldn’t count on callbacks from your voicemails.

My goal when I leave a voicemail is to either:

1. Get the point of contact to send me a response to my cold email. I only leave a voicemail after I’ve sent an email. Getting an email response is my primary reason for leaving a voicemail message. My emails contain way more information about what I’m selling than a voicemail message ever could.
2. Encourage the point of contact to pick up when I call again. This requires you to be calling from the same number whenever you call. One of the reasons I don’t like tools that obfuscate your actual phone number.

How to leave a cold call voicemail

You want to keep your voicemail short. The sweet spot seems to be around fifteen to twenty seconds long. Any longer and you risk your voicemail message being deleted or ignored. If it’s any longer you run the risk of an unclear or nonsense message. I’d recommend coming up with a voicemail script and using it at first. You don’t always have to follow your sample script verbatim, but it gives you a good structure.

Greeting

Just like with a cold call, the first few seconds of your voicemail are the most important. It’s very easy to delete voicemails and your prospect will decide very quickly if they want to listen to the rest of it.
Who you are and why you’re calling. That’s what you need to cover in your greeting. Make sure you’re speaking clearly and succinctly, especially for your name and the company’s name. Then give a little taste of what your company does. Enough to give them a basic idea and get them intrigued about what you do. Don’t spend 30 seconds giving an elevator pitch. Remember, the sweet spot is around twenty seconds. It should sound something like this:
“Hey Marisa, this is Graham with QuotaPath. You might have seen my email this morning. QuotaPath is a commission calculating tool built with the sales team in mind.”

Ask

What do you want the point of contact to do? As I stated before, you’re not generally looking for them to call you back. If you’re waiting for callbacks, you’re likely to be disappointed. Instead, you should try a variation on this line:
“I’d love to connect and see if we could help you with your commission tracking. As I mentioned, I emailed you this morning, so if you could check that out and get back to me that would be great!”

Close

You want to remind your point of contact who you are and what company you’re from right after the ask. I give my phone number at the end on the off chance they want to call me back and can’t find my email. Here’s how mine would sound:
“Again, Graham with QuotaPath, (207)555-5555. Have a great day Marisa!”

When to leave a cold call voicemail

I’m sure there are numerous studies on what hours to leave a voicemail. Should you leave voicemails on Mondays? Should you leave them at 9 AM or 2 PM? That’s not my specialty, so I’ll leave that to the experts. Instead, I mean two major things:

1. Don’t leave a voicemail on your first call. It’s no surprise that people are hesitant to answer their phones when it’s an unknown number. As a salesperson, if you call a few times your prospect might be curious enough to pick up after three or four missed calls. If you leave a voicemail on the first call, you’ve given yourself away as a sales rep.
2. After you send an email. I mentioned it before, but because salespeople are not expecting callbacks, they should have an email to reference. If callbacks happen, all the better!

Putting it all together

So this is what a cold call voicemail script would sound like if I was to leave one today:

“Hey Marisa, this is Graham with QuotaPath. You might have seen my email this morning. QuotaPath is a commission calculating tool built with the sales team in mind. I’d love to connect and see if we could help you with your commission tracking. As I mentioned, I emailed you this morning, so if you could check that out and get back to me that would be great! Again, Graham with QuotaPath. Have a great day Marisa!”

Big news has hit the sales community today. Drum roll please… We’re excited to announce that QuotaPath has entered into a strategic partnership with Revenue Collective, a membership organization of over 3,000 sales and marketing professionals. Together, we’ll work to help sales professionals better understand their compensation and help executives and companies more accurately set, track, and predict commission-driven compensation.

What this partnership means to us

When it comes to compensating salespeople, a thoughtful and focused strategy is critical to driving the right behaviors and business outcomes, but designing comp plans is a delicate balancing act – equal parts both art and science.

Sales leaders are constantly trying to model comp plans that incentivize their front-line teams. Individual sellers are often left to their own accord when figuring out how and when they get paid. It’s our mission at QuotaPath to provide end-to-end transparency and empower sales reps to better understand their comp.

Thousands of Revenue Collective Members turn to its “#comp_plans” Slack channel looking for best practices and insights from others in the community. We’re thrilled to join this community and provide thought leadership through jointly-produced webinars, research reports, and surveys. We have a ton in store to demystify variable compensation for sales organizations all over the world. We’re also creating a “#qutoapath” branded Slack channel where Members can interact directly with our team, get access to upcoming feature releases, and more.

“I’m incredibly excited to partner with QuotaPath and have discovered through conversations with their CEO, AJ Bruno, that they share our commitment to unlocking the professional potential of revenue leaders around the world,” said Sam Jacobs, founder and CEO of Revenue Collective. “As we surpass 3,000 Members, I’ve never felt more confident and optimistic about our opportunity to truly change our Member’s lives for the better and our alliance with QuotaPath is yet one more step on that journey.”

How to get involved

If you’re interested in joining Revenue Collective, information to apply can be found here. Come join the exclusive organization designed to support the professional development of revenue leaders at high growth companies from more than 100 cities across the world. And if you haven’t done so, sign up for QuotaPath’s free commission tracking software. See you on Slack soon!

Are you working from home due to COVID-19 like a lot of salespeople? You probably burned your way through Tiger King months ago, finished the Aaron Hernandez documentary in one sitting. Maybe you’ve even binged through Babysitter’s Club. So what now? Well, there’s the (admittedly niche) category of sales movies that every good salesperson should watch at least once in their lifetime. You’ve probably seen a few of these sales movies, but why not check a few more off your list!

Glengarry Glen Ross (1992)

Okay, you can’t have a list of sales movies without including this classic. You can barely walk through a sales floor without hearing an account executive telling a sales development rep that “coffee’s for closers”. Next thing you know you see a sales manager writing “Always Be Closing” on a whiteboard. It’s over the top and it’s not really applicable to modern selling. If you want to earn respect in a sales pit, you have to watch it. I don’t make the rules. Bonus: Alec Baldwin gave a Christmas parody reprisal of his famous character on SNL as an elf version.

Salesman (1969)

This is a dark horse movie and don’t be surprised if you’ve never heard of it. It’s a documentary made in 1969 that follows four bible salespeople as they travel across the eastern seaboard of the US. A fascinating look into the real world lives of the salespeople who blazed the trail for us all. It’s a bleak look at the lives of 1960s salespeople and it will make you thankful for screen shares and cell phones. Also, if you’re struggling to hit your quota right now, you will definitely relate to one of the main characters, Paul. Then as soon as you finish it, you can watch the hilarious parody of it called ‘Globesman’, an episode of Documentary Now on Netflix. A rare option, but one that should be on your list of sales movies!

Tin Men (1987)

Another look at door to door salespeople, but a less realistic and funnier view on what it’s like to sell in a bygone era. Plus anytime you can get Richard Dreyfuss (Bill “BB” Babowsky) and Danny Devito (Ernest Tilley) on the screen at the same time, I’m in. It takes place in the 1960s and balances humor with drama well. Don’t expect to pick up any LinkedIn prospecting tips, but it’s worth checking out.

The Wolf of Wall Street (2013)

The classic sales interview question “sell me this pen” had been asked for years before this movie. And the nonchalance and swagger with which Leonardo DiCaprio asks it is unmatched. Although the response that he accepts as a great answer is hotly contested, it remains a frequent sales interview question. In addition to this scene, the movie shows a raucous and at times unbelievable look into the lives of stockbrokers in the late 1980s.

Jerry Maguire (2000)

The most famous scene in the movie, “SHOW ME THE MONEY”, could be a case study in how to retain clients. I’m serious, sales professionals have at least three major takeaways from this scene. Tell them what they need to hear while being realistic on your expectations. Match their tone; if they’re excited and joyful, you should be too. Use your listening skills to determine what exactly is most important to the client — in this case it’s the money. Be prepared to put yourself out there and ask for the business. Oh, and don’t be afraid to get on the phone with your clients! Even if you have to use a late 90s flip phone like Cuba Gooding Jr. and Tom Cruise.

The Truman Show (1998)

Bear with me on this one, I know it’s not like most typical sales movies. I’m specifically talking about a phenomenon in sales that I refer to as “happy ears“. All salespeople know this situation. The client has no objections to your sales pitch. Your prospect has no questions about the pricing. A prospect who has no questions and no objections seems like a perfect situation, but that’s not the reality of the situation. The reality is that they are bored or made up their mind on another vendor and don’t care to listen to you. The reality is that you’re going to lose that prospect to another provider, one who asked questions and had objections. What does this have to do with The Truman Show? Well, at the beginning of the movie, he has life “happy ears”. His life is easy, everything is perfect, and everything works out for him. If he had asked more questions (or offered more objections) the reality of the situation would have been more apparent. At the end of the movie, he does and the truth is revealed.

Your favorite sales movies

Honestly, there are countless sales movies you can learn from! If you know what to look for, just about any movie can teach you something about sales. If you’re looking to learn more about sales, you should check out the QuotaPath blog, which features frequent sales training… and sometimes fun lists! Feel like I missed some great sales movies? Send them my way!

You invested your company’s money into a call recording software. Your reps are all recording all their demos and sales calls. There are lots of benefits from recording calls. The most value you’ll get from recorded demos is if you listen to them with your reps and use them for sales coaching. If you’ve taken the time to invest in call recording software, you need to find the ROI. That ROI can come from improved win rates, better sellers, higher average contract values, or better quota attainment.

Every great sales leader I know believes in recording calls and call review sessions. Here are some best practices I’ve picked up from top sales managers through the years.

Listen beforehand

The first thing you should do if you want to give feedback for a call is to listen to the whole conversation beforehand. Take notes and mark the call for specific coaching moments. Giving sales coaching like “here are the three moments that you cut off the buyer” is a lot more powerful than ambiguous advice.

This is important because you don’t want to be surprised midway through the call if it takes a sharp turn. If you know the outcome of the call, you can give more direct feedback.

Don’t just use good calls or bad calls

It’s a lot more fun to listen to a call where the deal ends up closing than calls that go poorly. No one wants to revisit their failures, sellers included. However, you have to be willing to listen to your failed calls if you want to get better.

On the flip side, the same can be said for a deal that is a one-call-close! Your sales rep can learn There is always room for improvement on demos, so you shouldn’t focus entirely on the poor calls.

Use the Socratic Method

In teaching, there is a theory called the Socratic Method which is essentially teaching by asking question after question. This works because you’re forcing people to think critically about the way they think. You then help guide them to the right answer instead of just telling them.

I apply this method when it comes to sales coaching. Instead of saying “you need to ask the buyer who else is involved with this decision!” You can ask “at this point in the call do you know who else is involved in the decision? How would you find that out? How could you word a question that would give you that info?”

Share the pause button

This is a simple one, but as a sales manager, you shouldn’t have exclusive control over the pause button. I mean this literally — your team member should be able to pause the recording if they want to ask a question or point something out — and metaphorically — you shouldn’t be the one to give feedback every single time. Your salesperson should be able to identify moments that need improvement or moments that they’re proud of.

Whenever you pause the call recording, you as the sales manager don’t have to be the first one to speak every time. Sometimes it’s valuable to ask your sales rep “how do you feel about that question?” This way, the sales rep will be comfortable speaking up when they feel there is an opportunity to do so. The goal should always be for your sales team to be comfortable listening to calls with you without feeling like they’ll be attacked.

Treat sales coaching like golf coaching

I’m terrible at golf. However, I’ve taken a couple of golf classes, and they were very different. At the start of my first lesson, the coach had me take a few natural swings. He then spent 5 minutes laying out all the things wrong with it. My hands were in the wrong place. My stance was too narrow. Turns out my head was low. Also, my elbows were too tight to my body. It went on and on and after the fifteenth issue with my swing, I tuned it out.

Compare it to my second lesson. My coach took a look at my swing and said “okay, your stance is narrow”. Then they spent half an hour working on my stance with me. Once I was comfortable with that stance, we moved on to another issue. We covered 2 issues in an hour class, but I improved substantially more than my first lesson. What does this have to do with recorded calls? Focus on improving one or two issues with your rep’s demo process instead of trying to fix every little thing that’s wrong. If you try to improve everything that your sales rep does poorly in one session, you’re going to end up with a discouraged salesperson.

Be consistent with your feedback sessions

I had a recurring meeting with each of the people on my sales team for call review sessions. Every week, I would set aside an hour for every person on my team to review calls. I would try to listen to 3 cold calls they made and 1 demo they ran during that hour.

Because this meeting was scheduled and set to happen every week, my sales reps grew accustomed to it happening on a regular cadence. If you don’t have a consistent schedule for these sales demo reviews, salespeople may perceive them as a punishment. You might have too many people on your sales team to provide feedback every week. Instead, you can push it to every other week or set up a peer review session. Ensure that you are doing these call reviews on a regular basis because otherwise the guidance won’t stick.

Bonus: Speed up the call

Here’s a bonus technique I picked up as a sales rep. Like a lot of people, I hated the sound of my own voice. It took me entirely out of my comfort zone. It’s important to take salespeople out of their comfort zone, but it shouldn’t be because of their own voice. This is a result of sounding higher pitched than we hear our own voices in our heads.

I discovered that if I sped up the call recording even just 15%, it no longer sounded like me. It was higher pitched, but everything was higher pitched! It totally resolved any issues with listening to my own voice. If you’re doing sales coaching with a rep that expresses this concern, try this trick! This has the added benefit of allowing you to listen to calls more quickly.

If you’re a VP of Sales or a CRO, training on how to listen to demos should be part of your sales management training. Don’t assume that because someone is a seasoned sales manager, they are inherently great at sales coaching. Sometimes the sales coaches need coaching! Ongoing sales management training is just as important as sales training for reps.

I think the ease and technology behind call recording is one of the biggest improvements to sales in the past decade. Every sales organization should be taking advantage of software (or hardware) to record their sales calls and cold calls. But don’t forget, in order to maximize the value of these recorded calls, you need to put sales coaching in play. If you want to track your reps’ performance, that’s where QuotaPath comes in! You can track quota attainment, calculate commissions, and reps can set individual financial or performance goals using MyPath.

My first day on the job at my first sales job, right next to my laptop and branded coffee mug, I found a handheld voice recorder. Think like what you see journalists from the early 2000s would hold up to interviewees’ faces before the ubiquity of smartphones. I asked what it was for and was quickly told “oh you’re going to record all your demos”. Gulp. Why would they want me to do that? I was hesitant at first, as almost all salespeople are, to have my words recorded forever. But after recording my first few calls, I realized that it was vital to my success in sales.

Four reasons I always have my sales reps record their sales calls

1. Recording sales calls is a powerful training tool.

This is the most obvious, and most important of the reasons to record sales calls. Unless you’re able to listen to every single sales call that your team makes (unlikely) you will miss nuances in the way your reps discuss pricing. It’s especially important early on, as sales hires are ramping. It’s equally important for seasoned reps to continue recording their calls as they mature. It will keep their messaging sharp, ensure they are updating their objection handling responses with new information, and make them better sellers in the long run. Keep in mind, call listening is just as important as call recording, which is a topic I’ll cover in later blog posts.

2. Recording calls holds people accountable.

Recording calls holds people accountable. If people know they’re being recorded they are more likely to ask about the full decision-making process. They’re less likely to fudge product timelines or take the easy way out when a tough objection is presented. The same goes for the prospect. When they know that they’re being recorded buyers are less likely to make unrealistic promises or overstate their authority. Always make sure prospects know they’re being recorded since many states have two-party recording consent laws.

3. No one has a perfect memory.

“If it’s not in Salesforce it doesn’t exist” is one of my favorite sayings. Every good salesperson logs meeting notes immediately after a demo, right? Well, unless they have another call right after. Or it’s 6 pm. Or it’s Friday. Or it was a bad call. There are plenty of reasons why someone might not write down all the details from their call. Also, something a buyer says off-hand might be important to them but not to the seller. If you have a recording of the call, it’s easy to go back and review.

4. Technology has made it easy to find trends.

Just like virtually every part of the SaaS ecosystem, call recording has seen a huge leap in its functionality due to big data. Now instead of using a notepad to track the number of “um”s and “uhh”s, a good call recording tool will do this for you. It will analyze the amount of time your reps spend talking vs. listening so you can compare your top reps vs. bottom performers.

There are a lot of different options for technology to record your demos and cold calls automatically. I’m trying to stay vendor agnostic here, so I won’t list any of them, but they each have their pros and cons. I’d encourage you to check out a few options and make a choice based on your organization’s needs. But whatever you choose, make sure your reps are recording their calls!

In our final installment in our sales compensation plan guide, we’re going to be covering milestone bonuses. Milestone bonuses are a fairly unique type of bonus and vary from the other types of bonuses we’ve covered (single rate and multiple rate) as well as the commission rates we’ve written about previously (single rate and multiple rate).

What you need to know about milestone bonuses

A final reminder that there’s a difference between commissions and bonuses. Bonuses are a set amount of money you earn for doing a specific task. Commissions are a percentage of a revenue number you earn for closing a deal. If a rep gets 20% of every deal closed, that’s commission. If a rep gets $200 for every deal they close, that’s a bonus.

A milestone bonus is earned if certain stipulations are met (example below) and doesn’t vary if you’re above or below those requirements. If you hit a milestone, you earn a set amount, any less you get nothing, any more you get the same bonus.

Examples of milestone bonus plans

An Account Executive has a monthly quota of $25,000 and when they hit that quota they get a $2,000 bonus.

A Sales Development Representative has a monthly goal of setting 25 meetings and earns a $1,000 bonus when they set 25 meetings. They also receive a $1,000 bonus if they happen to set 40 meetings (two milestone bonuses!).

A Sales Manager gets a $1,000 bonus if someone on their team closes a deal that is over $50,000. This is an ‘each individual deal’ style bonus where they earn $1,000 if the deal is over $50,000 but don’t earn anything if the deal is under that, and don’t earn any more if the deal is $100,000.

Pros of milestone bonus plans

Low financial risk. Because the organization knows the maximum amount that they’re on the hook for, it removes a bit of the risk of other commission or bonus plans. You know the maximum you’ll have to pay out is the milestone bonus amount.

Encourages consistency. Especially if your plan is similar to the first example above (milestone bonus for hitting quota), you’re likely to see reps more eager to hit their targets regularly. It encourages your reps to focus on getting to that number at the very least, which can create a culture of consistency.

Cons of milestone bonus plans

Can encourage sandbagging. This is the yang to consistency’s yin. If a rep has already unlocked their milestone bonus this month they might be more likely to push a deal to the next month in order to unlock next month’s milestone. That’s why I like to pair a milestone bonus with an accelerated commission rate. Speaking of which…

Doesn’t work well alone. Unlike most of the other compensation styles we’ve written about recently, it’s rare to see a compensation plan that exclusively employs a milestone bonus. It’s usually combined with at least one other commission or bonus rate.

Over 90% of compensation plans work in QuotaPath and with all the other features, it’s a no-brainer for the modern sales team. Beyond the known benefits of sales commission tracking software, QuotaPath is free and easy to try out for your team.

Calculating commissions is a breezy process. It’s automated, with accurate and reliable data, and easily trackable. A single source of truth makes sharing simple, scalable, and organized. Sales leaders have the insight they need to measure the effectiveness of their commissions. Sales and Revenue Operations only spend an hour instead of a few days tracking commissions at the end of each month or quarter. They can effortlessly make proactive changes to their comp plans as business needs evolve.

If you’re reading this and thinking, “Wow this sounds awesome. How do I create this type of environment for my organization?” We hear you! Our founding team has extensive sales backgrounds and firsthand experience in the challenges that come with managing commissions. It’s the reason we built QuotaPath and why we offer an automated way for reps to track commissions and quota attainment entirely for free.

Today, we’re excited to introduce QuotaPath Plus, our newest premium suite of tools offering advanced features for commissions clarity, management control, and sales team collaboration.

The benefits of QuotaPath Plus

Reduce friction in the commissions process

Fact: managing commissions has historically been tedious and time-consuming. We’re here to help simplify an over-complicated process. Most companies have been relying on spreadsheets with complex formulas to calculate commissions for decades. This method is manual, riddled with errors, and creates a “black box” environment that leads to rep shadow accounting and payout confusion.

Save hours or even days by automating commissions calculations with software that connects all your systems of record. With QuotaPath, everyone in your sales organization is able to visualize and understand every part of the process. Turn data into actionable insights so that you’re spending time focusing on behaviors that drive your business forward.

Save thousands in cost and time

Enterprise solutions are tired, clunky, and can take anywhere from 6-12 months to implement. That’s a year worth of time and resources that could be spent on revenue growth, process improvements, hiring, rep performance, change management, and the list goes on… Even other B2B commission tracking solutions require implementation costs and 4-6 weeks of assisted set up.

We understand that time equals money and that’s why we’ve invested in building a fully self-serve onboarding process. In just a few hours, you can have a built-out Workspace – with integrated CRM data, accurate comp plans, team views, and goal creation. It’s simple and intuitive, and if you need it, our team is available to help every step of the way. We’re even here to offer advice and help model comp plans, with no implementation or service fees.

Comp plan control & accuracy for your team

Depending on team size, roles, number of products, or sales cycle times, an organization could have anywhere from a few to a few hundred different compensation plans. When it comes time to make proactive or on-the-fly changes to comp plans, you can imagine how daunting this task may be.

With QuotaPath Plus, deal data and compensation plans are organized and clean. Our flexible Comp Plan Builder makes it painless to make changes that cascade to every rep assigned to a comp plan. Sales leaders and operations can account for deal administration, like one-off scenarios and earnings override, with Admin Deals.

Every person involved with compensation should understand the plans: sales reps, sales leaders, the finance team, and sales operations. If everyone has a clear picture to which deals count toward quotas, when accelerators kick in, and whether reps get paid upon cash receipt or closing, commissions become manageable and scalable.

Rep motivation & empowerment

Our product was built for salespeople by salespeople and our rep-focused mentality is what sets us apart from the rest. Reps need transparency to their goals, how they’re being comped, and team performance. With QuotaPath, they are able to understand how they are tracking against their goals and where to focus their efforts to get to the next level.

Our modern interface, data visualizations, and team leaderboards make it a software that reps enjoy using. Access to earnings and attainment gives them the confidence and motivation they need to stay focused on selling. From reps to execs, QuotaPath helps drive teams to be more aligned and successful.

Admin Controls to help manage commissions

We’ve set the bar high when it comes to improving the commission process, but there’s no barrier to using QuotaPath. Our Product-Led Growth model makes it easy for organizations to create an account, try it out, and make sure it works for you.

We’re excited to see all the amazing things your team will accomplish with QuotaPath Plus. To learn more, check out our pricing page or contact our team.

In our guide to sales compensation plans, we just covered single rate bonuses and why they are simple to follow but lack some flexibility. We’ve also written about both single rate and multiple rate commissions so far. In this blog, we’ll be covering multiple rate bonuses.

What you need to know about multiple rate bonuses

A quick reminder that even though some organizations use the words bonus and commission to mean the same thing, there is a major difference between the two. A commission is a percentage (either a single or multiple rate) that a sales rep earns of some revenue number. Whereas a bonus is a set amount (again, either single or multiple rate) that a salesperson earns for doing a certain action. If you earn 10% of every deal you close, that’s a commission. If you earn $100 for every deal you close, that’s a bonus.

A multiple rate bonus is when the amount you earn for your action varies based on things like your quota attainment, the size of the deal, the length of the contract, etc.

Examples of multiple rate bonus plans

An Account Executive is expected to sell 20 security systems per quarter and is paid $200 for the first 20 systems they sell and $400 for any systems they sell over 20.

A Sales Development Representative has a monthly goal of setting 25 meetings and earns a $0 bonus for the first 10 meetings that occur and $100 for every meeting (including the first 10) if more than 10 occur.

A Sales Manager is responsible gets a $1,000 bonus for every deal someone on their team closes that is a 1-year contract and a $2,000 bonus for every deal someone on their team closes that is a 2-year contract.

Pros of multiple rate bonus plans

Quite flexible. At QuotaPath, we’ve seen multiple rate compensation plans with as few as 2 and as many as 100 different bonus rates. While we certainly don’t recommend 100 bonus rates, a multiple rate bonus plan gives you the flexibility to accommodate for your specific needs.

Accounts for discounting, longer contracts, etc. Need to discourage discounting? You can set a lower bonus rate for deals with a high discount rate. Want to encourage longer-term contracts? Give your reps a higher bonus if the contract is 2 or 3 years long instead of 1. With multiple rate plans, you have the ability to account for the exact behavior you’d like to encourage.

Cons of multiple rate bonus plans

Added complexity. Any time you add additional tiers, rates, or payout schedules, you’re adding complexity to your compensation plan. While complexity can be necessary, it can also add confusion and prevent salespeople from truly understanding how much they’re earning. Be careful with complexity, it can ruin a great comp plan.

Not the best solution for revenue targets. This goes for all types of bonuses. Per the definitions we laid out above, a commission is a percentage of revenue, whereas a bonus is a set dollar amount. While you can account for different deal sizes with multiple rates of bonuses, usually a commission percentage is the better way to compensate salespeople who are selling contracts that can vary greatly in revenue value.

QuotaPath handles nearly every comp plan you can imagine, so whether your company uses bonuses, commissions, or a combination of both, we’d love to help you! Beyond the known benefits of sales commission tracking software, QuotaPath is free and easy to try out for your team.

So you’re creating a new compensation plan for your sales team. It needs to accomplish the company’s financial objectives, motivate your reps, and pay a fair rate, all while being straightforward enough to explain on the back of a napkin. Not an easy task by any means. We’ve written about some of our favorite compensation plans and about some nightmare situations (hint: you want to prevent nightmares) but here are some things to avoid when building a commission plan.

Complex numbers

Okay, I don’t mean complex numbers the way your high school math teacher might have. I don’t expect any sales organizations to pay (−2 + πi)% of every deal closed, but it might feel that way to some sales reps. I would highly encourage you to limit your percentages to 1 decimal place, and even then keep it to an easy number. A commission rate of 7.5% is a lot easier than 7.333% for a sales rep to understand. The same goes for bonuses: $96.32 is more difficult to comprehend than $100 per meeting.

Capped commission

There’s a scene in The Office where Jim Halpert has hit his commission cap and therefore has no incentive to keep trying to close deals and instead spends his time scheming devious pranks. This is what actually happens when you cap commissions. Salespeople aren’t motivated to work, so they don’t sell anything. I’ve yet to find a compelling reason to cap commissions, so if you have one, let me know. If encouraging employees to NOT sell isn’t confusing, I don’t know what is.

Commission cliffs

A more common technique (at least recently) than capping commissions is to create a commission cliff or floor. This means that a sales rep who fails to hit a certain quota attainment percentage earns nothing until they surpass that attainment. These can be very powerful tools. But where they get confusing is when the cliff is way too high, especially when it’s at 100% attainment. You’re telling your reps that if they do their job 95% of the way, they earn nothing. Try explaining that to a rep who pushed some last-minute deals across the line to hit a company target!

Decelerated commissions

Similarly to cliffs, “decelerators” have a time and place. If a sales rep only hits 40% of their quota, it’s fair to say they don’t get 40% of their total commission, no one would argue that. This can get confusing when you drop the commission rates people earn the more they sell. I’ve seen situations where a salesperson gets 10% commission until they hit their quota, then 5% of anything over 100% attainment. Why would you discourage someone from over-attaining? It doesn’t make sense.

While you absolutely should avoid the above confusing commission rates, if you plan already includes them don’t panic! QuotaPath can handle nearly every commission rate, confusing rates included… and it’s free to check it out. Sign up and build your compensation plan today!

If you’ve been following along on our blog, you know we’ve already covered two different types of variable compensation: single rate commission and multiple rate commission. Now we’re moving on to another type of compensation called bonuses. In the coming articles, we’ll cover single rate bonuses, multiple rate bonuses, and milestone bonuses, and the pros/cons of each.

What you need to know about single rate bonuses

Though they are sometimes used interchangeably, bonuses differ from commissions. While a commission is a percentage of a currency, a bonus is a set amount of money earned for doing something specific. This can be anything from selling a certain product to setting a meeting to hitting your quota.

The most basic format of bonuses is the single rate bonus. These are sometimes called spiffs or incentives, a single rate bonus is a set amount of money (say $100) for doing a specific action (say selling Product A) that doesn’t change based on how many times you do that action.

Examples of single rate bonus plans

An Account Executive is expected to sell 30 security systems per quarter and is paid $500 for each system they sell.

A Sales Development Representative has a monthly goal of setting 25 meetings and earns a $100 bonus for every meeting that occurs.

A Sales Manager is responsible for coaching and promoting their reps, so they get a $2,000 bonus for every salesperson on their team that gets promoted.

Pros of single rate bonus plans

Easy to explain. Even if you have a crazy bonus amount (like $3.45 per cold call made) it’s very simple to explain that for every action, there is a specific outcome. This can be motivating if it’s something that they have a lot of control over (for example, setting meetings or selling a certain product).

Can be changed without much issue. Because salespeople generally do the things you pay them the most to do, it’s easy to change behavior by simply increasing or decreasing the bonus you pay them. If you realize you need to set more meetings this year, you can easily double the value paid for a meeting. You might not see twice as many meetings, but you’re certain to see an increase!

Cons of single rate bonus plans

It doesn’t account for discounting. If you give your sales team any leverage to discount your products and you pay a set amount for each item sold, your reps have no reason to not discount — hurting your average sales price.

Overly simplistic. Lots of organizations reward for overperformance, which is something that can motivate sales reps to sell more, SDRs to set more meetings, and customer success to focus on renewals. However, with single rate bonuses, you don’t have accelerators to help you with that.

QuotaPath handles 90% of comp plans, so whether your company has a single rate bonus plan or something a lot more complex, you’ve come to the right place! Beyond the known benefits

of sales commission software, QuotaPath is free and easy to try out for your team.