SeattleSales profile picture
SeattleSales profile picture

SeattleSales

AE

Politicker
Opinionated
Fire Starter
+2

Are Commission cliffs normal in SaaS?

Hey Fam - I recently got an AE job offer where the commission pays out 4%.


But you don't make any commission till you hit 80% quota and then you then make 2% on everything you sell till 100%. Then once you hit 100% Quota you get the 4% retroactively on everything you sold.


Seems a little unfair to the rep to me - but wanted to check with you all.


Other details about the offer - OTE is 108K and the yearly quota is 1,200,000.


Would love your thoughts!

💰 Compensation
👥 Hiring
20

21 comment

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funcoupons
WR Officer
12
👑
Lol fuck that. Why would I work anywhere that has a setup like that when there are hundreds of places with better structures desperate for AEs right now? 

I don’t go into a role expecting to miss quota but why take any risk if you don’t have to, especially when that OTE isn’t even great. 
Upper_Class_SaaS
Politicker
0
Account Executive
Yea that doesn't seem right to me. I've been around for a min now and have never seen something this bad lol... Maybe its PAYCOM lol
poweredbycaffeine
WR Lieutenant
11
☕️
This was discussed a few weeks back. It sounds like this is the actual comp structure:

0-79%: 0% Commission
80-99%: 2% Commission
100% Cliff: 2X multiplier on all earned Commission up to 100% of goal.
101%+: 4% Commission.


This is a shit plan that is designed to make the company money and identify low performers that can be put on PIPs faster. This is not something I'd tolerate as a rep nor as a leader.

Edit: This also tells me that they have negative CAC up until they get you to earn them $960,000. That's also a red flag.
SeattleSales
Politicker
2
AE
Yep - that's exactly right. They have been trying to negotiate with me but I basically said I would need the entire comp plan changed for me.
poweredbycaffeine
WR Lieutenant
4
☕️
We have cliffs, but it's never 0%.
sketchysales
Politicker
7
Sales Manager
OTE isnt amazing considering its SaaS and the size of your quota.  Negotiate a better terms or forget it.
Sunbunny31
Politicker
6
Sr Sales Executive 🐰
This is a no.  Why would a company be unwilling to pay you on commission earned as you go?  Either they don't want to pay you, or they can't.  Either is a red flag.

braintank
Politicker
5
Enterprise Account Executive
Yeah I'd pass:
• Bad comp plan
• High quota relative to OTE
CuriousFox
WR Officer
5
🦊
Fuck that company. 
Rallier
Politicker
4
SDR Manager and Consultant
Yeah that's a pretty unusual structure. Everywhere is hiring now so I'd be on the lookout for something else
buckets1
Politicker
2
AE
OTE looks low in addition to the other issues. Read somewhere quota should be around 4-7x OTE. This is about 11. Hard pass on a job with a plan like that.
DungeonsNDemos
Big Shot
2
Rolling 20's all day
That's a no for me. I would not be ok with that. What if you sell $948,000 (79% quota) and fall short? 
You just brought close to a million dollars to your company in revenue and they didn't pay any commission.

I would not stay in that position. Too many companies who are treating sales people right to put up with this kind of stuff. 
SaaSguy
Tycoon
1
Account Executive
Just from the info provided I would never take this role.
desperado
Politicker
1
Head of Sales
We've got cliffs in ours, unfortunately, the CFO makes the comp plan (dumb) 

up to 50% is 0 commission.
FormerStartupJobHopper
Tycoon
1
AE
no chance. i don't even think it's worth much negotiation, or at least take a very firm stance. as you said in a comment "I appreciate the offer, but this is very different than something I could accept and would need to restructure the entire thing." Then the ball is in their court as to whether they were playing hardball or this is really how they run things. But I don't think I wanna work there at this point if I'm you.

And yeah that quota is high for that OTE
Diablo
Politicker
1
Sr. AE
Amazingly shitty structure. I would never get attracted to it.
countingmyinterest
Politicker
1
Account Executive
Oh fuck that, that's the company being cheap until you hit 80%. My gut instinct is not that many people hit quota and the company can save $ by not paying out commission. 
Brandonite
Good Citizen
1
Account Executive
Agree with everyone. Big red flag here!
SalesBeast
Politicker
0
Sales Director
No. That is one huge trap. They’re trying to make it impossible to make $$$
SaaSsy
Politicker
0
AE
I am floored by 2% - this is criminal. Get out now, tons of way better offers out there!
Hoopnip
Politicker
0
Commercial AE
Start applying to a new gig STAT.

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