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.

Here’s a scenario: It’s the start of the month and that means it’s time for sales commissions, which you’re in charge of calculating and paying. After you spend time to ensure it’s all accurate, a rep comes back to you and says “My commission statement is wrong!” or if you’re a rep, you’ve gotten a commission statement and thought “This doesn’t look right…”

This problem happens within nearly every sales organization and can cause serious employee turnover. I can’t tell you how many people I’ve interviewed who said they’re leaving their current job due to feeling like there’s no consistency in their pay. As a sales leader, it falls on you to ensure this doesn’t happen. Below are a few ways leaders can create transparency, alignment, and accuracy when it comes to calculating sales commissions.

Ensure your primary data is accurate

No one likes updating their CRM, I know. It can be tedious and time-consuming. But the most surefire way to an incorrect outcome is inaccurate inputs. One of the best ways to make sure the data is accurate in your CRM is to automate, automate, automate. Want to mark your opportunity ‘Closed Won’? First, you have to make sure the contract terms and ARR are correct. Need to make sure close dates aren’t in the past? Set up an automatic email reminding sales reps to keep their deal dates up to date.

Use a tool to help

It’s no question that using commission software is an easy way to automate and calculate commissions. However, if you use something basic like a spreadsheet or an antiquated commission software tool, your reps might not understand their earnings. Using a rep-focused tool like QuotaPath allows complete transparency between people earning commissions and those paying them.

Make sure everyone understands their compensation plan

Every person involved with compensation should understand the plans: sales reps, sales leaders, the finance team, and sales operations. If everyone understands which deals count toward quotas, at what rate accelerators kick in, whether reps get paid upon cash receipt or upon closing, etc. then there will be fewer questions later on.

Simplify your commission structure

The more complexity there is in a sales compensation plan, the more likely you are to have issues during payout. A good rule of thumb is to have 3 or fewer components (called ‘Paths’ within QuotaPath) in your compensation plan. If you’re looking for an example, AJ Bruno shared his favorite compensation plan.

By following this advice, you should be able to reduce inaccuracies within your sales commissions. However, the only way to remove human error from commission statements is to entirely automate your commission calculating. Great news! You can use QuotaPath to automate your entire commissions process. Try it now for free!

QuotaPath is here to help salespeople and leaders understand various commission structures. This post is the second in a series describing the different types of commission plans. Read to learn more about multiple rate sales commission plans, with examples, pros, and cons.

What you need to know about multiple rate sales commission

A percentage of a currency number paid to a salesperson is called commission. Each organization pays commissions a little differently, but often salespeople are paid on a revenue number. That number might be the contract value, the annual recurring revenue (ARR), or monthly recurring revenue (MRR).

Unlike Single Rate Commission, a Multiple Rate Commission structure makes it so salespeople earn a different percentage of deals they close depending on their quota attainment, the deal size, or how much they have sold in the month or quarter. Sometimes Multiple Rate Commissions are called Accelerators, Escalators, Tiered commission, or Multipliers. Typically, the more a salesperson sells, the higher their commission rate. There are instances where sales reps earn less on additional revenue. That’s known as capped commissions. It’s important to discern whether the multiple rates apply to previous tiers or not. Examples below.

Examples of multiple rate sales commission plans

An Account Executive has a monthly quota of $33,000 and earns a 10% commission of every deal they close until they hit 100% of their quota. Any revenue above their quota they earn 12%.
Note: this plan does not apply to previous tiers, as they don’t earn 12% of everything they have sold.

A Sales Manager has a monthly team quota of $300,000 and earns 0% commission of every deal someone on their team closes until they hit 60% of their quota. Beyond that point, they earn 3.33% commission of every deal someone on their team closes that month.
Note: this plan does apply to previous tiers, as they earn 3.33% of ALL deals closed that month.

An Account Manager doesn’t have an upsell quota and earns 5% commission of deals less than $20,000 and 10% commission of deals $20,000 and greater.
Note: this plan does apply to previous tiers, as they earn 10% on the entire deal if it is $20,000 or greater not just the amount above $20,000.

Pros of multiple rate sales commission plans

Rewards for overperformance. This is the major reason for a multiple rate commission structure. The more you sell, the more you make. Once a rep ‘unlocks’ the higher commission rate, they’ll want to sell as much as they can at that higher rate.

Punishes for underperformance. You want your top performers to make the most money, right? Well, that also means that your bottom performers don’t make as much money and are incentivized to sell more. This style of commission rate helps with that by paying a lower percentage for sellers who underperform.

Cons of multiple rate sales commission plans

More complex to understand. Nothing is as easy as a single rate commission. Any time you add any additional intricacies, you’ll end up with a more complex plan. Use round percentages to prevent confusion (10% instead of 8.875% for example).

This can encourage sandbagging. Especially if it’s a plan with a cliff, requiring the rep to sell a certain amount to earn any commission. You may encounter sandbagging, where reps hold off on selling deals to when they know they’ll earn a higher commission rate.

QuotaPath handles multiple rate, tiered sales commission plans. Sign up for free and benefit from always knowing what your earnings are on every deal in your pipeline.

There’s a running joke in our office that we’re trying to turn our CEO, AJ Bruno, into a #LinkedInfluencer. He continues to remain humble, but his successful career in sales and entrepreneurship has given him the experience and voice that many can learn from and connect with. Not to mention, his childhood thespian days have groomed him to be a phenomenal public speaker and a trustworthy leader you can get behind. (Ask him about the time he dressed up in Shakespearian garb running around Penn’s college campus promoting his first entrepreneurial venture Control The Buzz).

So it came as no surprise that he made #37 on the LinkedIn Sales Stars list of top emerging thought leaders. The list was curated by sales leader Scott Ingram. Ingram founded Sales Success Media, where he hosts the podcasts “Sales Success Stories” and “Daily Sales Tips.” He also authored the book “Sales Success Stories: Real Stories from Real Sellers” and puts on the Sales Success Summit.

Ingrim evaluated 185 individuals and pulled a list of the top 100 emerging thought leaders in the sales space. His measurement approach was simple and did not favor the number of followers or connections, rather it focused on engagement (comments, likes, shares). How well is a person connecting with their audience? Is their message resonating with the community?

So how do you measure LinkedIn success? Ingram followed a straightforward model with publicly available data:

• Add up all the likes and comments on a person’s last 10 LinkedIn posts (not including shared content or posts that were published in the last couple of hours)
• Divide by the total number of followers
• Convert that number to a percentage

In AJ’s case, he had 1,040 likes and comments divided by 5,966 followers, giving him a 17.4% engagement rate.

LinkedIn has proven to be a powerful marketing tool and platform for the world’s top leaders and innovators. It has 690 million users across 200 countries and is the top social platform for B2B lead generation. But becoming an influential voice is not as easy as creating a profile and sharing interesting articles. To do so, you have to build trust and credibility, create content that speaks to your audience, and invest time in connecting with your network, all things that AJ does very well. AJ’s authentic voice, engaging storytelling for both personal and professional topics, and relatable experiences are what makes connecting with him so easy.

#linkedinsalesstars #sales #linkedinfluencer

At QuotaPath we’re always educating salespeople and sales leaders about different sales commission structures and when to use them. This is the beginning of a series describing the different types of sales commission plans. We’ll cover examples of different comp plan components and the pros/cons of each. Let’s start with a simple single rate sales commission.

What you need to know about single rate sales commission

The definition of “commission” is a percentage of a currency number that is paid to a salesperson. Exactly when sales commission payments are made varies by organization. Generally, salespeople earn commissions on a revenue number once a contract is signed. The number can be based on contract value, annual recurring revenue, or monthly recurring revenue.

We call the most basic form of sales commission “Single Rate Commissions”. Sometimes they are also called Flat Rate Commissions, Fixed Rate Commissions, or even just Commissions. All these terms mean you earn a set, single percentage off the deals you close.

Examples of single rate sales commission plans

An Account Executive has a monthly quota of $33,000 and earns a 10% commission of every deal they close. That commission rate is derived from the quota and On-Target Earnings (OTE).

A Sales Development Representative has a quarterly quota of $250,000 of qualified revenue and earns a 2% commission of every deal they set that hits the Qualified stage.

A Sales Manager has a monthly team quota of $300,000 and earns 3.33% commission of every deal someone on their team closes.

Pros of single rate sales commission plans

Simple to calculate. If your commission rate is a nice round number (say, 10%), it’s easy to calculate in your head. If it’s slightly more complex (6.275%) it’s still simple, but you might reach for a calculator.

Easy to understand. Salespeople will know how much they earn when they close deals. Because it’s such a simple calculation, there will never be a question between your reps and your operations team as to how much has been earned.

Cons of single rate sales commission plans

Fails to reward overperformance. Because the reps are paid the same percentage if they hit 30% of quota or 300% of quota it doesn’t incentivize overperformance like other structures might.

It doesn’t punish underperformance. Similarly, because underperforming reps know they earn the same commission rate even if they fall well short of their quota. The incentives to get into a higher sales commission rate are lacking.

QuotaPath handles 90% of comp plans, so whether your company has a single rate sales commission plan or something else, we’ve got you covered. Beyond the known benefits of sales commission tracking software, QuotaPath is free and easy to try out for your team.