Update: Although this piece originally published in 2019, AJ has confirmed as of Dec. 9, 2021, that the following remains true today. 

Given my experience leading and running sales teams and now having founded a commission tracking software company, people ask me “what’s the best comp plan?” all the time. Unfortunately, there’s no one answer to that question. It depends on what you’re selling (software has a very different comp plan vs. car sales), what your average contract value is, how long your sales cycle is, etc. (Check out my post where I break down the good, the bad, and the ugly of comp plans).

The other day, I was asked the question in a unique way that made me stop and think. “What’s my favorite comp plan?” Now THAT I can answer!

My favorite comp plan is this:

• Base salary – 50% of total pay being base salary, 50% being variable
• Flat % of anything you close
• A bonus if you hit your monthly quota
• A bonus if you hit your quarterly quota (ideally the same as monthly)

(This plan assumes bookings vs ARR/MRR)

That’s it.

Why is it my favorite? Three reasons.

1. Simplicity. My rule of thumb is that plans should be so simple, someone could explain it to you in about 15 seconds.
2. Consistency. A scalable sales team relies on consistent performance. If your entire team misses their quota for two months then crushes it on the third that causes a lot of stress and heartburn. By having a monthly quota bonus, you incentivize people hitting quota month after month.
3. It allows reps to ‘make up lost ground’. Say a rep misses their quota on the first month of the quarter, they still have a chance to get two of the three monthly bonuses AND if they overperform the next two months, they can get the quarterly bonus.

There you have it. Like I mentioned, not one comp plan fits all. As you’re restructuring or coming up with your plan for 2019, keep the three points above in mind. The simpler the plan, the better it is.

Oh, and if you want to track and calculate your commissions without using a spreadsheet, check out QuotaPath. We’re pretty good at that. Also, if you already have an account, see if your comp plan follows these three simple guidelines.

People shouldn’t have to choose between working and voting, yet with Election Day not being a public holiday and falling in the middle of the week, millions of Americans aren’t able to take time off to make it to the polls. Voter participation has been as low as 36% (thirty six!) in recent years, far too often because of life and work obligations.

Today, we’re seeing corporate America take a stand and use its influence to promote voter engagement. CEO’s and leaders are coming together in campaigns like Time to Vote, Rock the Vote, and ElectionDay.org. QuotaPath has proudly joined Patagonia, Walmart, Lyft, PayPal, and more than 400 other companies in the Time to Vote campaign to increase voter participation in the upcoming midterm elections. And our efforts are paying off! According to a survey from Society for Human Resource Management (SHRM), in 2018 44% of U.S. employers offer their workers paid time off to vote, which is an all-time high.

While QuotaPath has made Election Day a company-wide holiday, other companies are creating a variety of programs to remove barriers of participation. Some companies, like Lyft Inc., are setting a “no-meetings” policy or hosting voter registration drives. There’s no one-size-fits-all solution, but it’s important that we all support employees during the election in whatever way works for your organization.

But of course it doesn’t start and stop there. There’s so much more companies can be doing such as including voter registration forms in employee onboarding packets, offering rides to polling places, hosting informational sessions on local candidates, having voting parties, being vocal on social channels, and providing direction to absentee ballot application sites, just to name some ideas.

We hope that we set an example for companies in Philadelphia, Austin, and beyond to join us in the movement. We want to encourage others to commit to giving employees the time, flexibility, and resources they need to vote. We’re aiming to create a pro-voting environment at QuotaPath. By providing employees with information on local issues, candidates, and details on early voting, we can help take out the intimidation and confusion by demystifying the voting process, and even make it fun.

QuotaPath is celebrating democracy and using our voice and influence to make a difference this midterm election. We’ll see you at the polls!

Whether you’re just getting started in your sales career or you’re a seasoned pro, there’s one inescapable truth: success requires constant improvement and adaptation. Even the highest-earning sales reps can’t afford to rest on their laurels or let their skills stagnate. No matter how big yesterday’s win was, there’s always another goal to reach — and your income depends on reaching it.

That’s why the most successful salespeople are lifelong learners; they’re driven by their curiosity to look for the best ways to improve their skills and increase their sales numbers. As part of this continued effort, many sales reps will read countless books and attend numerous conferences and seminars over the course of their careers. But in a sea of resources and thought leaders, which ones are actually worth your time? Here are a few great options to help you get started:

Personalized coaching

For the most meaningful career growth, nothing beats personalized, one-on-one sales coaching. Sound pricey? You’d be surprised! If you’re going with a high-profile thought leader, maybe. But some of the very best coaching you’ll get throughout your career in sales will come from sales managers and more senior sales reps at your own company.

Since your manager’s success hinges on your ability to make more sales, they should be more than willing to do whatever they can to help you become more effective at your job. Whether it’s by listening to your customer calls to give you concrete feedback about how to keep the conversation moving forward, or by giving you pointers on what to include in follow-up emails for the best response, their timely and specific advice will go a long way toward helping you improve.

Sales managers and other sales reps can also be excellent resources to help you increase your understanding of the product. The better you know what your company is offering, how it stacks up to competitors, what pain points it solves for clients, and other important details about your product, the better you’ll be poised to perform.

Sales books

The specifics of selling have changed a lot in the past few years. With more tools at your disposal than ever before, it may seem like the whole sales process has fundamentally changed. But while your job looks different than it would have several decades ago, there are some principles and tricks of the trade that remain as useful as ever. These classic sales books still make best-of lists regularly, and with good reason:

• The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey
• How to Win Friends and Influence People by Dale Carnegie

For some more recent thought leadership, here are a few of our favorite books written by sales experts in the last few years:

• Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss
• The Challenger Sale: Taking Control of the Customer Conversation by Matthew Dixon
• Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to Go From $0 to $100 Million by Mark Roberge

Blogs and podcasts

Prefer your sales information a little more bite-sized? Podcasts and blog posts are a great way to get useful insights when you don’t have time to sit down and read a whole book. Here are a few of our favorite podcasts:

• Masters of Scale with Reid Hoffman
• WorkLife with Adam Grant
• How I Built This

Here are some blogs with food for thought and great actionable advice:

• Sales Hacker
• Jill Konrath’s blog
• The Sales Blog

By taking advantage of the resources available to you in your workplace and learning new approaches from trusted thinkers in the sales industry, you can continually improve your skills to become more effective.

We have another way to power up your performance: having a clearer picture of your progress toward your goals. With QuotaPath’s sales performance management app, you can get real-time data about where you stand. Create an account here.

Where you work can make or break your success as a sales professional. But finding the right sales job isn’t as easy as it sounds. Too often, salespeople work at jobs with cyclical routines and stifled upward growth. In a field where time is money, you can’t afford to wait for your situation to improve.

But before you take your talent to a new company, it’s important to know that your potential employer can help put you on the career path you want. Here are the five most important factors to look for in your next sales job:

1. Industry growth

Working at a job is an investment of your time and resources, so make sure your chosen industry is worthwhile. Consider the health of the industry you’re pursuing. Will this product or industry endure? Will the skills and relationships you’re building remain relevant for the long haul?

Consider fields with strong growth like technology and software. You can gain insight by learning about the sales industries expected to thrive in 2018 and the fastest growing US industries.

2. Compensation plan

Your individual compensation plan will either bring out your best performance or confuse and disappoint you. Look for plans that are simple to understand, have reasonable quota ratios, and are obtainable. Ask employers about the team’s current commission data to get a realistic idea of your earning potential. Steer clear 100% commission organizations. These companies have less incentive to invest in your long-term growth.

3. Training and learning opportunities

Search for a position in a company that supports and retains their top talent. Effective sales training includes communicating company processes and regular coaching on important sales skills. Training should also be continuous and motivating; look for an organization that is committed to providing sales reps with constructive feedback and incentives to promote achievements.

4. Career development

Does your prospective employer have the capacity to offer you the long-term career growth you want? Your career path can change depending on the size of the company and the structure of their organization chart.

Smaller companies often provide you with ample opportunities to prove yourself, while larger companies have a more clear-cut process for career progression. Before accepting a job, tell your prospective employer about your long-term goals and ask if they have a defined path to get you there. Make sure your plan uses quantifiable data—like quota metrics— so there are objective data points to mark career milestones.

5. Culture match

An amazing sales team can make the difference between loving what you do and counting down the days until you quit. Discover a sales culture that works for you by connecting with sales reps in local networking groups and attending happy hour events. This will help you build up your job-referral network and test out your chemistry with potential new sales teams.

Take charge of your future success

Though changing sales jobs may seem overwhelming, it helps to know what you want before you send your resume over. It takes research and self-discovery to find a company that will help you succeed.

But closing the deal with prospective employers is a two-way street. Make sure you can prove your value to hiring managers. You can do this is by sharing past sales results with QuotaPath’s quota-tracking software.

QuotaPath is an all-in-one application that helps you improve every part of your sales performance. Use its powerful and easy-to-use dashboard to track important KPIs, manage your pipeline, increase your commision checks, and keep you motivated to hit your sales goals.

The best part?

QuotaPath is free for sales reps. So what are you waiting for? Create an account here.

Whether you’re trying to get in touch with a decision-maker, schedule a demo, or move a deal along, it’s important to stay in contact and keep your company top of mind for your prospects. One phone call is almost never enough to make a sale, so strong follow-up emails are some of the most valuable tools at a sales rep’s disposal.

It’s a good idea to have several different types of follow-up emails — to stay in touch after a cold call, a voicemail, a demo, after several unsuccessful outreach attempts, etc. — drafted and ready to personalize. But even though the purpose of a follow-up email (and the content therein) might vary, there are some basic guidelines that you should follow for all your correspondence with a prospect:

Give them time

The last thing you want to do when following up with a prospect is to become a nuisance. Even the most interested contacts have a lot on their plate, and will likely need a little time before they take action. Show your contacts that you respect their time constraints by waiting a few days after a call or an email before your next attempt to reach them.

Get their attention (the right way)

Your contacts are busy people, and their inboxes are probably stuffed with unread or unanswered emails. An email with a vague or boring subject line is far less likely to get opened. If you want to avoid that fate, take some time to craft a compelling and concise subject line. However, don’t flag your email as high priority; your follow-up message is not a life-threatening emergency, and flagging it as such is more likely to annoy your contact than spur them to action.

Provide value, but keep it short

If you’re reaching out after a cold call or a voicemail, remind them briefly who you are and what you discussed on the phone. Ask them if there’s a convenient time for them to talk to you to learn more about your product or service. If you’re following up after a demo or initial sales call, recap the benefits you discussed on the phone.

You may want to include case studies, white papers, or any other applicable content that might answer some common questions you encounter in the sales process. But whatever information you need to present to the contact, try to keep it as short and sweet as possible. In fact, it’s a good idea to use bullet points where appropriate to keep the content scannable.

Make the next steps clear

Even if your prospect is interested in what you’re offering, they won’t move forward if it’s unclear what they should do next. In the body of the email, let them know what to expect: will you contact them again in a few days, or should they respond to your email with any additional information? If there’s an action required on their end, spell that out as clearly as possible so there’s no confusion.

Don’t quit after one email

One or two unanswered emails may feel like a clear sign that your contact has lost interest, but don’t give up so easily. Many contacts need time and multiple touchpoints before they’re ready to move forward in the sales process. As long as you’re being helpful and considerate (read: not annoying), persistence increases the likelihood that you’ll make a successful sale.

Want a clearer picture of your progress toward your sales goals? Create an account here.

I was having the same conversation with my managers each month when we got to our talent review meeting. Every month, we stacked ranked the team in three categories, “Outstanding,” “Successful,” “Developmental.” It was an hour-long meeting that took a lot of thought as we carefully evaluated each person on the team.

When you think of what makes a truly great sales rep, what traits come to mind? Common answers like grit, tenacity, or hard work come to mind. Others may think of emotional intelligence or a gregarious personality. While these attributes can certainly be helpful, they’re well-trodden territory; any book or seminar is likely to mention them as the markers of successful sales professionals.

In my experience, there are two entirely different attributes that don’t get mentioned enough as strong predictors of how well a sales rep will perform: agility and curiosity.

Agility

Agility is a crucial trait for sales reps for several reasons. For one, an agile mind helps salespeople to think on their feet and make quick decisions or changes in order to make a sale. In a marketplace where buying behaviors change and no two customers have the same needs, the most effective sales reps are the ones who can quickly adapt their tactics or their talking points to get the best results in any situation.

But maybe, more importantly, mental flexibility allows sales reps to roll with the punches and keep looking forward. Sales jobs are very black-and-white in one key way: at the end of the quarter, you know whether you’ve succeeded or failed. When things aren’t looking good, it’s easy to get flustered or to lose confidence. Agile sales reps have the ability to take control of their stress levels in the face of uncertainty and adapt to bounce back after failure so that they can keep pushing toward a goal.

Curiosity

When I’m hiring a salesperson, curiosity is one of the most important markers I look for in candidates. A track record of continuous growth and learning— whether in past jobs or in their personal interests— tells me so much about whether someone will be successful on the job.

Curious people are driven by a desire to continue growing and learning, meaning they’re less likely to become defensive when presented with an opportunity to improve. This makes them coachable and far more likely to ask questions about how they can develop their skills to be more effective. In their day-to-day job performance, curious salespeople tend to do well with talking to prospects and asking useful questions to move the sale process along.

How to become curious and agile

Paradoxically, these two traits are best developed by just practicing them whenever you can. To become curious, ask questions; to become agile, put yourself in situations where agility is needed. Here are some examples of simple habits that can strengthen these attributes:

Do things you don’t know how to do

Try to put yourself in a situation where failure is possible (or likely) as often as you can. These don’t always have to be high-stakes situations; something as simple as trying a new recipe or testing out a new word in your vocabulary will do. Whatever you choose to try, exposure to uncertainty can increase your comfort with it and teach coping mechanisms to help you steady yourself when things are up in the air.

Ask a lot of questions

When you’re out in the world interacting with people, take time to notice things and ask about them. Restaurants and coffee shops are great places to practice this, since they’re social environments by design, but not all of your questions have to be directed toward a person; with all of the world’s knowledge accessible from the computer in your pocket, you can get answers from experts to any question that comes to mind.

Learn a little bit about as many subjects as you can

The more you learn about seemingly unrelated topics, the more you’ll find interesting intersections that may pique your curiosity and drive you to ask more questions. One way to do this is to read a different section of the newspaper than you’d normally gravitate toward. You can also look around in a bookstore or library (or even browse on Amazon) to find a book on a topic you don’t know much about.

There’s no need to become an expert on anything in particular (unless your curiosity drives you to learn more); getting a quick overview of the important concepts is generally enough to help you create the scaffolding for unexpected connections between subjects.

Even if these traits don’t come naturally you, trying out these tactics will help you strengthen the mental processes that can turn you into an adaptable and intellectually-engaged person. Being able to ask thought-provoking questions and maintain your cool when things don’t go as expected are valuable skills for sales professionals— and not just at work. These two traits are useful in so many aspects of modern life, and taking the time to build them will make the world a little easier to navigate.

Want to get a better idea of where you stand on your sales goals? Use our free sales performance management tool here.

It was my second day in the office back in 2008. At the time, we were expected to make 50-60 cold calls to PR professionals, and I was having a hard time swallowing my pride and working up the guts to actually pick up the phone. I remember taking a deep breath, dialing out, and waiting inevitably as a gatekeeper, or WORSE, the contact picked up…

A lot has changed in the last decade and it seems like every few days there’s another splashy new article being passed around LinkedIn declaring the death of cold calling as a sales tactic. With headlines describing cold calls as intrusive, ineffective, and overly labor-intensive, these articles are good for generating engagement, but are they accurate?

Not exactly.

While it’s true that some common practices associated with cold calling have fallen out of favor, the practice as a whole is alive and kicking in many sales organizations. As with any other sales technique, there’s a right way and a wrong way to do cold calling. To make it work for you, it’s important that you know what to do (and what not to do) before picking up the phone.

Don’t: read a script. Do: talk like a person.

This is one big reason cold calling has gotten a bad reputation. We’ve all picked up the phone only to have someone dispassionately read off a sales spiel without coming up for air. While having a list of talking points available is a great idea (and can help you keep the conversation headed in the right direction), just reading from a script is another matter entirely.

Reading a formulaic message drastically reduces the chances that the prospect will respond to your message (or even stay on the phone). Monopolizing the conversation to spit out your sales pitch indicates that you’re uninterested in what the other person on the line thinks or cares about. Though a cold call will definitely be more talking on your end than a discovery call, it’s ultimately still a conversation between two people. Make sure you’re asking questions and keeping the other person engaged.

Don’t: call without doing some research first. Do: have an idea of who you’re talking to.

Another reason cold calling has fallen out of favor—at least with thinkpiece authors— may have something to do with the word “cold.” Cold calling generally used to mean dialing number after number and talking to whoever picked up, but it shouldn’t work that way in a modern sales organization. With the amount of sales intelligence tools the average salesperson has access to (including just a simple Google search), there’s no reason to make a call without taking at least a minute or two to do some research.

Before you pick up the phone, try to arm yourself with a little basic knowledge: what are some common pain points in this industry? Who are the big players? Who are this company’s competitors? This knowledge will allow you to tailor your talking points and position your company as a solution to the prospect’s problems, and will help you stand out from the many truly cold calls this person likely fields each week.

Don’t: let a cold call be your first and only point of contact. Do: follow up (or send an email first).

If your plan was just to call a prospect and hope for the best, you may not get the best results. A cold call works best as part of a multi-touch effort to get in front of a decision maker. That may mean sending an email over first and following up with a call a day or two later. It may look like calling and leaving a voicemail, following up with an email, and attempting to call again a few days later. It might take some experimentation to find the best combination of outreach activities, but no matter what, remember that one call is probably insufficient.

How to get better at cold calling

Cold calling can be awkward if you’re not used to it, but like any other common work task, it’s a skill that you can improve. For your own benefit, consider recording your calls and listening to them as a training exercise. Are you monopolizing the conversation, or allowing engagement from the prospect? Did you sound reasonably well-versed in their goals and pain points? Did you do a little research before calling to make sure your company can help them? Does your voice sound warm, engaging, and enthusiastic about what you’re selling?

While thinkpiece authors love to ring the death knell of cold calling, the facts aren’t on their side. Many thriving sales organizations still use cold calls as an effective part of their process. As long as you’ve done a little bit of research and are confident that you’ve got a solution to this contact’s pain points, there’s no reason to dread reaching out.

Ready to take control of your sales goals? Get access to our powerful sales performance tracking tool — for free!

At least twice a week, I get asked about compensation plans: “What do you think of this?” “How can I get my team to buy into this plan?” “Have you seen this plan before?”

Even worse, when I go through plans with individual contributors, their comments are usually (in a frustrated tone) along the lines of, “Yeah, I’m not sure why we decided to go this route.” or “We’ve changed it at least 3 times in the last year.”

I’ve been guilty of having my own team feel this way as well. That’s why I’ve decided to put together a post breaking down the various components of what makes a good compensation plan.

First off, when you’re deciding whether you want to join the sales team at any company, there are so many factors to consider: the company’s reputation and culture, vacation policies, and the potential for growth, among other things.

But your compensation plan has a lot to do with your happiness and success at the company. That’s why it’s important to know what to look for when you’re interviewing for a sales position in any organization. Let’s take a look at some features of a good compensation plan, as well as some common red flags that should send you running in the opposite direction.

What makes a good compensation plan?

Simplicity

Whether in a smaller sales operation or complex enterprise sales, the best comp plans should be so simple to explain that they could fit on a napkin. As a salesperson, you’re driven by a desire to succeed, and your target numbers and the associated pay should serve as beacons that guide your work. If there’s a lot of guesswork or confusion about how your take-home pay is calculated, you might find that your morale takes a hit and you’re less driven to reach your goals. More than 3 different variables going into a compensation plan is a red flag for me.

Correct ratio of OTE to quota

There are varying opinions about what the ideal relationship between quota and on-target earnings (OTE) should be, but generally, the sweet spot is in the 15-25% range (full compensation). That means if you have a 1 million dollar new business sales quota, your OTE should be somewhere between $150,000 to $200,000. If you’d like to get paid higher, figure out what your quota is and do the math.

The breakdown of base pay to commission will vary depending on the company and the role, but here are some general rules of thumb:

• Sales representatives are typically 50% base, 50% commission.
• Lead gen roles may have a higher base and lower commission, e.g. 60% base, 40% commission
• Account managers will often have an even higher percentage of OTE made up of base salary (something like 70% base, 30% commission).
• Enterprise sales reps (with large deal sizes) might be more like 40% base, 60% commission.

Realistic goals

A sales plan is only as good as it is realistic. Quotas should be ambitious, but they should also be achievable. A good way to tell whether a company sets appropriate quotas is to ask about the percentage of the sales force who are able to hit the mark every time. A company with realistic quotas will have about 80% of their sales reps hit the mark every period.

I’ve had years where rep attainment percentage hovered around 80% and years where rep attainment was around 30%. Guess which one was way more fun to be around?

In addition to realistic quotas, the best companies will account for an appropriate ramp-up time for their sales cycle, and a way for sales reps to get paid until that ramp-up period has passed. For instance, if the average sale takes three months to close, a ramp-up period of one month isn’t adequate for a new sales rep to start closing deals.

What are some red flags to watch out for?

Now that we know what a good sales compensation plan looks like, let’s take a look at some factors that should prompt you to ask more questions.

Complex or moving targets

There are a lot of legitimate reasons to shake up sales compensation plans: a new VP of sales, a new financial model, a new product line, or sales rep turnover, among other factors. Changes to comp plans often come with major structural changes to territories or verticals and peoples’ roles in the company.

But as we mentioned earlier, sales targets serve as a beacon for sales reps to focus on. Too many changes or complications in a short period of time can muddy the waters, obscuring progress toward goals and hurting morale. Companies that frequently change sales compensation plans, quotas, or reporting periods (monthly to quarterly or quarterly to yearly, etc.) may be helmed by leaders who don’t understand the company’s sales cycle or how its products should be sold.

A higher-than-average clawback rate

Clawback policies are common in many sales organizations. Essentially, they mean that if a customer cancels a sale or asks for a refund, the credit for that sale and the associated commission will be taken away from the sales rep who closed the deal. They’re a bummer, but they ultimately shouldn’t represent a huge percentage of your total commission as a sales rep.

In general, a clawback rate higher than about 2% may indicate that: a) the company’s product doesn’t work as advertised, and/or b) sales reps aren’t getting sufficient training to help them identify the right customers.

100% commission jobs

This one should be pretty self-explanatory: if a company isn’t willing to pay you a base salary, they’re not really hiring you as a salesperson for their company. Don’t invest your time and talent in a company that won’t invest in you.

Find your way

Simple, appropriate sales compensation plans aren’t just the sign of a healthy organization; they’re tools to motivate sales reps and power company-wide growth. Well-defined and realistic sales goals (along with the right training and support) should help empower salespeople to meet and exceed their targets. Take a look at the compensation plan for your current company or any organization you’re considering joining to determine whether you’re being positioned for success — or whether you need to take your talent elsewhere.

Now comes the obligatory “Check out QuotaPath!” But seriously, check us out. Our powerful sales performance management solution can help you get a better idea of where you stand on your sales goals, and it’s free to use. Get early access here.