Going from 50/50 to 80/20 in sales comp?

Fam,

I've been mulling something, would love your POV: What effect would it have on the sales profession if we started doing 80% base, 20% (+uncapped upside) commission for sellers and leadership?

Less stress? Better seller behavior? More trust with buyers?

OR

Less motivation? Fewer top producers? Lower revenue?

Educate me!
๐Ÿ’ฐ Compensation
25
antiASKHOLE
Arsonist
9
Account Executive
I think we had this discussion like last week @TennisandSaleshad posted this.

https://bravado.co/war-room/posts/ya-ll-surprised-me

It really went into what having a higher base would do with lifting the commission breath and decrease the quantity of poop deals just to break through for increased payment.
UserNotFound
Politicker
11
Account Executive
Did you justโ€ฆ โ€œuse the search barโ€ Sahil? ๐Ÿคฃ๐Ÿคฃ
antiASKHOLE
Arsonist
4
Account Executive
Passive Aggressively, maybe..
TennisandSales
Politicker
2
Enterprise Account Executive
๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚
Filth
Politicker
5
Live Filthy or Die Clean
^^ Yeah I already posted my thoughts there and used my brain up for the month.
Telehealth_2the_Moon
Notable Contributor
6
Director of Business Development
Daniel Pink has some good writing on moving away from commissions in sales. I'm not sure I agree with him but it's one of the best arguments I've seen for it. Here's the first example I found for it. https://hbr.org/2012/07/a-radical-prescription-for-sales

Part of me thinks of commissions in sales similar to contracts in the NFL. It's their way to say you'll be paid a lot without having to guarantee it and giving the employer a cheap way out. At the same time I love seeing the big checks come in after working on a large deal for a long time, it can be nice seeing a tangible result of the hard work.
1nbatopshotfan
Politicker
4
Senior Director, Enterprise Technology
I donโ€™t have data to back it up but I would assume you would be able to show better growth and bigger deals with a strategy like this. You take the immediate โ€œmust make a sale todayโ€ pressure off and let people work bigger deals. You would probably be able to recruit higher level talent this way as well. Also if the commission is uncapped it wouldnโ€™t affect motivation.

Just my assumptions.
TennisandSales
Politicker
4
Enterprise Account Executive
i would to talk about this more i have also been thinking about this for a while now. i have been on comp plans that are: (base/variable)
- 0/100%
- 40/60
- 50/50
- 100/0

in my experience, the less dependent on variable comp my plan was, the better my life has become.

thats what triggered the post that @antiASKHOLEshared.

I made two posts about it really

https://bravado.co/war-room/posts/what-would-it-take-for-you-to-take-a-non-commission-sales-role

https://bravado.co/war-room/posts/ya-ll-surprised-me

Lets talk more @sahil
SaaSam
Politicker
3
Account Executive
My gut tells me it'll create a clearer distinction between terrible employees and driven salesmen. The guys that are just looking for an easy paycheck will be easier to pick out a lot sooner.

It'll reduce the stress on driven salesmen, likely resulting in higher job satisfaction and employee retention. With folks that aren't so driven, it'll "give them enough rope to hang themselves."
CuriousFox
WR Officer
3
Senior Account Executive
Personally since I'm Enterprise I know it would make me feel less stress. I'm for it.
jefe
Arsonist
2
Head of Sales
I think that would be a healthy shift that wouldnโ€™t demotivate people, as long as itโ€™s uncapped.

I agree with others posting about the increase in ethical behaviour and decrease in desperation
Sunbunny31
Politicker
3
Sr Sales Executive
As with any sales plan, you need to think about the behavior you're trying to incent. I agree with you, jefe.
thestartupsaasfella
Personal Narrative
2
Vice President of Sales
That is typically more of a sales leader split vs an IC.
Pachacuti
Politicker
2
They call me Daddy, Sales Daddy
Usually you have an 80/20 with longer sales cycles
SalesMama
Opinionated
2
Senior Account Executive
I was previously in a role with the equivalent to 80/20 split and it was very hard to motivate myself and my teammates to hunt aggressively. I would say this sort of split only works if the company has traction and a good flow of inbound...
fidelcashflow
Opinionated
2
Account Executive
This is getting more common. Product led platforms all do this. It works out much better being on a team quota. There's only 1 #1 so it's funny when people complain and say that they don't believe in it since they won't be able to hit high numbers. But trust me, you are not that guy pal. I'd rather have no stress and be guaranteed $220k than go crazy working 60 hours a week to make $100k more. Companies like Monday.com have a 70/30 split and their sales culture is top notch and a douche bag free zone.
FinanceEngineer
Politicker
2
Channel Sales Director
Depends on how much you are making. If you are going from 150/300 to 240/300, then it might be worth it.
Gasty
WR Colonel
2
Community Manager [War Room]
Iโ€™ve seen slack being cut and motivation running out at 80/20. Iโ€™ve also seen high stress and commission-first-customer-second behaviour at 50-50.

My previous firm had it at 70/30 for every soul in the New Business revenue function. Havenโ€™t seen anything else work as good as that structure did.

Awesome balance of trustful selling behaviour and enough motivation to keep the ball rolling month-on-month.
revenuegenerator
Good Citizen
2
Sales Management
Option 2.

Not to mention, shorter runways for companies because their sales/marketing expenses will balloon since ~60% of reps hit quota (if we're being generous).
YoursTruly
Politicker
2
Account Executive (SaaS)
I would be more motivated and less stressed with a higher base and lower commission rate for sure.
robertsanfrancisco
2
Vice President Sales
I believe in Sales it's all about execution and that is why sales has the highest gross incomes.
Kosta_Konfucius
Politicker
1
Sales Rep
I also think the bigger % of base will lead to more ethical behavior. This could be doing less high pressure sales, as Josh Braun says having sales breathe, also there will be less fighting over deals when there is a dispute over territory.
AnchorPoint
Politicker
0
Business Coach
"Better seller behavior"??? Compensation corrects bad behavior? Sounds like weak management and culture.
5

SALES COMP PLAN

Question
5
3

Structuring your own/future sales savages comp plan?

Question
7
10

SALES MANAGER/DIRECTOR COMP!!!!

Discussion
10