Pavilion Podcast Ep 23 Compensating & Motivating Sales Development Reps (SDRs)

Graham Collins had the pleasure of speaking on the Revenue Collective Podcast where I spoke about compensation plans, SDR compensation, motivation, and more. If you'd like to listen to it, you can do so here.



Transcript

Kacie Lett Gordon:

Hi, and welcome to the Revenue Collective podcast. My name is Kacie Lett Gordon, and I’m your host today. I am very excited. I get to sit down with Graham Collins, who is the head of growth for QuotaPath. This is a special session because QuotaPath is actually our sponsor for this month. QuotaPath is a commission tracking software built by salespeople for salespeople. And after talking to Graham, I get it. If you wake up in a cold sweat, dreading the commissions process QuotaPath is for you. QuotaPath provides commission transparency for everyone involved while motivating reps to sell more. Plus, it’s so easy to onboard, it’ll be running before your next commission cycle. Ditch the spreadsheets and formulas, simplify commission calculation at QuotaPath.com. Today, Graham and I are going to talk about how can actually build comp plans. What should a career trajectory for an SDR look like?

Kacie Lett Gordon:

How do you make sure there is transparency and alignment and how do you deal with it when there’s not. Graham keeps it real, but he also gives some very tangible, very helpful tips for anybody that is in an SDR role or leading SDR teams. So with that, let’s get going!

Kacie Lett Gordon:

Hello and welcome to the Revenue Collective podcast. My name is Kacie Lett Gordon. And I’m your host. Today I have the chance to sit down with Graham Collins. Graham is currently the head of growth for QuotaPath, which if you listened at the top of our episode is also our sponsor. QuotaPath is a sales first commission tracking tool. And Graham describes himself as a Jack of all trades working in sales, marketing, operations, and waxing poetic about comp plans, which I’m very excited about because I think it is one of the most essential parts of the work we do, but it’s often one of the most complicated. In Graham’s previous life, he ran a 45 person SDR team as the director of SDR at TrendKite located in Austin. Today, Graham is coming to us from Maine, with his wife and two dogs. He’s very passionate about good comp plans, craft beer, and woodworking. So we have our very own Revenue Collective Ron Swanson here. Welcome, Graham.

Graham Collins:

Hi there. How are you?

Kacie Lett Gordon:

I am doing good. So I have to start because I also have two dogs who I just had to put outside because they were acting like absolute nutjobs. What kind of dogs do you?

Graham Collins:

So I have two cattle dog mixes. They’re blue heeler, Australian cattle, dog mixes. They’re a couple of mutts, but I love them.

Kacie Lett Gordon:

I have a very specific caricature in my head. Now you were in Maine, you’re woodworking. You have your cattle dogs. Like I’m looking at you right now. You’re rocking like a USA sweatshirt. So there is an awesome image of you in my head that I, I hope our conversation.

Graham Collins:

All right. Well, I hope I live up to it.

Kacie Lett Gordon:

That’s great. All right, Graham. So tell me a little bit about what your world looks like today. Obviously, you’re with QuotaPath and I want to hear a bit about the company, but also a bit about your role in what day-to-day looks like.

Graham Collins:

Yeah, absolutely. So my title is Head of Growth, which, as I alluded to, or you alluded to is kind of a Jack of all trades. I tell people that I do a job until we hire people who are better at it than I am, and then I let them take over. So currently I’m focusing on a bit of our marketing stuff, so some content, some podcasts, and we just did a Revenue Collective webinar recently. And I also focus a bit on sales and customer support and account management, but a big thing that I’ve been focusing on recently, our compensation plan consultations that I’ve been doing with a bunch of folks from Revenue Collective. I think I’ve done probably about 50 at this point where I sit down and just do a deep dive into people’s compensation plans as they’re building new ones, as they’re reviewing their old compensation plans and quotas. And oftentimes, especially for VPs of sales, they don’t really have anybody to bounce those ideas off of. And so that’s one of the things that I’m really passionate about right now.

Kacie Lett Gordon:

I can appreciate that so much. I, in a past life, ran a sales organization, and I think that was one of the most challenging pieces, especially as the organization grows because what might’ve been a comp plan for a few people as you scale might need to look differently, different needs of the organization. And so I think to be able to not just have a platform like QuotaPath, but also the consultation and that human element to talk through it, I think is pretty powerful. So when you say that you’re passionate about it, usually passion comes from some experience. Tell me, tell me maybe what was either good or bad about some comp plans in your past and what drove you to actually make this a passion of yours?

Graham Collins:

Yeah, absolutely. So, in my previous role, I worked at a company in Austin called TrendKite where we were a PR and communications analytics platform that allowed brands to track where they’re being talked about in the news and what kind of impact that was having on their revenue. So that was what we did and I ran the SDR team there. But prior to that, I worked in sales management and have always been on the sales side of things. And I’ve seen a lot of comp plans. I’ve built a lot of comp plans and I’ve built some pretty terrible comp plans.

Kacie Lett Gordon:

I appreciate that vulnerability.

Graham Collins:

It allows me to tell people what not to do. So you said it at the top, there: compensation is the major reason that salespeople do what they do a lot of the time. It’s to, to earn money, but it’s one of the most misunderstood and, and poorly executed functions of their job. It’s almost an afterthought for a lot of people. We spend all of this time on positioning and marketing and prospecting and cold calling. And once you finally get to the end result, oftentimes people don’t know how much they’re going to get paid on deals. And so I that’s ties in with my role currently at QuotaPath, but, it’s been a long journey to get there.

Kacie Lett Gordon:

Yeah, I think that is so powerful. And I really, I mean, I felt it maybe anecdotally, but I don’t know that I’ve had it crystallized just like you said, because the sales cycle oftentimes becomes the focus and the end state is what you hope you get to. And then the compensation comes there, but there’s not a lot of time. And even in negotiations early stage because a lot of times, especially a lot of our members are early-stage companies or growth-stage companies that sometimes you’re being offered roles where it says, you know, here’s the starting place, but we’ll figure it out as we get in. And I think that gray area can be so confusing. And so I would love for us to take this conversation a bit from both, you know, SDR, the actual reps who are maybe informing this and what they should be thinking about as well as the people who are responsible for creating these at organizations similar to roles that you’ve had in the past, where you’re leading teams having to develop these. So, let’s maybe start with, let’s start with the leaders of groups and let’s talk a bit about maybe some of the pains. We’ll get people, some like virtual head nodding as they’re driving in their car right now. Like yes, that is my pain. And then we’ll talk about some of the actual reps and things they can think about.

Graham Collins:

Yeah, certainly.

Kacie Lett Gordon:

Excellent. All right. So talk to me about, like, where do you start with an organization when it comes with let’s design a comp plan, right. I’m building out a sales organization or maybe I had one, but I’m revising this. What is the starting place?

Graham Collins:

Yeah, so really the starting place that, that I always ask is what do we want to, what do we want to get out of our compensation plan? Oftentimes the answer is “sales” and that’s fine. That’s great. Okay. Wonderful.

Kacie Lett Gordon:

Do we meet retention? Logos? Like what, what do those mean in “sales”?

Graham Collins:

Yep, exactly. And that’s the follow-up question is “what does that mean?” Does that mean revenue? Does it mean ARR? Does it mean total contract value? Does it just mean logos? Oftentimes, with small organizations, the average contract value, the revenue doesn’t matter nearly as much. It’s the new logos because they’re raising around and they want to have all of these fancy logos on their pitch deck. So that’s really, the question is to say like, where do you want to get, do you want, do you want to do revenue? Do you want to do ARR? Is it recurring revenue?

Kacie Lett Gordon:

Do you find that most people know that answer?

Graham Collins:

For the most part. They know it, but they haven’t really like thought about it a ton. They haven’t really been, they haven’t really asked that question of themselves. They just, they think in their head sales, you know, we want to generate revenue. And then when I say, okay is it long-term revenue? Is it short-term revenue? Is it upfront revenue? And so once we define that, that’s when we can dive a little bit deeper into how to compensate your reps accordingly.

Kacie Lett Gordon:

Yeah. And when I think about QuotaPath, we’ll talk about that because that’s, you know, that’s the world you’re living in right now, who is a good customer for you all. What are the kinds of companies that you’re working with? And, um, you know, is there a sweet spot that you all play?

Graham Collins:

Yeah, for sure. So it may just be because this is my background, but where we’ve seen the most success is in those high growth, high tech startups, they don’t necessarily have to fit that. We have some of my favorite clients are our solar panel sales companies, but a lot of the high growth, high tech people who are adding sales reps, people who are trying to standardize their compensation, make sure that they’re competing, especially if you’re in a competitive market like Atlanta, or like in Austin, you have to make sure that you’re competitive, but fair and make sure that the sales make sense for the company and the reps.

Kacie Lett Gordon:

I’m curious when we think about structuring a plan, I think that comp can certainly, I think many people get into sales for the earning potential, right. And the motivation around that I have found, and maybe you can correct me or validate here, but I have found that money or compensation can mean different things to, it can mean value of an employee. It can mean that I am wanting to be retained. It could be the winning aspect of it. Right? I like to have incentives that I’m going after. Are there certain aspects that you look at as like an individual level of SDRs or what a team is comprised of when you’re thinking about comp?

Graham Collins:

Yeah. So when thinking about the motivation of salespeople, whether it’s SDRs or AEs, even VPs of Sales, I look at kind of a matrix of motivation and you have public versus private and money, cash versus pride. And so you have these, these four quadrants that people generally fall into.

Kacie Lett Gordon:

So you have money versus pride and then public versus private. So public recognition versus private, maybe compensation or giveaways or attagirls kind of thing.

Kacie Lett Gordon:

Yeah! So public money is kind of the easiest example. It’s the person who drives the fast car and wears the fancy watches and, and wants everybody to see all of the money that they make. And that’s a really big driver for some salespeople and kind of the, you know, the hackneyed view of a salesperson is like. And then you have the private money people who are actually a really good portion of salespeople and some of the best salespeople. They’re the people who want to have a nice house who want to have nice things who don’t care how flashy it is. They just want to drive a nice, reliable car because it’s good for them. And it may be more expensive. And then you have the public people who are the ones who smile as they’re ringing the gong or love when they get shout outs publicly. And the private pride people are the ones who, who hold themselves accountable, who hit their quota every month because that’s their job. And they want to, you know, they, they feel good about themselves when they do that. So there are all different ways of motivating and, and compensating those people as well.

Kacie Lett Gordon:

Do you recommend, we’ll stick with the high growth tech-oriented companies, because to your point that that’s where you all see at least a good portion of your customers. Do you see that a company should have a singular comp plan or should it be determined and vary based on what the individual reps might need? And I think that’s, my hypothesis is if you were managing 45 people as you did in your last gig, that might be really challenging. And so I’m curious how you get enough structure, that it makes sense for a company, but enough flexibility that individuals feel seen and appreciated and, you know, catered to.

Graham Collins:

Yeah, for sure. So I’m a big proponent of standardized compensation plans across the board. It can be for a specific role. So you have a junior SDR, senior SDR, junior AE, senior AE, but everybody who has the same title has the same base salary has the same exact compensation plan. I’m a big fan of this for a bunch of reasons, transparency for consistency. So, you know what you could earn when you move into the next role and why you would do that. But the major one for me is, is that if you have different plans for different people in general, now I’m not accusing anybody of doing this intentionally, but you end up underpaying, specifically women and people of color. And so there’s a bunch of studies about that. I encourage everybody to take a look at their compensation plans. If they’re not standardized, ask yourself why. And oftentimes it’s, Oh, they negotiated this base salary. And then they care more about this than that. And that may be the case, but take a look at it and, and understand that you may be underpaying specific people.

Kacie Lett Gordon:

I love that perspective, honestly, and I’m a woman in business and hadn’t really thought about it in that sense of the benefit of standardization. It creates a culture in which there are clear paths for individuals. They can opt-in. If that’s motivating to them, I assume into a company or culture. And then I imagine it’s a lot less headache for the manager, right? Like you, you’re not having to worry about these nuances. It’s pretty straightforward. Do you ever find that there’s pushback within negotiations to say that this is like our standard model across all employees? Like, is that ever a deterrent?

Graham Collins:

Yeah, it is. It absolutely is. And when I joined TrendKite I was the second sales hire and the 10th employee at TrendKite and ended up growing the team. We had 250 employees before an acquisition a couple of years ago for $225 million. And so we had the standardized plans the entire time. When I joined as the second sales hire, I was trying to negotiate more and they were like, no, we have a standard compensation plan. Even though I was the second person. So I think just laying that out as a standard from the beginning and having a good explanation behind it, it’s not because we don’t want to pay you more. It’s because of those things that I mentioned, transparency, a clear career trajectory, you want to earn more, okay, come in, kill it for three months, you’ll get promoted to a senior AE and you’ll make even more than what you were trying to negotiate.

Kacie Lett Gordon:

I love that. That to me is so powerful. And especially as we see it necessary, but the increasing conversation around inequalities, to be able to have this as something that’s very tangible for people to do to review your compensation plans and to set forth something that says we’re creating equal playing field, everyone is going to have the same earning potential to start at performance. Then it’s going to drive how people are earning. I think that’s fascinating.

Graham Collins:

I have seen actually an interesting model as well. A couple of organizations I’ve seen have an interesting model where you can, it’s not a negotiation, but you get to choose your base salary and your base salary in software specifically, there’s kind of this rule of thumb of, of a five-x on target earnings to quota. So if you’re making a hundred thousand dollars per year, your five-x would be, you’d have a $500,000 a year quota, and that would be it. Then that’s on a 50/50 base and commission split. So I have seen a couple of models where it says like, you can take whatever base salary you want. You can have a hundred thousand dollars base salary, which means you have a hundred thousand dollars of commission potential, but your quota is a million dollars as opposed to taking half a value of half of the quota. And so I have seen that model before, which is interesting. It allows somebody to kind of choose their own destiny. I haven’t done any research as to whether that does away with or encourages pay inequality. So I’m not going to blanket approve that or support that. But it is something to investigate.

Kacie Lett Gordon:

I do like at least the optionality of that and making it around expectation. It’s not around candidates, willingness, or likelihood to negotiate. It’s based on their ability to contribute to the organization’s goals. And so I think that to your point, we won’t make any blanket statements here, but I love hearing the variability. And I really like it. It makes sense, but it’s a math equation that we’re putting forth here and an individual can then opt in to say, do they feel capable of contributing to that math

Graham Collins:

Yeah, exactly.

Kacie Lett Gordon:

Do you find, as you go into organizations, let’s say retroactively, like, right? It’s one thing to come in at the beginning and help somebody set it up because there’s not the baggage that comes with it, but you come into an organization that maybe has their handful of employees that are all over the board, as far as comp plans, I imagine it’s emotional to try to inflict change. Change is never easy. So how do you all see that done and just QuotaPath help with any of that? I’m curious from like, I think it’s your observations, but then also just the business that you’re in, are there certain things that you guys are solving for with those things with that?

Graham Collins:

Yeah, absolutely. I mean within the QuotaPath app, you can create different plans, different comp plans, assign them out to specific people. If you have those unicorn plans, or if everybody has a different plan, you can assign those out to specific people with that said again, there are instances where everybody has a slightly different plan makes sense for account managers. They’re not all going to have the exact same book of business, or it may be different quarter by quarter. And so there, there are instances where everybody may have to have a slightly different, different quota. And so those are, you know, again, something that can be handled within QuotaPath, but the actual change management is difficult going in from I’ve seen instances of organizations where one person is earning a 25% commission on all of the deals they close. And one person is earning a 6% commission on all the deals they close and one person is going to be upset and the other person is likely to be happy unless you just lower them all down to that 6%. So it can be a very painful process for sure.

Kacie Lett Gordon:

Is there a certain point in a company’s growth outside of, at the beginning, do it right. But is there a certain point in which you see that most organizations are finding that have to adjust or is there no one specific recipe?

Graham Collins:

Yeah, I mean, part of it is, is as soon as whoever runs, your compensation starts complaining enough about it. Because having to do 25 or 30 different compensation plans, you know, different commission rates is okay, but oftentimes I’ll see situations where somebody gets paid on the number of logos they close and somebody gets paid on the amount of revenue and one person gets paid on ARR. The other person gets paid on MRR. And so the standardization tends to be required at least to an extent at a certain point. And, and it seems to be kind of the same stage where you break off into two teams, two sales teams, which is going to be your, like, you know, once you get past 10 salespeople year, you’re likely to have to two separate sales teams. And that’s around the time when standardization makes more.

Kacie Lett Gordon:

Yeah, that’s fascinating to me. And I’m curious to hear the response from our audience because this to me is so timely, especially as people are filling in if they work on a calendar year going into Q4 fiscal planning for the next year and how they start to look at this. So we’ve talked a bit about the organization and the leaders of teams, how they set this forth. I’m curious what resources or maybe QuotaPath has, or that you’ve seen that the actual individual contributors might drive around comp conversations or comp plans and, and how they should be looking at this.

Graham Collins:

Yeah, for sure. It’s fascinating. The number of times I have conversations with individual contributors or just sales or sales reps who don’t really understand their compensation. They don’t understand their comp plan. They know that they get paid a certain amount, but it’s so confusing or it’s so complex that they don’t, they don’t really get it. I know that if I close a deal, I earn about 8% on it. Unless it’s a two-year deal and then I earn more, but I don’t really understand exactly how much. And so that transparency is very, or the lack of transparency can be very de-motivating for reps. And so I understand if you’re listening to this and you say, yeah, I don’t understand how I get paid. Let me know. I always tell people, you can go to meetwithgraham.com. There’s my calendar. I look at comp plans and dissect them and understand them every day. And we have a free version of QuotaPath that allows reps to go in, enter their comp plans and track their sales, even integrate with Salesforce or CRMs and track their sales and their commission accordingly. I, as an individual contributor, had an Excel document. I still have it, it’s been turned into a Google doc.

Graham Collins:

That’s what a lot of, I call myself and others like me, sales nerds. That’s what a lot of sales nerds end up with is this, this Excel document that they’re using to track their own sales, their own commission, and hope that their organizations doing the same. So that’s one of the things that we’re looking to do at QuotaPath is provide that transparency across all people. So not just the director of sales ops, who does all of this, this calculating, but each individual rep as well. So encourage your sales ops person to check out a tool like QuotaPath.

Kacie Lett Gordon:

Yeah. QuotaPath. I mean, I think that that gives the transparency, but say somebody who’s not to the point yet, or they’re not using their tool like that in organizations, who do you find, or where should the responsibility lie on the SDR? Is it on the team lead? Is it on the organization as a whole to report out what earnings should be?

Graham Collins:

Yeah. I mean, I think that each person is in control of their own earnings. Obviously, the organization should get it right, but I would recommend everybody know exactly how much they get paid and ensure that it’s correct, because if I had to ask your listeners, how many of them have had an incorrect commission check? I guarantee that almost everybody is nodding along right now. I certainly have a few times.

Kacie Lett Gordon:

Yeah, same here. And I think that the one thing that I personally am very fascinated with in QuotaPath or any tool, and that is helping with this is the transparency across the board. I can’t tell you how many hours of my time as a salesperson has been spent in that Excel sheet and organizing it, emails back and forth meetings, you know, layout things, negotiations. It is at least a week’s worth of time annually, if not more, that is spent figuring out the comp model versus doing the job that would help me get where I want to be. And so, as I’m thinking about this, of just efficiency of scale and, and transparency and all the benefits that come with that, how that affects an organization, especially those that are high growth to focus on what they should be focusing on rather than some of the backend nuance.

Graham Collins:

Oh yeah. No, it sucks. It sucks doing commission. I’ve done it for teams. I’ve done it for myself. And a lot of that also starts at the top. It starts at the VP level of somebody building the compensation plan, making sure that it is easy enough to understand and not overly complex. I always, in my compensation consult calls with people, I’ll often just say like, no simplify. They’ll be like, “Well, okay. So we need to compensate on the number of years that they closed the deal for and when they pay it. And how many, see…” Nope, simplify it, simplify it, simplify it. Like I know that QuotaPath allows you to automate all that stuff, but your reps should still have a pretty good understanding of how much they’re going to get paid on a deal, even without software.

Kacie Lett Gordon:

I love that. And when we think about the motivation of reps, like it gets so complicated at times, I could imagine it’s very, de-motivating, it’s almost, it’s not worth the headache, even if there’s earning potential there, it’s not worth the headache for me to spend time here. So outside of comp plans, we talked about the public-private, we talked about some of the cash versus pride. Are there any other components that you think about when it comes to motivation and specifically in a team? I think about a team of 45. I don’t mind the largest team I’ve ever worked in is a team of five small professional services. So 45 member team blows my mind, especially from a sales perspective. So I’m curious of what are some of the ways that you see comp plan or not that you’re keeping teams motivated and excited and, you know, driving towards the goal?

Graham Collins:

Yeah, certainly. And trust me, I could not have run a 45 person team without a set of wonderful managers. I worked with a bunch of wonderful managers throughout that time. So don’t think that I was doing it alone. I always tell people I’m a mediocre SDR. I’m a pretty good SDR leader and I understand the math and whatnot behind it but get me on a cold call. And I’m actually just like, just, okay. So, um, but when it comes to motivating those people really the money is there for everyone, but you have to drill down and understand each individual person and what, what they really care about. Yes, the public and private, the money versus pride, but sitting down and understanding each person. And so at the beginning of every month, I would sit down with each one of my SDRs, which again was a bit of a chore every month dedicated, pretty much a half a week to it. And we’d set goals. Because we had such a quick career track at TrendKite as well. Like, what are you hoping to do? Or you don’t want to be an SDR forever. That job sucks.

Kacie Lett Gordon:

Let’s just call it what it is

Graham Collins:

It’s all the hunting without getting to getting to experience the kill. So everybody does the SDR job, everybody with an asterisk there does the SDR job because they want to move into a closing role. And so I would sit down with them and say, okay, let’s set goals to get you to that next role. And to get to the next role, it really accomplishes both, both the money side and the pride side, because say you got a promotion, it always feels awesome to get a promotion. So I would sit down with them, set these goals, and then translate them into actual outcomes. And so for my SDRs, their quota was centered around two things centered around sales accepted opportunities and revenue. And so I would say, okay, where are we good? Where are we bad? What, where, where did you struggle? How can we use your skills, use where you do really well? Okay. Maybe you’re really, really good at setting demos, but you’re not very good at having those demos show up. And that’s where you fall flat. So how can we use your demo setting skills to help improve your demo, show skills and break that down and, and help them really look toward the future for themselves.

Kacie Lett Gordon:

I love that. I like the thought around breaking down the sales processes, where do you win and how do you use your areas you win to help with the areas where you have a deficit. And I don’t know that everyone thinks of it that way. I think that, and that’s a really good framing, in my opinion, as somebody that’s led teams to help somebody make a tangible event, it’s not just go fix this one thing. It’s how do we innately lean into the things you’re excellent at to help overcome that deficit? That’s great. All right. Let’s talk about sales trajectory, career trajectory, SDR. We talked about that. And what should it look like? You know, I know you, you mentioned that SDR, like that’s not anybody’s dream gig, it’s where you start, but maybe we can shine a little light and I’m sure it varies by organization, but what does the path look like? And maybe what does the compensation plan path look like if we could get into some of that?

Graham Collins:

Certainly. So I would lay out the compensation or not compensation, Well, we, we would lay that out as well, but I would lay out the career path for SDRs during the first interview. Well, the first time I interviewed them, which is after the phone screen, and then I would interview them. And so I would lay that out for them from the very beginning. And I think that was one of the major reasons. We were able to hire such high talent in Austin, on the SDR team. And we look around some of the top sellers in Austin came up through the SDR organization at TrendKite. And so I would lay that out from the very beginning. And for us, it was very clearly defined. You start in this role after a certain number of months, we expect you to get to this role, but it’s not just like a, you know, after four months you were promoted, these are the clearly defined goals.

Graham Collins:

And I think that’s a major component as well because oftentimes people who are a “culture fit” get promoted ahead of the people who are maybe just very good at their job but don’t fit the mold of what you’d expect of somebody. And so we have these very clearly laid out goals for you to go from an SDR to a senior SDR that on average takes about four months or five months. I can’t remember at this point, it’s a few years ago, the fastest you could do it is three months because you have to hit three quotas in a row. And then in order to move from a senior SDR to a junior AE, you have to do these five things. And one of them is to learn how to demo the product. And so part of the career pathing is adding certain skills that you’ll need in order to be successful in the next role and possibly dropping skills. So at that TrendKite, we had a prospecting specialist role, but then would turn into an SDR and then a senior SDR. And by the time you hit the senior SDR role, you weren’t expected to do any prospecting because that was being fed to you by the prospect and team, but it still helped build your skillset.

Kacie Lett Gordon:

And it gave you extreme empathy. I’m sure for the people who were still in those roles and understanding the work they’re doing like I really liked that a lot. I’m curious at TrendKite and I’m sure this was the case, but I imagine you had to hire, you know, people not necessarily being homegrown from all of those roles, you had to hire somebody to an AE role net new. And so in bringing them in, how do you, how did you approach that? Or were there any specific things that you might’ve done around onboarding them? Because somebody that maybe started as a prospecting specialist that got to AE, they have a very specific understanding of, to your point, your culture, how you guys train. Was there anything specific that you all do when you interject somebody mid trajectory?

Graham Collins:

Yeah, we, we tried not to, we tried to hire entirely internally, but that can be tough because you have to, it’s just like any deal cycle. You have to insert a lot of stuff at the top of the funnel in order to get it down to the bottom of the funnel. I can think of, I think I know of one person, a guy named Cam Smith, who’s still at TrendKite was acquired by Cision. So he’s, I think he’s still at Cision and he was one of our very first prospecting specialists became an inbound SDR, outbound, senior. Now he’s moved all the way up the chain in the account executive line. And so, but for the most part, we did have to hire those external folks. And so we tried to do kind of a crash course in all of those roles, in the prospecting role, in the SDR role and the demoing role, it took a while. It took a while for them to be fully ramped. It might have taken six months for somebody to be a fully ramped AE that was hired externally. Whereas it would only take two months for an SDR who came in to come in and become fully ramped. So one of the major reasons we tried to avoid it, but yeah, we did like a crash course. I think the first two months, two or three months, they were effectively SDRs. And instead of it taking a year to get there, it took them two months.

Kacie Lett Gordon:

Yeah. I’m fascinated. Just personally, you said you were the second salesperson and the 10th employee creating structure amidst a high growth environment can be very challenging. Right? You’re feeding the beast while also trying to build a foundation to bring in new members of the team and any tips and tricks of how you balance that? Because, I mean, I’m sure some of it right now, it sounds lovely. I’m sure there were trips and falls along the way, like right hindsight, you can always make it a better story, but I’m curious of just how you balance that about knowing that you wanted to have homegrown talent, for instance, that’s a pretty strong perspective and sounds like it served you all really well, knowing what the timelines were to step to the next thing and creating that structure. Was that your team, was it in partnership with HR? I’m just curious what that looks like.

Graham Collins:

Yeah. I mean, part of it was, was done kind of accidentally because of cost reasons. It’s a lot cheaper to hire somebody out of college and train them to be a seller than it is to hire a seller and have them you know, pay them a big base salary and have them closing deals. And so part of it was due to that being a scrappy startup, but some of it was intentional. We had come from actually most of the organization when I joined, had come from a competitor, a company called Meltwater that competed directly with TrendKite. And I came from a different competitor. I was working at NASDAQ at the time. And so we’d seen kind of in the industry, what was working and what had worked. And so we were able to build a team and build a structure based on what we had seen succeed in the past.

Graham Collins:

And then a lot of it was experimentation, a guy who was one of the very first employees as well, named K Fujita. He is one of the most brilliant experimental minds because he’s super creative, but he’s also organized enough to say like, okay, let’s look at this AB test and see, did the, did sending this type of email or this time of day produce better results or did it produce the same or worse results? But he’s able to come up with those ideas. So I would say that it’s a lot of just trial and error, but quickly iterating on it. And yeah, we had a lot of failures as well. We tried to do a pod structure where we’ve matched up two SDRs with AEs that failed pretty miserably for us. We tried a bunch of different things.

Kacie Lett Gordon:

Yeah. I love hearing these stories. And especially when you were there from the beginning to the point that it scaled, I could probably sit here all day and jam with you on this. And given that we have people for their half-hour here, we’ll jump right back into our topics. So Graham, if you’re talking to our audience, think about the members of Revenue Collective, or other sales leaders that maybe aren’t members that are listening to this, going into Q4, looking at Q1 next year, what are some very tangible things you might suggest that they do when it comes to planning comp?

Graham Collins:

Yeah, for sure, take a look at your comp plan and try to remove half of the different components. We call them paths, the different way that you get paid, try to remove half of them. And I’m only half kidding there. Most of the time when I talk to people, there are four or five different components to the ways that people get paid, and that can provide confusion and sometimes can provide the opposite of what you’re hoping for. People try to game comp plans and sometimes they misunderstand. And if they misunderstand, it means that they are doing the exact opposite of what you want. I’ve talked to an organization where they said, “once we rolled out QuotaPath, people started closing two-year deals!” And I said, well, yeah you’re paying them more than twice as much for them.

Graham Collins:

And they were like, yeah, but they didn’t understand that. And so now they’re closing two-year deals and I’m like, why didn’t you explain it better? And so try to cut back as many of the different components of the comp plan that you can and make sure that everybody understands the comp plans. So often, they’re not understood. Even if you feel like you built it well, or if your finance person built it, make sure that it’s digestible. If it’s like trying to read the terms of service for iTunes then it’s not a good comp plan. It should be very simple and laid out very clearly for them.

Kacie Lett Gordon:

And so any general rule of thumbs, I know you mentioned, you know, for instance, like a five X earning that you should see and then a split between base and bonus or, you know, variable comp, any other baselines that you would tell individuals or sales leaders here to be thinking of?

Graham Collins:

Yeah. In about 75% of my comp plan consults, these two rules come up, which is number one, exactly what you said, take the on-target earnings, cut it in half. That’s your base salary. And the other half is your commission. Then take your on-target earnings, multiply it by five. That’s what the quota should be. Obviously, there are a lot of exceptions to that if they’re selling professional services or if they’re selling multi-year deals, but that’s a good starting point for you. The second one is on SDR compensation. There are two pure forms of SDR compensation. There is the pay them for every cold call they make or pay them for every dollar of the deal that gets closed. Anything that isn’t one of those two is not going to be an exact science. Not saying you should use those. In fact, paying everybody for every cold call they make isn’t right. And paying people for revenue they generate isn’t right, if you have a sales cycle, that’s more than a hundred days. But just trying to find the middle point there, where you have sort of an indicator or a litmus test of there is good revenue here. So if you aren’t going to compensate them on cold calls or revenue find a midpoint that is very, very clearly defined. What an opportunity is, what a demo is, what a qualified meeting is, and try to make it as fair as possible.

Kacie Lett Gordon:

I love this transparency, science. I heard you say making it an exact science, trying to make it an equation like, right. Let’s not, let’s remove emotion or this feels good. Let’s put it truly into what someone needs to contribute and then consistency across the board. Those are things I’ve taken out of this that I don’t know that I knew coming into it. So I’m grateful for the day, the time today, Graham and I have no doubt that our audience is going to be pumped together. These really tangible and actionable insights. So thank you.

Graham Collins:

Yeah, of course. Happy to join you today.

Kacie Lett Gordon:

Awesome. So last question for you. If people want to get in touch with you, you’ve said that you, you work with a lot of the Revenue Collective members or other folks out there, how should they?

Graham Collins:

If you are a Revenue Collective member it’s Graham Collins ATX on there. You can DM me or even in my bio, I have a link to my calendar. If you’re not a Revenue Collective member, I mentioned it earlier, but www.meetwithgraham.com is my Calendly as well. And so feel free to book some time there, or I’m also on LinkedIn. And it’s just https://www.linkedin.com/in/grahamcollins/

Kacie Lett Gordon:

You’re just searchable is what I’m hearing. You are well optimized for the engine.

Graham Collins:

There is a Canadian guy who owns GrahamCollins.com. If he’s listening to this, I would love to buy that from you. And then it’s just a bunch of Englishmen named Graham Collins. And then there’s me!

Kacie Lett Gordon:

It does ring very English. All right, Graham, this has been great. I am so glad that we had a member of our sponsor team QuotaPath, and we’ll see you again. Next time. Take care. This is Kacie Lett Gordon and I’m your host.

Kacie Lett Gordon:

That’s a wrap on another great Revenue Collective podcast. I am so grateful that Graham Collins chose to join us. You heard it from him directly. Go to meetwithgraham.com to find out more about him and find time to meet with him. This episode was brought to you by QuotaPath. QuotaPath is the first radically transparent end-to-end compensation solution from sales reps to finance get started for free at QuotaPath.com and your next commission cycle could be totally automated. I have to say, I wish I had known about QuotaPath in a past life because that sounds pretty darn good. All right. This is Kacie Lett Gordon, I’m your host and I’m grateful you tuned and see you next time.

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