BillyBeane

Senior Account Executive

New tiered commission structure, fair or crap?

Hi all,

For a long time now our commission structure has been pretty straight forward. X% on every deal, with accelerator if you go over quota.

We're a start up with a rollercoaster of hitting and missing quotas.

Now, we will be paid lower % on your deals until you hit your quota (which of course has gone up almost 100% YoY).

In short looks like:

0-50% of quota: 4% commish

51-99% of quota: 8% commish

100-120% of quota: 10% commish

120%+: 12% commish

There are a couple other small 1 off accelerators

My opinion is this is crap. They're trying to incentivize overachievement (although accelerator is not very incentivizing), but the penalty for missing seems severe.

Personally, I've never seen this structure (been at 4 other companies in SaaS sales), but told it's common. Is it? Does anyone else have or know of this tiered structure?

Thanks in advance

💰 Compensation

🍾 Commission

11

22 comments

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saaskicker

Celebrated Contributor

7

Enterprise AE

this means that people were hitting OTE without hitting quota. they are weeding out under performers and penalizing them with this new structure, while in turn pissing off great reps. run a report in excel with this new structure and see how much you made last year vs how much if you closed the same this year and see what the delta is, take that to your manager and start bitching.

CuriousFox

WR Officer

3

🦊

Facts and data are on your side.

saaskicker

Celebrated Contributor

3

Enterprise AE

if the number comes out below what you made last year by a significant amount, share the spreadsheet with other top performers to run their numbers as well.

RealPatrickBateman

Politicker

3

🔪Amateur Butcher🔪

.

antiASKHOLE

Tycoon

2

Bravado's Resident Asshole

This is a great approach to check where you stand.

jefe

Arsonist

2

🍁

Really good approach/.
Unfortunately this is happening at a lot places.

BillyBeane

Contributor

0

Senior Account Executive

Thanks. Reps under quota were already not hitting OTE and most left or got fired already so at this point its just punishing the over performing reps and paying them less

saaskicker

Celebrated Contributor

0

Enterprise AE

did you run a side by side look at what you would have made closing the same amount of revenue last year?

SoccerandSales

Big Shot

3

Account Executive

What was old percentage?

Sunbunny31

Politicker

3

Sr Sales Executive 🐰

I'm curious about this too.

BillyBeane

Contributor

1

Senior Account Executive

Old % was 20% flat so this is a massive cut. Only silver lining is we introduced a new product that has increased our average deal size by about 4x however its still very much a work in progress

oldcloser

Arsonist

2

💀

Yeah, unfortunately this is now common. I’m on one just like it at the moment. The only helper is that I’m comped on recurring revenue forever, or until they change their mind on this too. Sorry to have to confirm this.

Diablo

Politicker

2

Sr. AE

In the same soup where it got revised, 100% crap but it is what it is.

lowhangersalesbanger

Executive

1

Director of Sales

They are trying to save money for when you come in at 98%. Fuck that noise

Justatitle

Big Shot

1

Account Executive

The ole' punishment plan, does the new plan have a higher incentive over quota than the old one? you don't have many options here. I wouldn't say it's crap, more challenging yes and annoying because change is annoying definitively yes. Companies do this constantly though.

BillyBeane

Contributor

1

Senior Account Executive

Old comp had MUCH higher accelerators. So theyve significantly lowered the ceiling while heavily punishing under performance

Justatitle

Big Shot

0

Account Executive

Then it’s crap. Sorry

CRAG112

Valued Contributor

0

Account Executive

Dats dat bullshit

CPTAmerica

Opinionated

0

President/CRO

This type of plan is very common. Not a fan of them but it is the norm at a lot of SaaS companies. Changing from a flat rate to this plan is pretty tough. I'd guess motivation is going to drop and you'll lose some reps. Would have been much easier if they had this plan in place before hiring their team.

Pachacuti

Politicker

0

They call me Daddy, Sales Daddy

Better than 0% commish for 0-50% of quota, which I have seen.

pirate

Big Shot

0

🦜☠️ Account Executive

Ehh never heard of this

whatbeclosing

Member

0

Account Executive

Mine has changed to something like this for the current FY.. hate it. My quota is $1.5m ARR, I’m on track to close $1.1m and making nothing compare to before.

Our first tier is 0-80%

If this doesn’t change for next FY (which starting in April) I’m going to start looking elsewhere…

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