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TechItEasy

Account Executive

Contributor
Good Citizen
Fire Starter

0% commission comp plans

Happy Friday fam,


As the title suggests I'd love to hear from anyone whose company has introduced a sales comp structure that's basically void of commission in lieu of 100% base (or at least moved somewhat away from the traditional 50/50 split or comp based solely on revenue through the door).


Specific questions are things like:

  • How have you found it?
  • What are the major changes you've found in how your company views/measures your day-to-day role?
  • What did your new base look like relative to previous hypothetical OTE?
  • Do any variable parts of compensation remain, if so, what do these look like? What are they measured against.
  • If you're a sales leader that has implemented this, how you thought about structuring the new plan.


Some context, my company is considering this at the moment, we're still quite small and I'm one of the salespeople so we have a lot of input into whether it's implemented or not and how.


Our fearless leader @sahil posted about this a few times on LinkedIn last year and it created a whole heap of discussions of pros and cons for and against – I'm hoping this post can focus more on the reality of what it might look like rather than why it's a good idea or not.


P.s. apologies if this topic has been discussed before, I tried to search but couldn't find anything this specific on the topic.


Cheers!

💰 Compensation
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33 comments

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FattySnacks
Politicker
13
Senior Account Executive
It’s a great way to never attract top sales talent
TechItEasy
Contributor
2
Account Executive
Curious what makes you say this? 
MSPSales
Politicker
6
Partner Development Manager
Top sales reps make a lot of money. This depends on the company. But let say your a top sales rep making over 200k OTE. Would a company offer a sales rep that salary? Unlikely. Also what motivates sales reps is that there isn't a ceiling to their earning potential. 
TechItEasy
Contributor
0
Account Executive
Yeah I totally get this and it's definitely an area I think most companies would struggle. I'm sure many execs without a sales background wouldn't/couldn't accurately value a top rep.

I think there would also be a disconnect between how the company values a rep and how the rep values themselves – most reps (myself included) probably think too much in earnings potential, even when the likelihood that I hit said potential could be tiny. Something along the lines of "If all my big deals fall this year, I'll clear 500k" knowing in the back of my head it's very unlikely that none of them fall through/go bust/die etc.
Simo
Politicker
1
Director of Sales
2nd @AllBiteNoBark 

Top sales talent will know they can get more elsewhere. Unless you are willing to pay them 300k+ base salary which we know won't happen

LordBusiness
Politicker
9
Chief Revenue Officer
At the end of the day, every employee at the company has "performance metrics" that they work to.  Operations, finance, legal, marketing - they may not have "commission" - but they all have performance metrics that they are being judged (and in some cases) compensated on.  At the end of the day, nothing will change.  You will call it "no commission" but reps will still have targets and goals, and when they don't hit them they will be let go.  What also will likely happen, is your team is going to be required to take on a shit ton of extra work to "tell the story" of what a "good performer" is (think performance management, more meetings, more surveys, more garbage).  In short, I think its a terrible idea. 
CuriousFox
WR Officer
5
🦊
This sounds like a nightmare 🤯
Incognito
WR Officer
2
Master of Disaster
Ugh. I can see the company revenue going down the toilet very quickly 
Diablo
Politicker
0
Sr. AE
Endorse this 
justatopproducer
Politicker
0
VP OF SALES -US
Agreed this almost happened and when they tried discussing with my self snd a few other top performers we asked if we could recieve triple our base a few days later.
TechItEasy
Contributor
0
Account Executive
I get this, I think it's part of the reason I find it difficult to picture what it looks like in practice.
No one I know works in an environment without fairly standard comp plans so I was hoping the WR might provide!
Incognito
WR Officer
6
Master of Disaster
I have this argument all the time about the people who are in charge of servicing client accounts. They are paid a salary, and it makes no difference to them whether the clients are retained or not. It absolutely makes a difference to sales and management, as sales gets commission on renewals and management gets bonuses based on overall revenue. 

Some of my clients are fucking assholes to deal with - but they pay a lot of money. I have no problems dealing with the attitude because of the level of compensation attached. Do you think service gives a fuck? No. They’d rather the client dies in a fire. All it does is increase their workload and stress levels. 

I would gladly give up a percentage of my renewal income to the team in charge of retention as an incentive. Virtually no one does this in the industry and everyone has trouble finding and keeping talent for this role.

My solution has been to discreetly hand them cash. Like at least $1000 per client. If I’m making $30k, it’s peanuts to me but the world to them. 
jefe
Arsonist
1
🍁
Solid tactic.
Kiona
Opinionated
0
Head of Business Development
100% take care of everyone who helps get that chedda - they will work extra hard for you and your accounts every time.

justatopproducer
Politicker
1
VP OF SALES -US
Hell no. Thats like being lebron james and getting paid the same as the kid that mops up sweat on the court so players don’t slip.
TechItEasy
Contributor
1
Account Executive
I don't think this would be the reality, unless a company is really stupid.
Top performers would demand a higher salary than mid-level to low performers.
Just because 2 people are on the same Base/OTE plan today, doesn't mean they'd get paid the same salary if one has consistently been crushing quota and the other hasn't (although this is me assuming how it would work in practice)
justatopproducer
Politicker
0
VP OF SALES -US
Exactly
Jerry_the_cheese
Valued Contributor
1
Sales Manager - Pharma
I'm on this with my current job, so yeah, I'm looking for a new job
TechItEasy
Contributor
0
Account Executive
Could you expand on the specifics of why you're looking?
Is it you're earning less than you were in previous roles? Miss the upside potential? 
How does your current salary compare to what your OTE was/would be?
Jerry_the_cheese
Valued Contributor
0
Sales Manager - Pharma
Essentially, there's no motivation to bring in new business, and if you put the effort to bring it in, you don't get paid any more for it... so then how do you increase your salary? wait for yearly pay rises - that doesn't take into account sales... yeah I'm quitting as soon as I find something new
Wildcard
Opinionated
1
Account Executive
Why is your company considering this? What goal are they looking to accomplish? What problem are they looking to fix?
Pachacuti
Politicker
1
They call me Daddy, Sales Daddy
Hard to make what you're worth.  And hard to be motivated to sell more than the the minimum needed to NOT get fired.
jefe
Arsonist
0
🍁
I think changing the split can work, but 0% removes the incentive to REALLY make it happen.

It also seems like the benefits would be very one-sided - you can guess which way that balance will go...
CaneWolf
Politicker
0
Call me what you want, just sign the damn contract
I work in a bonus based structure vs commission now so I see all of my results paid out at once. It's a long story why I took this job but it's worked out well for me and I've been well-compensated. That being said, salespeople, for the most part, are just wired differently. It is wild how differently I behave when I know I can just sleepwalk through a day and still be fine.
TechItEasy
Contributor
0
Account Executive
This is interesting. What % of your basic can you get as a bonus? How does your basic compare to when you were in commission roles?
CaneWolf
Politicker
1
Call me what you want, just sign the damn contract
50%. My base is also…not small.
ColdCallHotCoffee
Politicker
0
TSR
My first job out of college was a 0% commission sales role. Highly technical, lots of engineers turned sales reps kind of vibe. The company gave out bonuses annually to everybody, not just sales reps. Granted the bonus was very nice, it felt more like withheld salary.

I had virtually no incentive to be the best I could as a sales rep, and ultimately regret taking this job. The pay was decent, and only decent, out of school, but why I really regret it is because I developed bad habits. 

I went from this job to a new one where it is heavily commission based and I am developing a new territory. I'm constantly trying to kill bad habits and get my shit together and work hard. Didn't have to do shit except update my CRM at the old job.

I will also have to +1 the "its a great way to never attract top sales talent". The best ones leave for better. The middle of the pack tries too hard for what they are paid. The low performers love it because they ain't gotta do shitttt.
TheRealPezDog
Notable Contributor
0
Account Manager
Just my opinion here and keep in mind I am a full cycle AM.  I would absolutely switch to a base only comp plan, it would just have to be 150k or better.  I am also not motivated by money so I would continue to sell just fine and I would continue to progressively make more money for the company every single year. 
Kiona
Opinionated
0
Head of Business Development
Sales has a 50/50 split for a few reasons: 

1. It motivates sales to always be closing - they came for the OTE, not the salary

2. 100% salary sales people dont perform like athletes, they perform like fans. You have to work hard for good results. Hoping a deal will win requires nothing (fan). Working to win a deal requires EVERYTHING (athlete). Holding nothing back (superior athlete) Your reps will sit on their hands and not have anything motivating them to close. LJ doesn't go the extra mile for the fans (regardless of what he says) he goes the extra mile cause his contract has incentives (SPIFs)

3. Companies dont get stuck with people who googled how to sell and crushed the interview but dont have the discipline to perform day after day after day after day. Sales is a slog sometimes, and being disciplined is what separates the people who want to do sales from the people that sell! 
CRAG112
Valued Contributor
0
Account Executive
Your first point.....  Why not just make the base 100 instead of 50/50, throw in a nice, sweet bonus for the team making it's numbers, just like how managers and above receive. 

Sounds like problem solved.

50/50 base OTE is often just a load of BS designed to not pay you what you are worth under the guise you of needing to work hard to achieve the salary you should already be getting paid due to the work and effort required daily.
Kiona
Opinionated
0
Head of Business Development
Because there is no incentive for reps to work if all their money is guaranteed. This is an ops pay structure not a sales pay structure.
Kiona
Opinionated
0
Head of Business Development
And your salary should be enough to live on. Mine is 6 figures but I make double when I hit my number and triple when I hit my SPIFS
CRAG112
Valued Contributor
0
Account Executive
Here is a really good example thread of why instead of the 50/50 nonsense, just pay people 100. 

https://bravado.co/war-room/posts/comp-plan-nightmares

We all know this to be true. It's not even a nightmare, it's basic BS companies do.

Why constantly argue in favor of top performers or those who work super hard. It's just an argument that favors the company, not you.

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