Congratulations on choosing to explore the opportunities of a career in sales, how exciting! A sales career will offer you constant, unique challenges and put you in charge of your own success. Plus, the sales department is typically one of the highest paid departments in a company.

Whether you’re just starting to think about a career in sales, or you’re eyeing that open Sales Manager position, we’re here to help you understand the lay of the land. Here’s a glimpse into our free guide to help you navigate various paths, set career goals, and build the career you want.

Choose the right role

Let’s take a look at a few of the most common sales roles, what’s involved in each one and what kind of skills are needed to succeed.

We’ll start with a sales development representative (sometimes called a market, business or lead development representative or a lead generation specialist). These reps are in charge of researching, finding and reaching out to new prospects and qualifying them for other sales reps. It’s not uncommon to include quite a bit of cold calling, so someone who is personable and organized is likely to succeed in this role.

An inside sales role is a great place to start for those transitioning from an SDR role to a sales job. There’s plenty of opportunity to grow by working closely and learning from sales managers and more seasoned reps. Inside sales reps work in an office and sell remotely, so you should have strong technical skills, rounded product knowledge, and feel comfortable using customer management (CRM) software.

The counterpart to an inside sales rep is the outside sales rep or, field sales rep. Out in the “field,” these reps focus on building relationships face-to-face. Someone who thrives on personal interaction, uncertain situations, and can self-manage and organize will be successful in this role.

Last but not least, there’s the sales manager. As the title suggests, they’re in charge of managing the performance and day-to-day activities of sales professionals, including SDRs and sales reps. To be a sales manager, it’s best to have a few years of experience under your belt. You’ll need to have strong communication and analytical skills since it’s important to evaluate your team’s performance and identify what they need to be successful. Their success will be yours as well.

Once you made your choice it’s time for you to find that perfect job. Luckily employment sites like Jooble offer a variety of opportunities in any field.

Understand your compensation

If you didn’t already know, here at QuotaPath, we’re self-identified sales nerds. We live and breathe sales compensation plans. Here are a few key components we believe make a good compensation plan:

1. Simple enough it can fit on the back of a napkin, which means no more than 3 variable components.
2. Set realistic goals that are ambitious yet achievable. (Sales reps thrive off challenge and competition after all.)
3. Correct ratio of quota to on-target earnings (OTE). If you’re just starting your career generally somewhere in the 20-25% range is ideal.

Beware, there are terrible plans out there. A few red flags to look out for when reviewing compensation plans are any moving targets, a high clawback rate, and 100% commission jobs (unless you’re working in real estate or auto sales).

The good news here? QuotaPath is equipped to manage all kinds of plans — from the good ones to the not-so-good ones. It’s free to use too, so sign up to start calculating your earnings today.

Map your career goals

The beginning of your career is all about trying different things and discovering what you like, and equally important, what you dislike. To map your career goals, ask yourself questions like:

• What aspects of your current job do you find most satisfying?
• What skills do you have that aren’t being put to use in your current role?
• What would be your ideal job situation in one year?

Answer those questions, then make a plan on how to make changes that will make you happier and potentially more successful as a result.

You might imagine you’ll feel more confident and secure after a few years, but that’s not always the case. People with ten, twenty or even fifty years of work can be just as unsure of the next steps as they were at the beginning of their careers. Check-in with yourself regularly about the state of your career to avoid getting stuck in a rut. Your goals will shift over time, since life goes on and priorities are constantly changing and evolving.

Did you find this information helpful? It’s all inspired by our guide, How to Build the Sales Career You Want. Download the free guide to get even more great content.

For those who work in sales, one of the most important aspects of your job is your commissions. We’ve learned in a previous post that there are various types of commissions such as flat-rate or fixed. Because commissions are likely a part of many sales folk’s total compensations, it’s important to understand them and how they work.

Most sales reps have their own way of tracking their commissions to ensure that they are getting paid what they worked for–there’s nothing more frustrating than getting shortchanged on a paycheck because you didn’t understand your commissions. Today we look at three of the most common ways that salespeople track their commissions and when to use which method.

Best way to track commissions

What’s the best way to track commissions? That depends. Some people prefer calculating commissions manually (like on a Post-it or in your head). But that only works for specific cases. The best time to calculate a sales commission manually is when it is a super simple commission plan and very few deals. For example, if you have a commission plan that earns you a 10% commission on every sale, you can probably do some quick mental math.

While tracking commissions manually is great for simple compensation plans, it can get confusing when you start adding variables like accelerators or dozens of deals. It can become time-consuming and it’s also easy to make mistakes. Tracking sales commissions manually may be right for you if you are an individual with very simple compensation plans and very few deals.

Pros:

• No tools needed
• Super quick for simple compensation plans

Cons:

• Works poorly for more complex compensation plans
• Easy to make mistakes
• Time-consuming
• No long term record of deals and payouts
• Doesn’t scale with team

Are Excel or spreadsheets the best way to keep track of sales?

Another way and the most common way of tracking commissions is through a sales commission tracking spreadsheet like Excel or Google Sheets. This works great when compensation plans get more complex and you can’t do the mental math as quickly. We find it best for slightly complex plans with many deals. Although most reps enjoy the flexibility of Excel, they are also well aware of its shortcomings. It can get frustrating tracking down a mistake you make in the logic when creating a tracking sheet. Not only is it mistake-prone, but it is also time-consuming. Not to mention, that it is difficult to scale to larger organizations and collaborate with team members. If you are a rep in a small team with compensation plans that are not very complex, sales commission tracking spreadsheets like Excel might be right for you.

Pros:

• Flexible
• Works well for very small teams
• Can handle more deals

Cons:

• Works poorly for more complex compensation plans
• Easy to make mistakes
• Time consuming
• Doesn’t scale with team
• Still manually entering deals

Should I track my sales commissions using QuotaPath?

And of course, there is QuotaPath! We provide a modern, automated solution that takes the burden of manual spreadsheets and mental math out of the equation. Personalized earnings and attainment dashboards make it easy to understand how your deals contribute to personal and company goals, which is a win for both reps and the company. QuotaPath ensures that everyone is aligned on how your commissions are tracked.

QuotaPath is right for you whether you’re an individual rep tracking your individual commissions or you are sales manager trying to motivate your sales teams.

Pros:

• Free for reps to use
• Visual representation of your progress
• Motivates you to achieve your quota and reach your goals
• Great for compensation plans of all complexities
• Scalable across all sales teams
• Easily share plans out and collaborate with team

Cons:

• Might not be useful for people with really simple commission plans

Commission report template

If you’re not ready to fully automate with QuotaPath, you can also download our free commission report template and sales commission calculator. This tool acts as a framework for how to track commissions. Input your compensation plan component, such as base salary, commission rate, quota, and on-target earnings (OTE). Then input your deals under the “Deals” tab and view your total sales and commissions under the “Monthly Totals” tab to track attainment and monthly commissions.

While those four methods are the most common when it comes to tracking commissions, we understand that sales folks might use other unique methods or software to help shine a light on their comp. The great thing about QuotaPath is that it’s free to use and only takes a few minutes to get up and running. If you want to see how QuotaPath can help you track your commissions, sign up for free.

FAQ:

Is it possible to monitor commissions within Salesforce?

You can monitor commissions within Salesforce by integrating the CRM with a sales compensation management solution. QuotaPath’s Salesforce commission tracking integration imports deals in real-time from within Salesforce and gives leadership and reps forecasted views into their earnings and attainment based on their Salesforce pipeline.

Read more on this company’s experience integrating Salesforce with QuotaPath and how it led to their most productive sales year to date.

What is a commission pool?

A commission pool is a type of sales compensation plan in which a portion of the company’s revenue is set aside to distribute to sales reps based on their performance. The pool is typically divided into equal shares, and each sales rep receives a commission based on the number of shares they earn.

Commission pools incentivize sales reps to work hard and close deals. By sharing in the company’s success, sales reps are more likely to be motivated to perform at their best.

There are a few different ways to calculate commission pool shares. One common approach is to use a formula that takes into account the sales rep’s individual performance, as well as the performance of the team or company as a whole. For example, a sales rep might earn one share for every $10,000 in sales they generate, and the team might earn an additional share for every $100,000 in sales they generate.

Commission pools can be a valuable tool for sales teams, but they’re not without their drawbacks. One of the biggest challenges with commission pools is that they can be difficult to administer. Companies need to carefully track sales data and ensure that the commission pool is distributed fairly.

What is the process for recording commissions on a balance sheet?

Commissions are not typically recorded on a balance sheet. Instead, they are recorded on an income statement as an expense as a period cost. This is because commissions are a cost of doing business, and they are not considered an asset or liability.

However, there are some cases where commissions may be recorded on a balance sheet. For example, if a company has a large number of unpaid commissions, it may choose to record them as a liability on the balance sheet. This is because the company has a legal obligation to pay the commissions, and it is likely that they will be paid in the near future.

Here are the steps on how to record commissions on an income statement:

Determine the amount of commissions earned. The amount of commissions earned is typically calculated by multiplying the sales amount by the commission rate.
Record the commissions expense. The commissions expense is recorded on the income statement as a selling expense.
Pay the commissions. The commissions are paid to the sales reps when they are earned.

Teams use QuotaPath to recognize commission expenses immediately, batch earnings, amortize them to align with their revenue recognition schedule, and create audit-ready reports.

Who is responsible for calculating sales commissions?

The team or individual responsible for calculating sales commissions will vary by the size or stage of the company. For instance, at smaller companies, sales managers typically calculate sales commissions for their teams. But at larger companies, a dedicated sales operations team will oversee this. However, with the rise in popularity of RevOps, we’ve seen RevOps take the lead on the compensation plan design process and calculating sales commissions.

To say we’re obsessed with Zoe would be an understatement. As QuotaPath’s inaugural intern, she has set a high bar in terms of quality of work, being a cultural influence, and her eagerness and willingness to learn. She also rocks an all monochrome outfit and light pink hair better than most. We got to sit down with her to talk about her experience at QuotaPath and how it’s helped shape her attitude towards the next step in her life and career.

Tell me about your journey to QuotaPath.

I‘m a Game Design and Production student at Drexel and we have a co-op program. The school mandates that we work somewhere for six months in order to get our degree. We’re helped to a certain extent, but placement isn’t guaranteed. After doing my own external searches and by the third round, I decided I was going to use the system because there was still a lot of interviews that I hadn’t gotten answers back on, and I was like, “I should find something quick” as well. I ended up applying to QuotaPath because the job description was super cool and mentioned a lot of mentorship, which sounded amazing. And you encouraged other hobbies outside of work as well. Work-life balance is very important to me, especially after being in classes for a year and a half straight with only a short break of two weeks.

Once I did the interviews, I talked to Darby (in charge of recruiting) and Eric (Technical Co-Founder). I really enjoyed talking to them and they seemed very likable and personable. Eric was also just very open with me. I’m very honest in my interview questions, whether they’re right or not, and he seemed to still appreciate them. He asked me if I knew Python because I did the coding challenge in Python. I just said that I used it in my sophomore year of high school and that I haven’t used it since until this code challenge, but I’ll figure it out. And he was totally down for it, which was pretty awesome.

And so I got the offer call. I was still waiting on another offer, but as soon as I said I was going to wait until Monday, I regretted it, and I was like, “I should’ve just taken it.” And so Monday I called back and I was like, “I’m going to accept it.” And I’m pretty riled that I got the other job offer the day after.

What’s your favorite part about the culture at QuotaPath?

One thing I want to say about the culture to start it off is that I love coming to work. I’ve worked from home on days when I don’t feel well, I’m sick or whatever, and it’s not the same. It’s so much better being around everyone, being able to communicate. It’s fun because I feel like even at work, we have a good life-work balance somehow. We all work really hard, but every once in a while we make jokes and there are little office conversations for like five minutes. And then we’re like, okay heads back down. Like making the alignment chart on the whiteboard about all the coworkers one day, that was really fun.

I enjoy that everyone’s really approachable. Since day one, I was able to ask people questions and no one ever treated me like a stereotypical intern. No one was ever like, “Wow, that’s a dumb question.” Or, “Go get me coffee.” You guys were like, “Hey come with us to this potential new office tour,” the very first week I was here. And I got invited to the company events like Quizzo and all kinds of really fun stuff. I was able to host my house warming party with everyone last weekend, which was really exciting, too. Everyone is very accessible, and sure there’s an age gap, but no one ever makes it awkward or anything. You’re just like, “You’re a coworker.”

Explain your role at QuotaPath. How does your skill set fit onto the engineering team?

In my first interview with Eric when he asked me what my goals were, I said I want to create art through code, which is very true. And our product is very front end driven. We have a whole bunch of front end engineers–the front end engineers definitely outweigh the back end ones right now. And we pay a lot of attention to the details of the visuals over-site, which is something I very much enjoy. We’re very open to changes as long as they make sense, which is also something really awesome. I love being able to go up to Ralph (Head of Design) and be like, “Hey, why aren’t we doing this instead?” And being able to make smaller changes. That’s something that’s really awesome.

I feel like the engineers and designers aren’t just working in boxes. There’s a lot of collaboration between all of us, which I think definitely plays into my background. As a game design major, I went through a lot of user interface design classes and art classes and design in general, so that’s a lot more my background with my computer science minor. Being able to combine those, it’s just something I’ve always wanted no matter where or what I’m doing, and I’ve definitely found that here. I’ve been able to be ambitious as well. I could say, “Hey, I really want to work on the back end and figure this out.” And I was given the opportunity to, which was pretty rare for interns and it’s pretty amazing.

What excites you most about the work QuotaPath is doing?

I think one of the things, especially from talking with Ralph (Head of Design), that excites me is just the accessibility we’re aiming for. We’re really working hard on our user experience and I think that it definitely shows. Even when we’re working on MVP and on certain new features, it’s always the absolute cleanest. I know that down the road we’re trying to be so accessible and usable for everyone that needs it or wants it. And that’s definitely something that’s really, really cool to me because we’re constantly improving. We’re definitely iterating. And that’s something I’ve discovered I love about product engineering–is that this is something we own and we can constantly fix. It’s never done. And that’s something that I really enjoy.

What’s the biggest thing that you’ve learned so far at QuotaPath?

That’s really hard. I have learned so much in my time here. So much. I came in, I didn’t know anything at all about TypeScript or React, which is what our front end is in, and now I work just like everyone else here. I get assigned just as much work, which is pretty wild when you think about it. I’ve obviously learned just coding and technical skills in general, and that has been extremely amazing. Our pull request process here is really amazing. I’ve gotten a lot of good feedback from people and everyone pushes me. No one has just told me, “Oh your work is great,” when it’s not. Everyone’s like, “This is amazing, but here are some flaws as well,” which is very valuable. I appreciate everyone’s honesty in that sense.

I’ve just learned, a lot about myself as well in my time here. It’s definitely helped my self-confidence a lot in order to be part of this team, especially in the beginning. I love having seen certain new standards and traditions grow with the company because I came two weeks after MC (Director of Product) and seeing our product management and workflow process take shape over the past few months has been really amazing. It’s been really cool to see the process of how a startup gets to a big scale company and where some of those traditions come from. That’s been something that’s really cool to me.

Has your experience at QuotaPath helped prepare you for beginning your career?

Yes. So I’m attending college full time technically. I’m taking 12 credits this term, which isn’t a lot thankfully, and I’m working 20 and a half hours a week, which is on the higher of a part-time for sure. It’s been an honor to be able to stay part-time. That was something I asked relatively early on in order to sign a lease for an apartment.

And it’s super cool because not many people at 20 rent their apartment and have only their name on it, which is something I’ve definitely not taken for granted. I think that’s been incredible. It really makes me emotional sometimes to think about it. It definitely has prepared me. When I first came here, I thought I would like it, but wasn’t entirely sure what it entailed. I love this more than I thought I would at the beginning. I really do find a lot of joy in the work I’m doing. Sure, a lot of people might say, “Oh it’s so business and business can be boring,” but I don’t feel that way anymore at all.

I used to say I’d never want to work in business at all. I love this. I love having a living, breathing product, seeing the strategy that goes into it and being in a startup environment especially. I definitely would feel prepared if I went somewhere else in the future to have a lot of that insight. It’s really cool being part of a small team.

If you could give advice to others looking to start their career as a software engineer, what would it be?

So obviously you need a certain amount of knowledge in order to get in the door, but I’m actually going to say it’s less about what you know and more about what you can learn. I think being able to learn is a huge part of the job. I asked to do back end work and I asked for a little bit of help in the beginning, which is definitely important, but then I just put my head down and read so much documentation, figured it out as much as I could and then asked for feedback. I really think that’s been a valuable way to learn it.

I think if I had come in knowing a lot and not being able to learn, I might’ve been able to code well, but it wouldn’t have been up to par with what we do. I think adaptability is a huge part of it and having a good attitude about it. Not getting frustrated when you don’t know something and just being like this is a challenge, you to approach everything with like “I will find the solution to this challenge,” not, “I have no idea what to do. This is awful.”

So I would definitely say having a good attitude, being able to learn and being eager to learn are probably the biggest things.

We’re constantly thinking, talking, and writing about compensation plans (how to build one and which is our favorite for example)… In the ghastly spirit of Halloween, I wanted to write about THE SPOOKIEST COMP PLAN EVER! Fortunately for everyone, I’ve never encountered a plan this bad, but you might recognize some components from your own compensation plan in here! So let’s get started with this nightmare sales compensation plan. For the sake of example, we’re going to talk about Vandelay Industries, a (fictional) high-growth SaaS company with 25 sales reps and 10 SDRs.

Spooky thing 1: Too many components

Too many comp plans simply have too many moving parts. I’ve heard the adage that you can write a good comp plan on the back of a napkin/business card countless times and it’s a good place to start. I don’t think that any plan should have more than 3 different components (or Paths as they’re called in QuotaPath). If you’re pushing into 4+ different Paths, it might be time to simplify.

Vandelay Industries’ compensation plan has 8 components! I won’t list all of them here, but here are 4 of them:

1. Earn 10% of any 1-year new business deals until you hit your quota, then 20% of any 1-year new business deals over 100% of your quota.
2. Earn a flat 3% of any upsell deals for the first 6 months after a contract is signed
3. Earn a flat 1% of any renewal deals but only if your retention rate is greater than 75%
4. Earn a $500 bonus if you hit your monthly new business quota but only if you have closed at least 3 new business clients and you have $8k in upsell revenue that month

Spooky thing 2: Capped commission

There are very few times when a capped commission comp plan is acceptable. More often than not it is there as a failsafe to not overpay reps in case the organization didn’t do a good job building compensation plans. A cardinal sin for sales reps is sandbagging (holding back from closing deals this month to earn more money next month) and capped commissions are a major contributor to this behavior.

And of course, because this is a poorly designed comp plan, Vandelay Industries have a capped commission structure. Reps are only eligible to earn 2x their On-Target Earnings any given quarter. Any potential earnings over that are considered excess and aren’t paid out.

Spooky thing 3: Not attainable

There’s some debate about what percentage of a company’s salespeople should hit their quota every month/quarter ranging from 60-90%, but at QuotaPath we believe that around 75% of salespeople should hit their quota any given period. If it’s 100%, your quotas are likely too low, meaning the business is paying out too much in commission or not getting the most out of their reps. If it’s lower than 60%, quotas are probably too high and reps will become unmotivated and eventually leave.

Sales reps for Vandelay Industries have a $40k new business quota per month. On average, reps close $25k per month. Typically 5 of the 25 sales reps hit their quota every month — 20% of reps.

Spooky thing 4: Out of the rep’s control

For every [sales] action, there is an opposite equal [sales] reaction. Okay fine, Newton doesn’t perfectly translate to sales, but my point stands: what a salesperson does should impact their ability to close deals and, thereby, make money. Many organizations, though, tie compensation to things entirely out of control of the rep! Of course, very few things are entirely in the rep’s control — you can’t 100% control whether a contract gets signed — but compensation plans should avoid paying on things entirely out of the rep’s control.

Vandelay Industries has a big marketing presence, which is very helpful for building pipelines. However, there’s a sticky component of their compensation plan that has driven some reps mad: they have to run 10 demos with marketing sourced leads per month or else they’re ineligible for any commission that month. The problem is that some months the marketing team only sources 5 demos per rep. In those months, a lot of reps go without commission.

Spooky thing 5: Doesn’t drive the right behavior

Sales compensation plans can be explained fairly simply: reps do what you pay them to do. If you pay your reps to close 1-year deals, they’ll close 1-year deals. If you pay them to close deals with enterprise clients, guess what? They’re going to target enterprise clients.

Revenue retention is a very important thing for SaaS companies, which is why some opt to pay reps a higher percentage on multi-year deals — they lock in revenue for longer. Not Vandelay Industries, though. As you can see above, they pay reps 10% for 1-year deals. They only pay 4% of revenue on 2-year deals though. So a $10,000 deal for 1 year will pay you more than a $20,000 deal for 2 years — $1,000 vs. $800.

Oh, also the CEO loves companies that start with the letter Q (we get it, so do we!) so Vandelay pays out a $1,000 bonus for any deal closed with a company whose name starts with a Q. In turn, reps spend way too much time on those clients and ignore the other 25 perfectly good letters of the alphabet.

Spooky thing 6: No way to track commission/quota

The final (and if you’re asking me, the spookiest) issue with Vandelay Industries’ compensation plan is that they lack the ability to track their commissions! A few reps have tried to build a spreadsheet to track their earnings and quota attainment, but it’s too complex, it gets out of date quickly, and it is very manual.

That’s where QuotaPath comes in. In under 7 minutes, you can enter in your comp plan variables in QuotaPath’s simple onboarding wizard. Our system handles even the most complex (no matter how spooky they might be!) and we do all the math for you, so no more human error or manual updates. It’s totally easy to set up and completely free to use. And if you’re thinking that your compensation plans might not be driving the results you want, feel free to email me at graham@quotapath.com

Sales Development Reps (SDRs) play a key role in many B2B SaaS companies. They spearhead the efforts of generating leads and moving these leads through the top of the sales pipeline. SDRs also make up a key segment of the QuotaPath user base, so we thought we would learn a little bit more about them. We were excited to see that The Bridge Group did a research study on metrics and compensation for SDRs. Below we synthesized the findings of the report in a TL/DR format to our readers.

Group Structure

The Bridge Group analyzed data that they gathered from 434 companies who have a median annual revenue of $24M. A perennial question about SDRs is whether they report to the Sales or Marketing organization. The study found that in larger companies (over $5M revenue) the reps reported to Sales in 65% of companies and Marketing in 24% of companies. As is expected with startups and smaller companies (under $5M revenue), the reps reported to the CEO 32% of the time. If I can offer a personal opinion, it would be that your SDR team should report to whichever executive cares the most about their success. I’ve seen it successful with both the marketing AND sales… depending entirely on the executive in charge.

Researchers also found that nearly half of companies utilize blended inbound/outbound teams, with only 25% of companies having a dedicated inbound and outbound team. Unsurprisingly, different SDRs organizations are responsible for different degrees of qualified meetings. The study found that there’s a nearly identical split between SDR organizations responsible for setting intro meetings, setting semi-qualified opportunities, and setting fully qualified opportunities.

A fascinating finding by the researchers was that SaaS companies, in general, have begun employing lower SDR to AE ratios, than in the past. Currently, SaaS companies employ an average of 1 SDR for every 2.6 AEs. The researchers gave a few theories as to why this might be, but the rise of technology and automation within sales has resulted in a sharp increase in SDR productivity.

Ramp & Retention

Interestingly, the study found that the average experience required to hire a rep has declined by 45% since 2010. High-growth companies were found to be 30% more likely to hire a rep with less than one year of experience than companies that were not high-growth. This is a great indicator for recent college grads looking to break into sales!

It seems that every SDR is looking to move into a closing role as quickly as possible. It makes sense then that the average tenure of an SDR was 1.5 years. Considering that the average ramp-up period for new hires around 3.2 months, this gives a little over a year of full productivity before SDRs leave this role.

Compensation & Quotas

Now for our favorite part of the article: sales compensation and quotas. At QuotaPath, we believe that transparency of compensation plans for sales reps is extremely important. The average base salary for SDRs is $48k with an On-Target Earnings (OTE) of $75k, meaning on average SDRs are expecting $27k in commission/bonus per year.
Most companies tend to rely on variable compensation revolving around one or two components. The authors pointed out the issue with tying more than 20% of incentive compensation to “opportunities won”. Essentially, it makes little sense for a rep to get paid 100+ days after passing an opportunity, especially when the rep has little control of the win likelihood after passing it on. The “opportunity won” compensation for SDRs might also encourage them to spend more time getting a deal through the finish line, rather than focusing on talking to new prospects.

As we’ve written about in the past, Sales Development Rep quotas vary drastically depending on the company. They can range as low as two highly qualified opportunities a month to as high as 60 introductory demos a month depending on a variety of factors. There are typically four variables to take into consideration for setting quotas: activity focus, model, size of accounts, and market maturity.

As stated in the research article, setting quotas can be difficult. When setting the quota. it’s important to make it attainable so that your SDRs stay motivated and competitive.

Pro-tip: QuotaPath’s Teams feature provides a great way to visually track individual and team goals. Reps can see how they compare to their team members and also stay on track with their personal goals. Based on the research findings, on average, 68% of reps achieve quota in a given group. Teams can help Sales Development Reps who are struggling, stay motivated to reach their quotas.

Activity and Sales Leadership

In general, the Sales Development Reps in the study made 45 dials per day with an average of about 5 quality conversations per day. Companies also spent around $371 per SDR per month on technologies (think Salesforce, Outreach.io, Salesloft, etc.). Want some good news? Anyone can use QuotaPath to track quota attainment and commissions for free. Built by salespeople for salespeople, QuotaPath was built to empower individual reps and provide managers with the tools necessary to allow their reps to succeed. For example, the study shows that some of the top challenges facing those managing SDR groups are issues like productivity/performance, metrics/reporting, motivation, and compensation (optimizing, planning). QuotaPath enables you to tackle each of these issues and provides value not only to managers but to individual reps themselves.

If you’d like to do more digging into the report, check out the full study. To start using QuotaPath to help your team achieve their goals, sign up today for free!

The past year has been a busy one for us here at QuotaPath. We have grown our team to 17 and put in a lot of work to reach our official launch on August 1, 2019.

Our Head of Design, Ralph, just celebrated his one-year anniversary with us. He’s helped build QuotaPath from the ground up, define processes and has been key to our success so far. And he’s an integral part of our culture as our lead (and only) product designer, a collaborator, a fantasy football player, and a room-escaper. He’s also active in the Philadelphia design community and returns to his alma mater, La Salle University, every semester to inspire the next generation of creatives.

Tell me about your journey that led you to becoming Head of Design at QuotaPath.

Well, the first project I ever designed was fan art for one of my favorite bands, Boys Night Out. I used Microsoft Paint to crop out each band member’s photo, change it to black and white, position it. I kind of liked what I put together, sent it to them as fan art, and a couple of weeks later it ended up on the band’s site as their splash page (back when that was a thing). I loved the fact that the work I did could be appreciated by not only the band but also their fans. It was the first time I saw the path to becoming a designer. I started thinking, I could have done that better, or maybe I should’ve tried different arrangements—it led to more iterations, improvements, and I loved the process.

I went to La Salle University to study Computer Science and quickly realized Digital Arts was more aligned with what I wanted to do. I added a minor in Marketing so I could get a sense of what and who I’d be designing for. My advisor Conrad Gleber, former Director of Digital Arts & Multimedia Design at La Salle, emphasized the importance of not only understanding the big picture of a project but also pushed me to add value and go beyond what was being asked of me. That advice has had a major influence on my perspective of the industry and has forced me to constantly challenge myself through design.

I’ve had the opportunity to work for various sized companies, big and small, and contribute to both design and front-end development. I’ve never been one to sit back and pass up an opportunity, so when I heard about the opportunity at QuotaPath everything seemed to align and I was eager to take the next step in my career.

Where do you get your inspiration from?

Music inspires me and gets me in a flow. From the first project I ever did for Boys Night Out, to designing show flyers and promotions for the Draft Horse Pub while I worked security, music seems to be a constant that flows through my experiences as a designer.

I listen to all kinds of music. Everything from RnB, rap, alternative rock, pop-punk, post-hardcore, emo, screamo all the way to today’s hits. If I ever feel like I’ve hit a roadblock with what I’m working on, I’ll switch genres to something completely different until I’m grooving again.

[Aside, Ralph is constantly breaking into song in the office so this was not a surprise.]

What’s the best thing about being a designer?

That moment when you take a thought, idea, or random back-of-the-napkin concept, and present it visually to someone is exciting. Seeing that reaction is fun and it’s always unique.

Solving problems for people is a great feeling. I love being the facilitator of ideas—I can barely organize my closet—so being able to help someone visualize an idea is really rewarding.

What excites you most about the work QuotaPath is doing?

What’s interesting to me is solving a problem and shaping a shared language between companies and sales communities through our product.

It’s interesting to learn about a new industry and a group of people and see repeatable patterns that I’m able to solve for by drawing from my past experiences. There are also new layers that push me, like the team here at QuotaPath, to improve my craft and continue to challenge me. I never want to feel stagnant or like I’m not improving, so new challenges are very important to me.

If you could give advice to anyone who is looking to grow their career, what would it be?

Don’t try to be like someone else. Growing up I spent a lot of time looking at sites and portfolios thinking that’s cool, how do I replicate it. But I know now that everyone’s work and portfolio is very unique to them, it’s their craft and specialty. Focus on where your talents lie, carve out your niche, and travel your own path.

Rapid-fire quick facts:

What’s your favorite tool? Spotify
Your most-used keyboard shortcut? CMD+Z
Number of coffees you consume per day? 2.5
And, describe your design style in 3 words. Clean, Simple, Scalable

In a previous post, I wrote about my experience setting Sales Development Rep (SDR) quotas while I was running an SDR organization. But not all sales quotas are created equal. Unlike Sales Development Rep quotas, SaaS Sales quotas tend to be fairly straightforward… at least in an ideal world, they are. In actuality, there seems to be a combination of detailed financial breakdown and finger-in-the-wind guess and check methodology when building a sales compensation plan.

Instead of going into deep detail about Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV), there are a few simple rules to think about when setting a quota.

Rule 1: Sales reps have to pay for themselves

This one seems very simple, but given that most salespeople in SaaS have a base salary (plus benefits, overhead, etc.) a rep should be responsible for generating revenue equal to some multiple of their On-Target Earnings (OTE). Depending on who you ask, the industry-standard ranges from 3x OTE to 8x OTE for an annualized quota. And of course, OTE depends on the industry, experience level, location, etc. Let’s assume that your reps are mid-level SaaS salespeople making $120k OTE. If we use a fairly standard 5x OTE, that would mean that their annualized quota would be $600k. Now is your quota monthly, quarterly, or annual?

Rule 2: Consider your sales cycle length and your company stage

In deciding whether your reps should be on a monthly, quarterly, or annual quota you first need to think of your company stage. If you’re an older, well-established company, then it’s more likely you can afford to have a longer quota period. There are some organizations that have semi-annual or even annual sales quotas but quarterly seems to be a good option. If you’re a startup, having shorter quota periods will drive a sense of urgency in your reps. Monthly is likely the way to go. Assuming the $600k quota from before, this means $50k monthly or $150k quarterly quotas.

Rule 3: Reps have to be able to achieve their sales quota

No matter how much analysis and planning are put into a quota, if sales reps can’t hit their quota they may feel defeated and give up rather quickly. This isn’t to say that every rep should be able to hit their quota every month, but if the sales quota feels out of reach or no one has ever hit it, that’s a bad quota. A good standard is that 80% of reps should be hitting their quota every month. That way, your top-performers will pick up the slack for the bottom performers and the organization as a whole will hit their quota. Taking the $50k monthly quota from before, if your sales reps average $25k per month in sales, then you’d either need to lower your quota, lower the OTE, or increase your per-rep sales. If your sales reps average $75k per month in sales, then it’s time to either increase quota or pay them more!

Non-revenue sales quotas

Most sales compensation plans are based around revenue quotas, but some have non-revenue components to them. Here are the most common of those ‘non-revenue’ quotas:

1. Number of deals/users: Not all sales organizations are built around revenue, some are built around the number of users on an app or the pure number of deals a rep closes.
2. Activity: If a sales organization is looking to drive high activity (dials, demos, emails, in-person meetings, etc.) they might impose an activity quota. While these activities don’t guarantee results, they can drive the right behaviors. It’s not recommended to maintain an activity quota permanently, as it will end up with either demotivated reps or reps doing activity for the sake of hitting their quota instead of focusing on revenue.
3. Retention: In cases where an organization has a high turnover rate of new customers, some sales reps have a retention quota. This could mean either a certain number of their customers renew their contracts or a certain percentage of their customers renew their contracts.

Over time, setting your sales quotas becomes less guess and check, and more formulaic based on the appropriate On Target Earnings, your company stage, and how achievable the sales quota is. Whether you’re setting sales compensation plans for Sales Development Reps or SaaS sales, remember that simpler is better. And as always, I’m available by email at graham@quotapath.com if you ever wanted to run a sales comp plan by me.

Are you just beginning your career in sales and struggling to understand your sales compensation plan? Or, maybe you manage a team and are looking for sales compensation plan examples. Between salary, commissions, bonuses, spiffs, and incentives—there are a lot of variables—and understanding your sales compensation plan may feel overwhelming now, but we’re here to break it down for you.

What is a sales compensation plan?

For individual sales reps, a sales compensation plan (or commonly ‘comp plan’) summarizes how much money you can and will make and might consist of base salary, commission, incentives, and benefits.

A sales compensation plan drives the sales team’s performance and motivates them to achieve organizational goals and increase revenue. Companies will structure their sales compensation plans based on budget, business and team structure, competitive landscape, and employee needs. The right kind of sales compensation plan will reward desired behaviors and foster more consistent performance on a monthly, quarterly, and yearly basis.

What components make up a sales compensation plan?

Salary

A base salary is a set amount of money that sales reps earn no matter how well (or poorly) they perform at their job. Base salaries are designed to help sales reps to manage their cash flow and cover basic living expenses. Companies in very competitive markets will typically have a lower base salary or no base salary at all in their sales compensation plans. For example, most auto salespeople, realtors, and door-to-door sellers don’t have a base salary, whereas a company with fewer competitors may balance a base salary and commissions more equally. Typically software sales, medical sales, and hardware sales will receive a base salary.

Commission and Incentives

It’s no secret that sales reps often thrive off of competition, and there are a number of incentives that can be used to motivate them to achieve company goals, and benefit them individually by rewarding their hard work.

A sales compensation plan with commission or bonus components allows flexibility in how much they earn and can enable some reps to earn very high incomes.

Commissions
Commissions are earnings received based on performance and are most commonly a percentage of the deal sold.

• Flat Rate Commissions: Rates remain the same for all items that meet the criteria, i.e. 10% of any deal sold
• Rate Commissions: Rates change based on achievements and filter criteria, i..e. you earn 10% of new business deals and 15% of retention deals
• Fixed Amount per Deal Commissions Plan: Pays a specific rate for every deal sold, i.e. $50 for every deal sold

Bonuses
Bonuses are used as an incentive for when sales reps meet or exceed a pre-defined goal. They might be expressed as a percentage of cumulative revenue, or as a dollar amount. Bonuses can be structured and awarded in different ways, here are a few examples:

• Year-to-Date Bonus Plan: Bonus awarded for achieving quotas set for each quarter, month, or milestone during the year, i.e. if you hit your monthly quota, you earn a $500 bonus
• Ranking Bonus: Bonus awarded for final ranking within a group of users, i.e. if you’re the top seller for a month, you earn a $500 bonus
• Bonus on Multiple Quotas: Bonus awarded for achieving a combination of quotas, ie. if you hit your new business quota and your retention quota, you earn a $500 bonus

Accelerators
Accelerators are used to reward reps for exceeding the set targets and goals.

• Accelerated Rate Tiers by Attainment: Rates change based on quota attainment or amount sold, i.e. 10% of any deal sold until the quota is achieved, at which point you earn 20% of any deal sold
• Accelerators with Multipliers: Rates change based on achievements and are multiplied by additional criteria i.e. you earn 10% on 1-year deals, 15% on 2-year deals, and 20% on 3-year deals

Examples of sales compensation plans

So how might all of these variables work? Here are some examples of sales compensation plans comprised of some, or all of these elements:

Commission-only sales compensation plan
A commission-only plan means reps earn entirely based on their performance. With a plan like this, the risk for the company is relatively low, but it’s challenging for both the company and the reps to forecast any expenses and budget. These plans are common in real estate, auto sales, and door-to-door sales. Sales reps take caution with these plans as it may be an indicator that the company isn’t truly investing in developing talent.

Reps typically get paid anywhere between 5% to 45% commission. The percentage is influenced by how much effort goes into a sale, and how complex the sales cycle is.

Base salary plus commission sales compensation plan
This is the most common sales compensation plan. It provides the rep with a fixed base salary as well as earned commissions, giving them reliable income and an incentive to sell. Companies with this plan structure have greater clarity into expenses, plus the benefit of being able to tap into the competitive nature of salespeople.

Base salary plus bonus sales compensation plan
A base salary plus bonus sales compensation plan is effective when reps tend to consistently surpass pre-set targets. It might be structured with a traditional bonus based on hitting multiple quotas, or with an accelerator. A plan like this allows a company to maintain predictability while still motivating reps to close deals.

There are some really terrible compensation plans out there. A successful sales compensation plan will be specific to the role, aligned to company culture and goals, and designed to drive the right behaviors.

The potential combinations of salary, commissions, bonuses, and incentives are endless, leading to complex spreadsheets and formulas to calculate your earnings. But, it takes less than 5 minutes to add your plan to QuotaPath. Start automating your earnings calculations and spend that time-saved closing deals.

As Director of Sales Development, I ran a team of 40 Sales Development Representatives (SDRs) for about three years at a Software as a Service (SaaS) company in Austin, Texas. Previously, as a sales manager, I learned that it’s tough to set a sales quota… and just as hard to set quotas for SDRs. During my tenure, the sales quota shifted a few times depending on company needs — and with it, the SDR quota shifted.

For managers trying to do sales quota management and those who are creating a compensation plan for SDRs for the first time or wondering how to re-design your company’s sales development compensation plan, here are a few ways to think about setting quotas that set your reps up for success.

While sales quotas are generally just based on how much revenue the rep generates, there are several different ways that SaaS companies set SDR quotas. These typically fall into three buckets:

1. Activity
2. Opportunities
3. Revenue

Oftentimes Sales Development Rep quotas are based on more than one of these buckets.

Activity

What it is: For the sake of this post, “activity” means anything that the SDR has complete control over and can vary depending on their level of effort.

Examples: Number of cold calls made, number of emails sent, number of new companies prospected

When to use it: As with any sales quota, you will get the results that you compensate for. So managers should use activity as a quota when your SDRs have low activity and you need it to increase. If, for example, your SDRs are ‘whale hunting’ (only going after theoretically high-value accounts or contacts), adding in an activity quota can improve your quantity of opportunities.

When not to use it: Because there is no intrinsic value to cold calls and cold emails, I would never recommend using activity as your sole quota metric.

Opportunities

What it is: Opportunities can mean any number of different things, but this is the placeholder between activity and revenue. This can be as early in the pipeline as a set demo or as late as a sales qualified opportunity. How far along in the sales process you judge your SDRs depends on how involved they are with the sale. If they set the meeting and pass it off to a sales rep without any qualifying, then a Demo Set quota might be ideal. If the SDR does a discovery call or even a demo, then compensating on the number of pipeline opportunities would be better.

Examples: Demos Set, Demos Held, SQLs (Sales Qualified Leads), Sales Accepted Opportunities, Pipeline Opportunities

When to use it: If you need a proxy for Closed/Won revenue, I would recommend using opportunities as your quota. It’s a good mid-point between activity and revenue because SDRs feel they have control over their performance and there is a value-add to the organization.

When not to use it: If your sales reps close nearly every opportunity handed to them, you’d be better off using revenue as your metric. The same applies if your sales cycle is transactional or very short (<5 days); revenue or number of Closed/Won opportunities is a better metric for you.

Revenue

What it is: Pretty straightforward, revenue is the value of Closed/Won deals created by your SDRs.

Examples: ARR, MRR, Revenue, Number of Closed/Won deals

When to use it: Using revenue as a quota is most effective when you can directly attribute your SDR’s efforts to a deal closing. Ideal for short sales cycles (<30 days) and smaller deal sizes (<$25,000 average contract value). Also when you’re looking to move your SDRs into a closing role, tying them to revenue can help familiarize them with what a good opportunity/account looks like.

When not to use it: You want to empower your SDRs to control of their destiny (and paychecks). You also want the work they do to have a tangible impact on the Closed/Won deals. Therefore if your sales cycle is longer than 90 days, it’s hard to attribute your SDR’s efforts to those deals. You can go an entire quarter and not know if you need to change your SDR’s behaviors, target accounts, etc. Additionally, if your organization is closing 6 figure enterprise deals at a rate of one to two per quarter, I would urge you away from using revenue as a quota for SDRs for similar reasons.

How to set a quota

Unless you subscribe to the ‘guess and check’ methodology of quota setting or you’re a brand new sales organization, there’s going to be some math involved in setting quotas.

Here’s the formula that I follow:
Activity x conversion rate = Opportunities x close rate = # of Closed/Won deals x average contract value = Revenue

Or working backward:
Revenue / average contract value = # Closed/Won deals / close rate = Opportunities / conversion rate = Activity

Conversion rate is the % of activities (calls, emails, chats, tradeshow leads, etc.) that turn into what you’ve determined to be an opportunity.

Close rate is the % of those opportunities that turn into Closed/Won deals.

With this math, you can formulate what success looks like for each of the different quota types.

A lot of information goes into how much revenue each sales development rep should generate: customer acquisition cost, lifetime value of a customer, SDR salary, growth model, etc. but if you’re looking for the simplest guide, you can go with 5-8x the SDR’s on-target earnings (OTE). That means that for an average SDR making $72,000 on target, you’d be looking for them to generate $360,000 to $576,000 per year or $30,000 to $48,000 per month. Let’s say for this example our goal is 6x OTE, so $36,000 per month, average contract value is $18,000, the close rate is 10%, and our conversion rate is 2.5%.

$36,000 revenue / $18,000 average contract value = 2 Closed/Won opportunities / 10% close rate = 20 opportunities / 2.5% conversion rate = 800 activities (40 per day)

So there you have it, with a little understanding of various quota metrics and with this helpful formula, you can go set your quotas with confidence! If you have any questions about your current SDR quota, I’m always here to help. Feel free to email me at graham@quotapath.com.

Imagine, after weeks of trying to get in touch with the right person, that you’re finally talking to a potential customer that could make a big purchase. You’ve done a ton of research about their company, their industry, and their pain points. You feel totally prepared to knock it out of the park… until they ask you a question about your own product that you don’t know how to answer.

Suddenly, you’re left scrambling through your company’s resources trying to get them an answer quickly and save the conversation, but you’re floundering. Your confidence takes a hit, and what could have been an amazing opportunity to make a sale turns into a frustrating mess. You try to smooth things over and say you’ll get back to them with some answers in the next few days, but you know you haven’t made the best impression.

If imagining yourself in that scenario makes you break into a cold sweat, you’re not alone.

A lot of sales training programs and books focus on the skills involved in selling, such as how to make successful cold calls or nail follow-up emails. These skills are certainly crucial to help you connect with your prospects effectively and get your message across. There’s one big gap that this kind of sales training leaves out, though: what the message actually is.

Once you’ve gotten a decision maker’s attention, what message do you want to share with them about your company? How can you help them? What features make your company’s product a better fit than your competitor’s? If you’re unable to answer these questions for yourself before you start a conversation with a prospect, it may be time to brush up on your product knowledge.

Why product knowledge is so important

Most modern buyers come into any sales conversation having done their research. Your prospects have likely scoped out all the information about your product that’s available on your company’s website. They may have even looked at what other people have to say about your product— both glowing reviews and any major complaints.

That means you’ll need far more than a basic understanding and some general talking points about your company’s product to keep the conversation moving toward a sale. You have to become a well-versed and fluent expert who can create a compelling case for your prospects to make a purchase.

Here are some of the key benefits product knowledge fluency can offer you as a sales rep:
It helps you overcome objections. Knowing your product inside and out will help you to answer any tough questions and assure your prospect that they’re in good hands.

It builds your confidence and enthusiasm

When you know you’re prepared for any question or objection that may come your way, you’re far more likely to enter a sales conversation with pep in your step. A salesperson’s excitement can help create a more positive response from prospects.

It helps you adapt your pitch

Fluent product knowledge can help you understand how your product can be useful to a wide variety of prospects so that you can highlight the specific features that may be more useful in each unique situation.

It makes you a reputable expert

In any sales conversation, you represent your company. When you’re knowledgeable, helpful, and confident, it makes your company’s product look more trustworthy as a result. This can make all the difference for prospects who are on the fence about the sale.

How to get the product knowledge you need

At the beginning of your time in any sales organization, odds are good you were given some basic product knowledge to help you navigate sales conversations. But the smartest sales reps don’t let the training end there; they keep increasing their product knowledge, looking at all aspects of what they’re selling and learning how to talk about it fluently and confidently.

That means you shouldn’t just know your value proposition and how your product works; you should feel very comfortable talking about:

• What concerns are most pressing to your prospects
• How your company’s product solves these problems
• Any relevant changes or regulations in your industry
• What your competitors offer, and how your product is different (and ideally, better)
• Any negative reviews or common complaints and how your company has responded

Other than regularly looking over your company’s internal resources, what can you do to increase your product knowledge fluency? Here are some ideas to try:

Read customer reviews

If your prospects are reading what your existing customers have to say, you should do the same. Don’t just look at the reviews for your own company, either; take a look at what customers have to say about all of your competitors. This will allow you to see what features are most popular, and which ones cause the most frustration. It’ll also allow you to learn some of the jargon that your prospects use, so you can speak their language a little more easily.

Test drive the product yourself

Whether you’re selling a physical good or a software tool, a little hands-on experience with your product can help you put yourself in your customers’ shoes and will help you know how to talk about your product more knowledgeably.

Check in with your team

Grab lunch with some of your colleagues and/or sales manager, or take a few minutes at team meetings to ask any common questions you’re hearing from prospects. Your colleagues are likely hearing the same objections and feedback, and they may have some particularly good answers you can use in your own sales conversations. They may also be able to direct you to any resources they refer to regularly.

Take control of the conversation

Being able to speak fluently about your product means you’re far less likely to find yourself in a deer-in-headlights position in a sales conversation. Instead, you’ll be able to make a thoughtful and well-researched pitch that resonates with potential customers and makes them feel confident about their decision to purchase from your company.

Looking for another way to step up your game? With QuotaPath’s sales performance management app, you’ll get a clearer picture of your progress toward your goals so you can keep your eyes on the prize. Get started here.

I hear the question “what’s your favorite sales book?” so often you’d think I would be tired of it, but that couldn’t be further from the truth. I can’t pick just one book. Different books handle different parts of sales better, so I’ll give a recommendation based on a few different aspects of sales.

Note: There are so many good sales books out there, and they often contradict each other. While that can be intimidating to many sales reps (Who’s right? Who’s wrong? Why do they disagree?), I think there’s no such thing as a perfect sales methodology, so there can’t be a perfect sales book. Take parts from each book and combine it into something that works for you.

Life:

Extreme Ownership by Jocko Willink and Leif Babin
I realize it’s unorthodox for me to start out with a book that’s not specifically about sales, this book taught me more about how to be a better employee, salesperson, manager, and person than any other book I’ve read. It should be the next book you read.

Sales Process:

The Challenger Sale by Brent Adamson and Matthew Dixon
This book does the best job of encompassing all the different components of sales that I’ve found. It uses a lot of statistics to back up the methodologies it presents. This book definitely benefits sellers from beginner to VP.

Sales Leadership:

Sales Acceleration Formula by Mark Roberge
This book won’t teach you how to deal with conflicting rep personalities or how best to motivate an underperforming rep. However, the sections on how to hire successful reps, train them to be rock stars, and provide them with great opportunities through demand gen are invaluable to a modern sales leader.

Sales Attitude:

How I Raised Myself From Failure to Success in Selling by Frank Bettger
While this book has lost a lot of its luster over the years (there’s a whole section about how to organize your Rolodex), the first section, the one about Enthusiasm, still rings true today. If you don’t feel like learning how to sell insurance in the 1940s, there are large swaths that can be skipped — but don’t skip the enthusiasm part.

There you have it. Not a complete list of books I recommend, but these are the 4 most common books I tell people to read. If you have any that I missed, please email them to me: graham@quotapath.com. I’m always on the hunt for the next great sales book.

Bonus, non-sales book:

Predictably Irrational by Dan Ariely
Behind Extreme Ownership, this is my favorite all-around book. As someone who studied economics in college, I assumed that people act in a rational manner. You increase price and demand will increase. I can judge how much something I own is worth just as if I didn’t own it. Dan Ariely turns these assumptions on their head and does it with storytelling grace. I could probably find a way to make this book about sales, but it’s better if you just enjoy it for what it is.

QuotaPath’s CEO and Co-founder, AJ Bruno, is the definition of a mover and shaker. On any given day he’s coaching local entrepreneurs on pitch decks, having walking 1 on 1’s with his team, thinking about QuotaPath’s next round of funding, strategizing on pricing and packaging, and that’s just the beginning.

After his diverse experiences leading and co-founding his first company TrendKite, a PR analytics software based in Austin, Texas, and now onto his second company, QuotaPath, he makes the perfect candidate for podcast 1 to 10. Hosted by Eric Sharp, CEO and Founder of ProtoFuse, 1 to 10 focuses on sharing stories of companies that are scaling from 1 to 10 million in revenue.

Eric sat down with AJ, not to chat about sales strategies, tactics, or principals, which are common topics on the podcast and AJ’s area of expertise, but about another one of AJ’s passions – growth, hiring, and cultivating your employees into leaders.

Here are a few highlights from the podcast that are helpful for founders, top performers, entrepreneurs, and those who are wondering what first hires should really look like.

Interviewing is a two-way street

Your first hires are just as much interviewing you as you’re interviewing them. Startups and new businesses don’t have much credibility. There isn’t much press people can read about or others to converse with on their experiences. So, make part of the conversation about yourself. AJ talks about sharing your background and offering sources they can do reference checks on. This establishes trust and transparency from the get-go.

Hire people who resonate with the mission, vision, and values

The most passionate hires are those who get behind the idea. You want people who understand what you are building, and how it impacts those you are building it for. AJ explains how critical mission, vision, and values are to a business and how they should come out of the interviews you’re having in the early days and beyond. Skillset can be taught but your people make up your culture, so find the ones who are passionate.

Teachability is a key factor in finding the right hire

A pillar of staying at a company is learning and growing. This is one of AJ’s beliefs that we can attest to at QuotaPath. One attribute that is monumental in turning hires into top lieutenants is being humble, open and willing to learn. During the interview process, test for teachability as AJ did. He would give his interviewees a framework for a presentation, have them present, give feedback on what went well and what could be improved, and ask them to re-present a portion. This gives you on-the-spot feedback on how they view and handle feedback.

There’s plenty more goodness in this episode, so listen on for more insights from AJ on how to construct effective 1 on 1’s, ENPS surveys to gauge employee engagement, and how to invest in your first hires so they become managers, leaders and ultimately champions and top lieutenants.