ReginaPhalange

Fire Starter

Contributor

FEELINGS- Your commission is annual (ARR) but the customer paid monthly (MRR) and if there is a churn in the next few months, the company will deduct by increasing your quota and taking the equivalent amount $$ from your quota in the next month.

Over the next few months you need to sell double to reach the target.

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DungeonsNDemos

Big Shot

Rolling 20's all day

I don't have experience with a commission structure like this, but if I was interviewing somewhere and this was explained to me as the commission structure, I would not take the job. Are you new in this role?

I know it's been discussed in other threads but by having annually paid out commission I'm missing out on (worst case) 11 months of interest I could have made putting that money in a low risk ETF or anything else on the stock market.

jefe

Arsonist

🍁

Annually paid out commission is BS, but I'm not sure if that's the case here..

Seems like it's paid out either monthly or quarterly, but that payout is calculated on ARR. If they churn then the commission paid on the months after cancelling is clawed back (or this weird quota adjustment equivalent).

I might be wrong, seems confusing TBH.

hh456

Celebrated Contributor

sales

I've worked a a company that did this, it wasn't too bad. I never had issues with clawback because I worked my ass off to keep my clients on platform.

But I did know some guys who had problems with this and they'd have so much commission pulled back that their commission checks were negative and they'd take it out of their base. It was rough on them.

justatopproducer

Politicker

VP OF SALES -US

Fug that

Diablo

Politicker

Sr. AE

Oh man, haven't come across this but I know few companies are doing like this --> If a sign-up is done for a year or so and payment flexibility is given (say monthly) and if in a few months customer don't want to continue, the paid amount is deducted from future commission (no amendments in quota).

RaymundoFlex

Opinionated

Don’t sell any more monthly deals is the take away. Wish I could help more on the current situation, that is a bummer. Curious why they don’t just not allow monthly instead of allowing it and then punishing reps when it goes south...

youKNOW

Politicker

Sales Manager

This sounds like indentured servitude. F*ck that.

CuriousFox

WR Officer

🦊

First thought? Fuck that noise. I'm not joining your company.

DancingJersey

Personal Narrative

Account Manager

second thought? fuck that noise even harder

Justatitle

Big Shot

Account Executive

First thought? I’m out. I’m not in charge of collection, I’m also not the one that agreed to allow for monthly billing that was ops decision. My job was to get them as a client and other departments are in charge of the rest. Basically fuck that noise

IYNFYL

Politicker

Enterprise SaaS AE

Hard pass on that job

SlinginSoftware

Politicker

Account Executive

After the deal closes, does the account stay with you? Or does it transfer to an AM team?

ThatNewAE

Big Shot

Account Executive - Mid enterprise

That's scary tbh. I know people who worked for a company with a similar org structure.
You can't wholly focus on new business when for a few months you also have to focus on who might churn. That's not optimised.

Usually it takes a village to maintain a customer relationship - CSM, SC and maybe some other roles like AM. Blaming an AE alone for a customer to churn sounds really scary.

Maximas

Tycoon

Senior Sales Executive

I'm not sure how the commish structure works but thanks for the heads up!!

CRAG112

Valued Contributor

Account Executive

That's called theft. The bullshit people do makes you wonder why people bother with sales.

Sounds like ADP or one of those other HR tech sales roles.

lajefa

Good Citizen

Enterprise Account Executive

I would never work for a company with a commission policy like that.

WillieTrombone

Executive

SMB AE

Clawbacks are brutal, at my last job AM was in the hands of god (our customer success team) and we weren't allowed to follow up with customers on paper but most of the senior AEs did to make sure their bigger sales didn't churn.

Commissions were monthly but ARR was introduced and closing methodology was changed increasing lead time from a day to a few weeks, and if customers broke MRR/ARR contracts post close AE's would have clawbacks if the commissions on those deals were paid out, NO ONE was happy about this, including the managers but no one had any say, a lot of people saw the writing on the wall and left.

If you're an AE no amount of work will keep you from churn if your AMs/Customer Service/Product are crap, you'll burn too much time keeping the accounts alive and you won't hit target, so if you can't fix those things I would keep yourself open to new opportunities.

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ReginaPhalange

FEELINGS- Your commission is annual (ARR) but the customer paid monthly (MRR) and if there is a churn in the next few months, the company will deduct by increasing your quota and taking the equivalent amount $$ from your quota in the next month.

17 comments

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