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.

Let’s talk about burnout.

Everyone experiences it, but sales is probably one of the departments that actually talks about burnout the least. I get it. We all want to be the person who is always high energy, who never loses a deal, who never lets life outside of work affect their work (and vice versa).

All that said, and despite what we see on social media, burnout is real. It happened to me last week, and it will happen to you.

How you process that feeling is critical to your immediate well-being and your future success.

With everything going on in the world right now, life has felt a little (okay a lot) like groundhog day. Wake up. Team Standup. Meetings. Coaching. Repeat. Sometimes it’s tough to even remember what day it is.

It started out as what I thought was a case of the mid-month doldrums. I was low energy, I wasn’t doing things to keep my mind sharp (eating right, exercising, etc.), and I had a negative outlook on things both at work and in my personal life. For those of you who don’t know me, these behaviors are pretty much the exact opposite of how I am 95% of the time.

The light bulb moment happened for me after a mid-morning meeting where I wasn’t present at all. That feeling of, “this isn’t me” hit, and I just wanted to crawl out of my skin. Everything felt acidic. I had to do something to get myself back on track.

I realized there are 3 things I did that really helped me hit the reset button, and I hope they can help you too.

1. Know your signs of burnout

Are you not as engaged as you normally are? Letting little things slip through the cracks? Are you working too much each day? Not enough? Are you short with your co-workers? Your friends? Your significant other? Is your inner voice kind?

Again, I get it. These are difficult, uncomfortable questions to ask yourself when you look in the mirror, but it’s critical that you be honest with yourself when answering these questions. Even more critical: don’t beat yourself up for feeling like this. It only perpetuates the cycle so if you find yourself in a hole, stop digging.

2. Be communicative

This is definitely the hardest part of getting over burnout, but it’s also the most important. Let somebody in your life know that you’re feeling burnt out, tired, not like yourself. Thankfully, I’ve got an awesome leadership team, so I dropped my boss a message that read, “Hey dude, got a minute? Headline is I’m feeling super burnt out today.”

He and I spoke on the phone, talked about why I’m feeling this way, and came up with an action plan: take a half-day.

*GASPS*

But Jacob! People are getting laid off like crazy right now. My pipeline is moving at a snail’s pace. I have to put my nose to the grindstone and not make a sound unless it’s to ring the gong.

These were all reactions I had, and likely reactions you’ve had too, but ask yourself, “Is the world going to end because I take 3 hours for myself? Am I going to come back tomorrow with my head screwed on straight?”

For me, the answer was to take a couple of hours to hit the reset button. This brings me to step 3.

3. Cultivate healthy outlets (more than one)

Since everyone’s on some version of lockdown, it’s a little spooky to have all this time on our hands. Now, I’m not trying to sound like a Masterclass ad, but lockdown presents a unique opportunity to try new outlets and discover a new hobby or take on a project.

Whatever your outlets are, make sure they’re healthy, and make sure you’re doing them with the right mindset. You ordered a painting kit, you’re not going to be Picasso right out of the gate. Did you download that music production software? Chances are you’re not going to be playing Tomorrowland anytime soon (if you do, plz send tickets).

Stop judging yourself, and use this as an opportunity to expose yourself to new things!

For me, it’s exercise and DIY stuff around the house. Whatever your outlets are, make sure you have more than one so you can rotate them. Who knows, you may just find your next “thing.”

TL;DR

Burnout is real, and it will happen to you multiple times in your career. Don’t let it fester in the corners of your mind. Deal with it head-on, be vocal about it, and find some outlets to help you hit the reset button.

Compensation plans are a huge part of your team’s motivation and what drives your business results. We spend hours analyzing and perfecting rules for bonuses and commissions that reward sales teams for behavior that makes both them and your company successful.

And then COVID-19 happened…

The rules on which our previous compensation plans were based are no longer valid. The market has changed drastically and we need to change with it. Below, we outline the types of changes you might consider and how you can model and analyze those in QuotaPath.

What updates should I consider?

Earlier this month our Head of Growth, Graham Collins, outlined changes you may want to consider as you create a new sales compensation plan in response to COVID-19. These include:

• Lowering quotas
• Removing decelerated commission and commission cliffs
• Adding additional incentives, bonuses, or spiffs
• Compensating on something other than revenue
• Removing performance improvement plans

Check out the full post for more information on each of these.

How should I forecast revenue?

Now that you have a few variables to adjust in your compensation plan, let’s talk about revenue forecasting. There are still so many unknowns in this equation, but what we do know is that your revenue forecast should not be the same as it was before. There are categories such as travel that have been negatively impacted and others like software optimizing for remote teams that have shown positive growth.

Start simple – We’d recommend creating a new field in your CRM at the Account or Opportunity level that represents a level of risk – Low, Medium, and High. This will allow easy grouping and reporting on specific deals in each of these categories.

Adjust revenue – Next, consider creating a field that produces a new revenue number based on these risk-levels. Something as simple as 50% of revenue for High Risk opportunities and 80% of revenue for Medium Risk opportunities is a good place to start. If you want to get more sophisticated, add weighted probabilities for each risk category and/or the industry of each account. Whatever your approach, the end result should be an additional field that represents an adjusted revenue amount for each deal.

Finally, let’s model your new comp plans with adjusted revenue

Brandon Smith, our Customer Activation and Engagement Manager, outlines exactly how to do this using QuotaPath’s free functionality.

Our goal is to provide you with some guidance so we can navigate these uncharted waters together. Everything described in the post–comp plan modeling and revenue forecasting–is completely accessible to you in our free app. Furthermore, we’d be happy to help you build your plans in QuotaPath – no catch, no strings attached.

Creativity is born out of constraint

We had planned ambitious marketing and growth goals for QuotaPath in 2020. Less than three months in the world changed as a result of the global COVID-19 pandemic.

In the product, we’ve seen a drop in usage as furloughs and layoffs happened. Sales teams are throwing quotas out the window. And budgets are tightening. Our site traffic has taken a hit and sign-ups have slowed.

For the marketing team, it felt like the outside world halted for a few weeks in a state of shock, but our product and engineering teams were continuously working hard on awesome new features. And, it’d be a shame if sales teams didn’t get the chance to learn about what QuotaPath can do for them. So, in a world where marketing can feel like you’re walking on thin ice, what do you do?

With this new set of constraints ranging from the physical felt while working from home — to the financial of scaling back budgets — a creative idea was born.

After hearing that sales reps are missing those interpersonal interactions in the office, the light bulb moment happened. We could build a virtual way to encourage, motivate, recognize and celebrate success in a very familiar-feeling way, with a tool called Virtual High Fives.

Creating community is in our brand DNA

You might be asking yourself, virtual high fives, what does this have to do with commission tracking software? Well, at QuotaPath we aren’t just building a SaaS sales tool, our vision is to build a community of high-performing sales reps and teams.

Working remotely is changing sales team dynamics, distributed sales teams are looking for new ways to stay connected, and it’s important to find new ways to celebrate wins together. Plus, can’t we all use a little fun and delight, in any form these days?

With budget limitations, an exercise in brand awareness and affinity felt like the right opportunity to explore.

Fail fast, fail often and recover quickly

In the past year, we’ve bounced several ideas for microsites around. But with everything else we juggle as a marketing team of three, we hadn’t prioritized our time or resources for a project that wasn’t core to QuotaPath. Being home, and needing a creative outlet presented us with a new opportunity to play and test a different idea.

How everything quickly fell apart

After a very successful launch at the end of March with our refreshed website, we turned to our backlog to determine what to tackle in Q2. There was one concept we’ve been tossing around for a year. It felt like it was a good project with brand and lead gen benefits, but probably wouldn’t drive immediate results. After doing some research and writing a brief, we ditched the idea within 24 hours of kicking it off. With all the events that are happening daily, we wondered if there was a way to make a more immediate impact.

How it came together as virtual high fives

We kept coming back to the idea that people are wanting ways to feel connected. High fives connect people. We had the visual assets from our brand library to work with– they are an important element for us since they represent the community, connection, success, and celebration. So we thought, maybe build a way to send virtual high fives?

Digging in a little deeper, it turns out that searches for “virtual high five” increased an estimated 580% in March 2020 according to Google Keyword Planner. We were on to something and went all in.

The project was completed, start to finish within a week as a tag-team effort done in the evening and on weekends. It was important not to divert resources away from a big month of product development, but this project needed involvement from every team — marketing, product, growth, and engineering, plus calling in a favor from a good friend.

We didn’t have a specific launch day in mind until we discovered the next day, Thursday, April 16th, was National High Five day. Coincidental, but completely perfect.

We kept the project and team lean so we could maximize the impact and surprise the rest of the company. Our second birthday was the week prior, so it felt like a belated present since we weren’t able to celebrate together.

Roll out started with love notes over Slack praising and thanking each team member for their unique contributions to QuotaPath’s product and culture. The official launch happened on LinkedIn and on Product Hunt, where it was featured as Top 10 of the day!

A win for our brand

Within the first 72 hours, we had seen incredible engagement. Less than a week after launch, and since writing this, we’ve had:

• 82,347+ high fives (and counting)
• 900+ unique names generated
• 1,100+ shares
• 98+ countries reached
• 10% increase in referral traffic to QuotaPath.com
• 300% increase in traffic to QuotaPath.com the day after launch

Overall, this was a successful endeavor for us, that didn’t take too much valuable time or resources away from the team. By creating this microsite and running this experiment we were able to:

• Create an asset that will foster brand affinity with our audience
• Proved a new way to drive traffic organically
• Gave our team a creative outlet to play with
• Spread a little joy around the world

Virtual high fives all around!

The highest-paid sales reps aren’t always the most successful.

Top performers have a firm understanding of comp plans and take savvy, smart steps to maximize returns. Call them comp plan hackers. They keep running totals of their commissions. They get creative when close to hitting quotas, and constantly refocus efforts to earn the highest commissions.

Comp plan hackers are not sandbagging deals (AKA holding them until the next quota period). They’re also not convincing their wealthy uncle to sign phony contracts that push them over their quotas. They simply operate within the rules of the game — and do it really well.

Remember, sales managers and high-level executives create comp plans intentionally. They want reps to make money, get into accelerators, and achieve bonuses. Why? Because ultimately, it means more revenue for the company.

Ready to release your inner sales nerd and learn how to hack your comp plan? All it takes is an analytical mindset and some simple tips:

Keep track of how much you’re making

Sound obvious? Not so much. Many comp plans are so complex that tracking is tough. If you don’t know how much you’re making, you’re not able to maximize your pay. You can track your commissions on a spreadsheet, but that’s subject to data-entry errors, and forces you to learn the complexities of spreadsheet equations. Instead, use a system like QuotaPath, which calculates commission and tracks quota attainment in real-time. It makes it easy to forecast your pipeline of deals and monitor potential earnings.

Work your specific comp plan

A smart rep knows how to get paid more for completing certain actions. For example, a salesperson in a bookings-based plan sees that a one-year, $15,000 deal yields less commission than a two-year, $10,000 per year deal. Sometimes it pays to discount! This way the client pays a lower per-year price, the company guarantees revenue for 2 years, and the rep gets more commission. Everyone wins.

Close to your quota? Give a sweetheart deal to a deserving prospect

Let’s say you’re $3,000 short of your quota. You’ve talked with a nonprofit recently that really needs your services but will never have the budget for it. Now’s the time to convince your sales manager that a steep discount is worth it in the long run.

Reverse engineer your comp plan

Different types of deals are typically paid out at different rates. Commissions can range widely depending on product type, industry, geographic location, or length of the contract. Learn those differences. Maximize your efforts and earn the highest payouts possible.

Be careful, though. Deals with higher payouts will likely be tougher to close and might not be as valuable in the long run. Remember, 5% commission on a $50,000 deal is more than a 10% commission on a $20,000 deal. And likewise, bigger doesn’t always mean better. A 10% commission on a $15,000 deal is more than a 5% commission on a $25,000 deal.

Plan ahead

Understanding where you stand against your quota will help you maximize commissions. If you’re going to demolish your quota, there’s no sense in offering discounts just to get more deals closed before the quarter closes. Instead, plan for the next quarter by meticulously working through buying processes and procurement to maximize the value of each new deal. If it closes quickly, great! You’ve boosted the potential revenue for the company. If it takes a little longer, you’ll have a strong deal to begin the next quota period.

Work the caps and cliffs

Capped commissions mean you can’t earn any more money once you hit a certain amount of sales. If you’re close to a cap, find a way to make money from the deal in other ways. Can you cross-sell the deal into a different product area? Can you make it a two-year deal because you’re not capped on longer deals? Can you switch gears to focus on product types you’re not capped on? Get creative.

Cliffs mean that you can only earn commissions after you reach a certain level of sales. For example, you don’t earn commissions until you reach 50% of your quota. There’s no magic trick here. Just be aware of cliffs and work your tail off until you reach the threshold.

Get yourself into the role that pays the highest comp rates

In some organizations, two people closing the same deals earn wildly different commission rates. For example, a junior sales account executive may earn 10% while a senior executive earns 20%. Work hard to get into a role where your earning potential is highest.

Ready to get the most out of your comp plan? Try QuotaPath. It calculates and automates commissions so you know exactly how much money you’re making and can forecast future earnings. The easy-to-read dashboards and metrics keep you motivated to hit sales goals. Ready to check us out? It’s free to sign up, so start tracking your commissions today!

The first 90 days of a sales rep’s tenure at a new company are likely the most important 90 days of their career at that company. Not only does it set the tone for their work ethic and effort level, but it’s also when they are building their funnel for the first time. Don’t wait until the end of the first 90 days to check and see how they’re faring; instead, use these 30-day milestones to evaluate their sales performance and how they are ramping.

30-days

The first 30-days of sales performance should be measured by two points — are they retaining the information from their sales training, and are they doing the basics. This is an observational period where you’ll want to see if they’re showing up on time, paying attention during meetings, retaining the sales training materials, asking thoughtful questions, and starting to build their sales funnel.

Asking thoughtful questions and following up after meetings is a good sign they are learning and eager to succeed. Be wary if they are asking too many questions that are covered in your training or repeating questions you’ve already answered, it might be a red flag that they aren’t engaged or adjusting well.

For more quantitative sales performance data, measure with more structured quizzes and tests on the sales training materials. Or, if you have a shorter sales cycle, they might already be interacting with and building the top of their funnel by making cold calls and sending cold emails. Set those benchmarks based on your top performers’ ramp up.

60-days

Within 60-days your new sales rep will be settling in, and sales performance should be trending upward. If your business is SaaS, they should be actively utilizing their training, call scripts, and cold email templates to build their sales pipeline.

The focus has now shifted from top of funnel to mid-funnel activities. They might be scheduling and hosting their own sales demos now. If they are, sitting in on the demos is a great opportunity to see how they are applying their new skills. You also want to ensure that they haven’t forgotten about the top of funnel activities. Top sales reps should be able to balance progressing existing opportunities with generating new ones.

Having face-time, and giving timely, actionable feedback in the moment is invaluable. Don’t wait for the end of the month, or the end of the onboarding process to give them that feedback. Have regular 1-1 meetings and check-ins throughout the months.

90-days

Hopefully, by now, your sales rep is in the swing of things, building their pipeline, managing their funnel, and integrating with the team.

If you have set a 90-day quota, they should be working on hitting that, but if not their pipeline should have deals in later stages by the 90-day mark. They should also have healthy pipeline coverage, at least 1-3x their quota. And the funnel should have a widespread, covering all stages of opportunity.

If your newly hired sales reps are following all the guidelines at each of these milestones, they’re on the way to becoming successful at your company! Don’t forget that even tenured sales reps need help and coaching. It’s an ongoing process to improve your reps, so don’t skip trainings, 1 on 1s, and call reviews.

We write a lot about hiring and training sales reps, everything from what interview questions to ask and recognizing top candidates, to incentivizing performance and even how to appropriately fire a sales rep if it isn’t working out. No matter what stage your sales team is at, QuotaPath can help you do sales quota management. Sign up for free today.

“Our people are our most important asset.”

I hear that a lot. Company leaders talk tirelessly about the importance of attracting and retaining top talent. They tout efforts to create a happy, productive workforce that rewards high performers for jobs well done.

Many leaders do a great job. But far too often, the best people quit. This is especially true in sales, where 35% turnover rates dwarf the overall average turnover of 13%. While it’s partially due to a sink-or-swim landscape, many sales managers are actively driving away their best reps with unfair rules, non-transparent policies, ever-changing comp plans, and mindless busywork.

Here are the top reasons your best-sellers are quitting:

They don’t understand their comp plan

A sales comp plan needs to be straightforward and easy to follow. When salespeople truly understand how much money they can earn, they’re more likely to be motivated to smash quotas and strive for valuable bonuses. It’s hardly a new idea. Economists have been arguing for simpler sales comp plans since the 1980s.

They spend too much time on non-selling activities

Salespeople don’t make companies money by attending meetings, updating spreadsheets, or filling out documents. They make money closing deals. Just one hour per day spent on non-selling activities cuts earning potential by 12.5% (based on a 40-hour work week). But many organizations exceed that stat. Gartner reports that number is closer to 16.4%.

Their comp plan changes frequently

Does it seem like your comp structures change a few times per year? That can happen for a number of reasons. Perhaps you hired a new sales director. Perhaps you changed the high-level goals of the organization. Whatever the reason, sudden changes to comp plans feel surprising and unfair. They could be the catalyst for a strong salesperson to leave your company for good. It’s fine to change your comp plan, but make sure it’s absolutely necessary before going through the headache of a change.

They don’t receive their comp plans until March

When sales reps are forced to wait weeks — even months — for sales comp plans, they can feel forgotten and insignificant in the eyes of upper management. Plus, they won’t know which metrics to shoot for. That’s a serious demotivator.

They’re underpaid

Nobody comes to work because it’s fun. They come to work to make money. If sales compensation is insufficient, don’t expect reps to go the extra mile to close deals. Do some research with Glassdoor or PayScale and make sure you’re aligned with your area.

They don’t have a solid, clearly laid out career path

People want to learn and progress. In fact, 82% of employees say a lack of career progression would lead them to quit their jobs. It’s critical to provide training and growth potential. High-performing sales organizations already do this, and they’re twice as likely to provide ongoing training as low-performing ones.

They have the rules changed on them mid-game

Salespeople want to be rewarded for demolishing sales quotas. If you are reducing commissions or increasing quotas simply because your team is overachieving, it can feel like they’re being penalized for doing a good job.

Their quota is unrealistic

Top sales reps will catch on pretty quickly if there’s no legitimate chance at reaching quotas — then leave your organization as fast as possible.

Their commissions are capped

Payment caps can be deadly to a sales team. They remove any incentive for sales reps to continue selling after reaching quota. Uncapping earnings keeps reps motivated throughout the entire month or quarter, and ultimately leads to increases in sales.

They see poor performers sticking around

Keeping reps on staff who can’t produce decreases competition and sends a message to the team that it’s okay to be mediocre.

In fact, 78% of high-performing sales organizations will terminate a poor performer within a year, compared to 52% of underperforming sales organizations. Companies want high performers who challenge one another so everyone performs at high levels. Top companies hire slow and fire fast.

Their commission payments are late or delayed

Salespeople want a square deal. When payments are late or delayed, it feels unfair. It also hurts their ability to financially plan — and can lead them to run for the door.

Their travel arrangements are restricted

Sales reps work nights, weekends, and travel often. In fact, 83% wish they could spend more time with family and friends and 51% say loved ones tell them they work too much. So when they’re on the road, treat them right. They don’t need lobster dinners and fancy hotel rooms, but skimping on travel could make them grow weary of management.

They’re being micromanaged

It’s often said that people don’t quit jobs; they quit bosses. If a manager is constantly looking over a sales rep’s shoulder, the rep is not going to be very happy. In fact, 68% of people who’ve been micromanaged say it decreases morale, and 55% say it hurts productivity. Instead, empower your salespeople to make key decisions and think entrepreneurially.

When salespeople understand their comp plans, they’re more likely to stay motivated, crush goals, and feel supported by management. QuotaPath helps them calculate and automate commissions in a quick, easy way organization and like their on the right career trajectory. If you haven’t checked us out, it’s free to sign up and start tracking your commissions today.

Working remotely changes the dynamic of a sales team in so many different ways. Communication can no longer happen in person so tools in your tech stack like Zoom and Slack have become not just convenient but crucial for operations. Data in Salesforce or HubSpot must be accurate and updated in real-time to ensure prospect and customer communication isn’t negatively impacted.

The sales commission and bonus process is not immune to this either and is arguably the single biggest factor for making or breaking a distributed sales team. Between communication and data, there’s a greater chance for human error or results getting lost in translation.

Now more than ever, empowering your team to understand how they are getting paid is crucial for establishing trust between reps and leadership. As a manager, this should be your primary tool for motivation and driving good behavior. This is challenging even for teams working in the same building, so being remote-only amplifies this. So, how do we connect the dots between money in the rep’s pocket and business value so that we can have a connected, motivated, aligned team in this new remote world?

Single source of truth for sales commissions

As we’ve all seen over the last few weeks, working remotely adds an extra layer of disconnect when it comes to communication. For something as important as paychecks, you simply can’t afford to have a difference between expectations and reality. Creating a single source of truth for how and why your reps are getting paid is crucial. I’ve talked to hundreds of reps who track their commissions in one spreadsheet while their finance and ops team tracks it in another. When these two numbers don’t line up, it’s demotivating and creates animosity between sales and finance. This is completely avoidable if you’ve established a single source of truth which both sales and finance trusts.

QuotaPath is your source of truth for all parts of the business. We give your reps real-time insights into their earnings while giving finance and operations the administrative control and reporting they need to ensure accurate and effective compensation. We connect seamlessly to Salesforce so there’s no duplication of records and data.

Understand your path to success

Most reps do not understand how they get paid. It’s a simple and sad truth. It’s also a massive opportunity for organizations who can bridge this gap. Empowering reps to understand what they’ve earned and what they could earn in a given period gives a line of sight to their personal success. Self-motivating without the collective energy of a sales team around you is difficult. Being able to visualize the finish line and understand how your daily activity connects to your paycheck is a game-changer.

QuotaPath’s Earnings Dashboard gives your reps a detailed breakdown of how and why they are earning commissions. Reps and managers can easily forecast in real-time to see exactly what deals get them to the finish line for individual quotas or team goals. Jacquie Bigot, Account Executive and QuotaPath power user, uses the product to align personal and company goals.

“QuotaPath has been critical to help figure out how I’m tracking against not just my own personal goals and quota attainment, but also understanding how I’m contributing and bringing success to the organization.” –Jacquie B.

Deliver results and celebrate together

High fives are sadly no longer possible these days, so how do we make sure we’re celebrating success together? Sales commissions are too often ‘reported’ to reps after the period is over. This usually takes the form of a spreadsheet or even worse, a screenshot of a row in a spreadsheet sent from finance or ops. This process completely takes away the ‘winning’ aspect of getting paid your commission, especially in a remote environment. Sales leaders should know exactly when their reps are winning and celebrate together. If it makes sense, get virtual assistants for them to ease their work and accomplish more tasks.

Use the platform to easily set personal or business goals, track them in real-time, and virtually high-five each other when you complete them. In addition to goal setting, here are a few more ceremonies we’ve rolled out to make sure we maintain a celebratory and connected atmosphere:

• A dedicated #shoutouts channel on Slack: Is one of your colleagues doing an incredible job? Throw it on #shoutouts.
• End of week check-in highlighting WoWs or ‘Wins of the Week’: Give your managers, leaders, or the whole team a chance to talk about the wins that are happening around them.
• Byte & Bites: Bring your entire company together (virtually) to share a meal and learn something about a topic they don’t usually get a chance to be a part of.

QuotaPath’s mission is centered around creating a single source of truth, aligning teams, and motivating reps. We can supercharge your sales commission process and ensure that a distributed team does not create a disconnected culture. It’s free and easy to try out for your team.

It’s no secret that cash is king, especially when trying to motivate sales reps to close more business or SDRs to set more meetings. But after a while, cash loses its excitement and sales reps can get bored. In my experience, it’s good to switch it up every once in awhile, so here are some of the non-cash incentives that have worked for me in the past.

Lunch with execs

For an up and coming sales rep (especially one with management potential), face time with an exec can progress their career AND increase alignment. This also helps the VP of Sales or CEO get a better understanding of what’s going on at the ground level. When I was early in my career in sales at a Fortune 500 company, I was selected to sit at a table with the CEO during our annual sales kick-off and it’s left an impression on me to this day.

Conference tickets

There are some amazing sales conferences like TOPO Summit, AA-ISP, and Tenbound. Getting to travel for a conference, network with amazing sales leaders and learn new best practices is another win-win for your rep and the company. Send your top 3 reps to a conference and give them a budget for a couple of nice dinners, book a nice hotel for them, or fly them out, first class. When they get back, have them present their learnings to the team.

Days off

In a high-stress environment like sales, oftentimes salespeople forget to take time off or they have limited PTO. Offering a long weekend, a random day off, or even a half-day can go a long way. About once per month, I’d tell my SDRs that if they set three meetings by noon on Friday they could leave early. Oftentimes that was the most productive day of the week! Just make sure it’s not announced beforehand or you risk sandbagging.

Gift cards

This one is kind of cheating because (at least for me and a lot of other millennials) Amazon gift cards are as good as cash. I’d recommend giving gift cards for a place that the reps might not normally splurge on for themselves like a fancy restaurant or a local luxury hotel.

Concert tickets

Being in Austin, we have a lot of concert options… but trying to buy tickets that would appeal to everyone isn’t an easy task (unless Beyonce happens to be coming to your town). I once ran a monthlong competition for VIP tickets to the big music festival in Austin (Austin City Limits), and because there were dozens of musicians there was something for everyone. It turned out to be one of my most popular contests.

Quota relief

This one is controversial because it can hurt your overall sales, but during a couple of slow months I told my reps that for every 2 dollars they sold over their quota, their quota was reduced by that month the following month. We turned what could have been a slow month into a great month. Here’s the best part, because they were trying so hard to build pipeline, they ended up overperforming the following month too!

I always love hearing exciting new competitions and sales incentives, so if you have any that I should use in the future, shoot me an email at graham@quotapath.com