Christopher Hellmann profile picture
Christopher Hellmann profile picture

Christopher Hellmann

Head of Growth at SmartWage

Hurdles as part of a commission structure.

Hey Sales Leaders.


I'm setting up a commission structure with our CEO and he is pushing for Hurdle rates of around 60+% of target/quota.


We're a start-up/scale up and our sales are still pretty up and down. I'm worried we have a down quarter and all our AEs get fed up, due to product development etc. being out of their control.


On the other hand, our CEO wants to use it to drive more consistency.


What are the average Hurdle rates you guys see/use?

Average Hurdle Rates as a Percentage of Target/Quote

Attached poll
6%
70%
2
16%
60%
5
26%
50%
8
10%
40%
3
42%
30% or less
13
💰 Compensation
🤷‍♂ Poll
🍾 Commission
15

18 comments

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oldcloser
Arsonist
10
💀
So, how does this work? I earn 60% of 100% of the 3% when I'm at 70% of quota? But when I get to 80%, I can earn 70% of the 3%?

I have a counter idea. Pay all of the salespeople 100% of their OTE until the product is developed. Hurdle the dev team. Pay them at 60% until the product is consistent.

Edit: The name of the company is SmartWage? This just became more amusing than infuriating.
CadenceCombat
Tycoon
4
Account Executive
😂 wish I could upvote this more than once.
jefe
Arsonist
3
🍁
Oh damn
braintank
Politicker
7
Enterprise Account Executive
I don't fuck with hurdles
CadenceCombat
Tycoon
4
Account Executive
First time hearing about hurdle rates.
CuriousFox
WR Officer
1
🦊
Yeah is odd
Fenderbaum
Politicker
4
Retired Choirboy🪕
Where's the 0% option?
oldcloser
Arsonist
2
💀
On the ‘22 Toyota Prius line, I’m pretty sure.
Revenue_Rambo
Politicker
4
Director, Revenue Enablement
Quota hurdles are for companies that see sales commission as a cost sink rather than an investment. Personally I’d avoid working for any company that utilize hurdles and/or caps.
FinanceEngineer
Politicker
2
Sr Director, sales and partnerships
I get paid on everything I close. If they don’t think I’m closing enough, they will fire me.
2
Head of Growth
Guys, thank you for the feedback - this is useful. Message loud and clear on hurdles.
Pachacuti
Politicker
2
They call me Daddy, Sales Daddy
Do you want to see your entire sales group quit the day after the commission plan is revealed?

Just comp them on what’s sold. Don’t make it complicated. Complicated comp plans usually mean the company is in financial trouble or they are going to screw the sales people.

Diablo
Politicker
2
Sr. AE
We get paid for what we close; commission % goes up based on quota attainment.
Justatitle
Big Shot
2
Account Executive
If a company ever presented me with a commission structure that had a cliff I would not accept the offer or leave. Unless there was proof that every AE was over the cliff and it was never an issue. Why are you disincentivizing people to sell?
oldcloser
Arsonist
1
💀
Because companies love to squeeze us when their product is incomplete and fits nowhere. Man
ThatNewAE
Big Shot
2
Account Executive - Mid enterprise
The word 'hurdle' in itself sounds very very wrong for an AE. I might not be putting all my trust on companies that have hurdles in quota achievement.

I might be outdated though - is this a new cliff that we have to climb up ? I know of accelerators, never heard of hurdles so far.
Maximas
Tycoon
1
Senior Sales Executive
Hurdle rates,that's pretty rare to apply I believe,but I would say 40%!
SaaSguy
Tycoon
1
Account Executive
Had one at my first job was dumb af. Pay people their OTE.

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