450+ leaders
450+ SaaS Finance, RevOps, and Sales leaders from the U.S. and U.K.
2024 SALES COMPENSATION PLAN REPORT Solving the Biggest Sales Compensation Challenges
We surveyed over 450 Finance, RevOps, and Sales executive leaders across SaaS to identify the top pain points surrounding sales compensation in today’s market. Objectives of this report:
- Identify where the disconnect between Finance, RevOps, and Sales Leadership occurs
- Explore the challenges faced by organizations during the compensation plan design process
- Uncover the biggest holes when managing commissions
- Offer guidance to set up for success in 2024
15 questions
15 questions on compensation plan design, execution, management, performance, and errors.
Why?
As the market has changed, compensation plans haven’t kept pace. This has led to mismatched metrics and sales activities, resulting in dips in team-wide performances.
Our research revealed 4 key takeaways surrounding sales compensation plan design, management and execution, and its impact on performance and commission disputes.
Every leader wants to see improvements to their plans
Simplicity and the effectiveness of compensation plans to drive business metrics pose the biggest concerns.
- 97% of leaders expressed challenges with their compensation plans, with “maintaining simplicity” as the top issue (30%)
- 100% experience issues while crafting compensation plan designs, citing “alignment to business goals” as the most needed area of improvement (25%)
39% admitted their comp plans contradict business targets
This creates an opportunity for Finance, RevOps, and Sales to collaborate earlier in the comp plan design process. Find out the toughest blockers and how to avoid those next year.
RevOps, Finance, and Sales view success differently
The compensation plan strategy should be a collaborative effort that leaves all parties confident in their decisions. Our report told a different story.
- 1% of RevOps leaders felt strongly that their plans drive business metrics versus Finance’s 12%
- 20% of Finance strongly agreed that their comp plans motivate reps compared to RevOps at 9% and Sales at 5%
These varying levels of confidence may have something to do with when teams loop in Finance for feedback.
This often occurs at the end of the design process when it’s time for Finance’s approval. That’s when Finance implements guardrails to protect the business from inefficient effective rates or extreme edge cases by removing or adjusting compensation components or rates proposed by Sales and RevOps.
Most reps find their comp plans difficult to understand
Overly complicated compensation plans delay rep understanding of how they earn commissions, leaving revenue on the table.
- 78% of revenue leaders said their sales reps find it difficult to understand their compensation plans
- 60% of reps take 3 to 6 months to understand fully
What happens when your reps don’t understand how they earn commissions?
- Misaligned incentives: Reps focus on wrong deals or those less profitable for the business and themselves.
- Commission disputes: When reps don’t understand their comp plans, they’re more likely to raise flags, ask questions, and slow down operations.
91% of organizations missed quota expectations
The challenges referenced throughout the report led to missed quotas and targets in Q1 and Q2 of 2023.
- 9% hit above 80% team-wide attainment in the first half of the year
- Leaders credited market conditions (36%), lack of experience (36%), and misaligned sales activities (35%) as the three leading causes
Compensation plans must align more with the company’s goals and be easier to understand
Many leaders need to overhaul their sales compensation plans and processes with alignment to business goals, motivating sales reps, and maintaining simplicity as the three pillars to overcome in 2024.
Ensure your new compensation plans address those needs. Download the report now.