Now, a lot of this drop was due to the fact that we lowered the bar when we added this wave of reps. So what happened? Revenue per lead fell by over 50% with the BigCo sales plan. Because especially in the early days - qualified leads are a gift. In the early days, every lead is precious. But it isn’t designed to maximize all the leads. The real uber-problem in a Traditional BigCo Sales Plan is designed to maximize absolute revenue across a large sales team. Doesn’t Maximize Revenue or Success Per Lead.And if I couldn’t get my arms around the plan … how could I champion it? I mean, remind me again, why would I do this for another 2%? And why are you adding decelerators that ‘punish’ activity that still adds ARR? I couldn’t understand it. Accelerators, decelerators, micro-incentives. I wanted them driving M6 Convertibles and shiny new S5s if they were killing it. I saw the mediocre ones making too much - but the good ones didn’t make enough. How can you spend any time on a $5,000 ACV customer if you only make $500? And, seriously, why would you even follow up with a smaller potential lead unless you were 90%+ sure it would close in 1-2 calls? A full demo? Sorry, I don’t have time, ma’am. ![]() The problem is if you only pay a rep 8-10% of a deal, and then the rep goes away the second the contact is EchoSigned … it’s too much of a sales factory. And if the quota is too hard to hit, and you don’t believe you can hit it … you don’t really try … If you’re mediocre and make a decent base, you just stay. Here were all the problems a Traditional Sales Comp plan created: But it turned out to be a dismal failure for us. This sounded OK - not great, but OK - to me. Which is certainly true once you get into the Fortune 500. An important one, but ultimately a cost of doing sales and business. In General, Sales is Seen as Cost-Center at Very Big Companies.If someone is doing too well … raise the bar. If they make too much, the quota was too low. Sense That Sales Reps Shouldn’t Make Too Much or Something is Wrong, and/or the Bar is Too Low.Can lead to quarter stuffing, quarter stretching, multi-year deals over quarterly ones, etc., etc. Lots of little programs to incentivize desired behavior. Lots of Accelerators and Decelerators.Most upsell handled by others in the org. Very little post-sale involvement with customer. Almost Complete Hand-off of Customers to “Others”: Customer Success, Account Manager, etc.This can be hard in the early, learning days of a SaaS start-up. You don’t make a lot on each deal, and with a high quota, it’s a big nut to hit. Often, 8-11% of the first-year ACV, sometimes less Commission that is a Relatively Low % of the Deal.Walk into work, you make $50-$100k, or whatever the guaranteed base is. Well, a typical BigCo Sales Comp Plan for an experienced inside sales rep works this way: Why? SaaS Enterprise Sales Compensation Plan It’s tested and proven.īut it didn’t work for me, for us. ![]() Once you are at $20 or $30m ARR or larger, or maybe, once you have 40-50 reps or more, and are adding another 40-50 or more a year … a Typical Bigger Company sales comp plan works well. ![]() My uber-learnings from that are that BigCo sales comps plans are great tools - once you are reasonably post-Scale. Then, as we first scaled up a sales team, we ended up literally copying Salesforce’s comp plan. Then at Adobe Sign / EchoSign, I had some good - and painful - learnings. But I did all the sales myself, and stupidly, had no sales comp plan at all. I sold $6m our first year (man, that sounds good looking back on it). In my first start-up, yes, I sold to the enterprise. I’m not ashamed to admit that when I set up our first SaaS sales comp plan, I had no idea what I was doing.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |