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Hello and welcome to Haverin About, a podcast hosted by myself, Bethany Miller-Urroz and

my dad, Stuart Miller.

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And let me tell you what we have been dealing with in our household, because it involves

your darling granddaughter.

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that darling star of stage, no.

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She's star of multiple stages.

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So she turned five last quarter and she went to the dentist for her five-year-old

appointment.

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She's gone every year since she got teeth and every year she asks, when am going to lose

my teeth?

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Which is an ironic thing to ask a dentist, but it's very important when you're two and

three and four and five.

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And finally this year, the dentist said, this is it, like that they're going to come, come

out soon.

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And so she was very excited.

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She has a lovely dentist.

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Kids dentists are the best.

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You get like prizes.

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There's Bluey on the ceiling.

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You can watch Bluey episodes while you're having your teeth checked out.

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so anyway, so she came out and was like, the tooth fairy is going to come, the tooth fairy

is going to come.

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And you know, I am not only a very good sales person.

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also very good mom.

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very quickly I was like, so what are your expectations for the tooth fairy?

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I was trying to think.

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I don't even remember what I got for the tooth fairy when I was a kid.

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Do you remember?

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Yeah.

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Yeah.

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It wasn't, it was fine.

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It was enough to go and buy a thing of sweets.

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So in those days.

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And so I start asking her and she's like,

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Well, Archie gets this and Charlotte gets this.

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And I asked my friend Elsa and she said that the tooth fairy forgot one time, but then she

got more money the next day.

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So I'm like, okay, she's done her market research.

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Great.

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She has some competitive benchmarking.

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She knows kind of what the going great is.

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And I said, well, you know, what are you supposed to do?

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And she said, well, I leave the tooth under the pillow and then I get money in the

morning.

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And I was like, okay, so you're expecting money.

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And she said, yeah, one of my friends gets crayons, but I want money.

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And I was like, good, that's, know your worth,

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she is her mother's daughter.

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Yes.

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And so I just loved it because she, had this whole conversation and she hasn't lost one

yet.

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It's, it's, uh, I'm sure it'll come soon, but she already knows kind of the benchmark to

her peers.

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What are her peers earning?

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She knows the payment expectation, you know, is this the next day?

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Cause it's got to be the next day.

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Otherwise you're expecting more.

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So, okay.

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She knows what her net payment is and.

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know and then she was talking about like the lore of the the tooth fairy and the story

behind it and so she really understands that there's value to this it's not just because

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apparently the tooth fairy doesn't want unhealthy teeth they only want healthy teeth which

i wasn't aware of i was like oh so you need to brush your teeth twice a

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she was like yes so i was like okay so there's some negotiation in here

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And so I just loved it because it ties in so nicely to the conversation that we had with

Chris Goff all around comp plans and salary expectations and payment terms.

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Here's this little five-year-old thinking about all of those things.

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Like what does she need to do in order to get paid?

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How much is she expecting to get paid?

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What are her friends getting paid?

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And it just ties in so nicely to the conversation that we had with Chris.

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So with that in mind, thank you for sharing that Bethany.

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I'm glad she's in your house and not in my house, because I'd be a sucker and I'm sure I

would overcompensate what she used to ask.

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I look, we still haven't confirmed a number because I was like, well, you know, we'll see.

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But I do know I need to keep some cash in the house pretty quickly.

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Well, with that in mind, gentle listeners and viewers, please enjoy this conversation that

we had with Chris Goff regarding sales compensation.

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Good morning Chris, how are you?

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Excellent.

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Excellent.

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How are you?

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Excellent.

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Well, Bethany and I are delighted to have you join us today.

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Thankfully, we both know you from a prior life.

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And so that makes this conversation a little bit easier to warm up.

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um But we wanted to invite you on because I think that coming to this point in the year

and we're releasing this broadcast just before Thanksgiving.

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Salespeople are either thinking about closing those fourth quarter deals and how are they

going to close out their previous compensation plan, or they're starting to think, and a

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lot of leaders are starting to think about what's the compensation structures they want to

have for the new fiscal year.

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And for many companies, that starts on January 1st.

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So they're starting that planning.

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And I know many of the sales compensation professionals at larger companies

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already thinking about that and trying to link it to, you know, companies' business plans.

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So I hope this is quite timely.

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And we thought that we would bring you on so that we can have that conversation.

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Bethany, before we ask Chris to introduce himself, are there particular things that you're

excited to be able to explore in our conversation today?

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Yeah, well, Chris, thank you so much for joining.

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I'm glad that you did.

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I feel like salespeople, we have a love hate relationship sometimes, you know, especially

when you're delivering the comp plan for the new year and everyone's like, hmm, what about

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this?

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What about that?

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What about these seven other different scenarios that are very unique to me in my

territory?

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So thank you for joining us.

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Hopefully indicates that we weren't too annoying when we all work together.

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Um, but no, I would love to just understand, you know, as salespeople, we have a general

understanding that the board or whoever owns the company sets a number that then gets

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trickled down, down, down, down, down into what is your particular quota for the year and

then how are you going to get paid out on that quota?

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So I know there's a lot of, obviously a lot of work.

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that goes into figuring out those numbers.

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So I'm looking forward to hearing just kind of the inside of you of how do these things

actually get decided and how, you know, I'm sure you've seen salespeople react in all

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sorts of different ways where it's like, why are they reacting like that?

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That was not the intended behavior, right?

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That we maybe expected.

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So I'm just looking forward to hearing your insight.

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It's always good to know how other people in a company think.

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And I think it's very important as a sales person or as a sales leader to really

understand and lean on those experts in your organization.

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So I am here to learn and absorb.

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So Chris, let's start with just a little bit about your background in terms of your

history, how you got into the compensation game.

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Because, you know, obviously we've known each other for quite a while.

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And so I know there's a good chunk of your history that has been involved in compensation.

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But, you know, how did you get there?

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And, you know, tell us a little bit about your experience along the way.

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Yeah, so I thought that I was going to go into public policy.

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And so I got a master's degree in economics and I went to go work for the state of North

Carolina and very quickly realized that it's not a place that I wanted to stay for very

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long.

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ah And I just happened upon this business analyst job at a very small company in health

care IT once upon a time.

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And what that meant was, was I was doing reporting and a various sort of data analysis

work for what, what was like going to become a sales operations group eventually.

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And, and like three months into the job, I didn't just have, you know, the, the review of

market data, the drawing of the territorial lines, the setting of the quota.

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I then picked up the comp plan work.

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And so I kind of like figured it out as I went along.

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uh I ended up setting quotas for that organization through many growth acquisition

integrations ah for well over a decade.

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So I think it was actually ended up being about 12 years before I moved into broad based

compensation where I learned the rest of comp.

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So like the rest of the story of the things and I just say more academic, more formal

aspects to understanding compensation, but you know, was able to speak and live in a sales

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ops world.

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Um, so because it just helped me understand enough of the business part that I think,

it's, I'd say sometimes I, I'm able to speak both HR and sales and that helps me kind of

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overcome a lot of the challenges because some of, some of the aspects is the sales comp is

a very, very interesting area because most, most every company has a part or piece that is

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done.

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in different departments.

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And so generally speaking, you have this mixed bag of players that are involved with,

whether that's a target setting, budget allocation, you have legal, you might have IT for

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data crediting, you'll have a commercial ops group potentially, or maybe not even have one

at all, but you'll have finance, and then you'll have HR, and then you'll have sales.

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And then it could be on and on and on, depending on the complexity of your organization,

right?

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Like all kinds of different people doing everything, which means that there's lots of

disparate decisions that go into that.

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So I've had the pleasure of sort of growing up and managing most all of it.

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And then also being involved with certain parts and pieces and looking at how things can

kind of like live in a bit of a symbiotic way where you don't have ownership.

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a lot of what I was able to.

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develop a little bit is being able to influence a bit more from the side.

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And I think really good sales comp professionals can do that because they realize that's

what's kind of required to get what they believe to be good decisions all the way through

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into the business.

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that's a lot of, yeah, go ahead.

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kind of interesting because, you know, just like a lot of areas of deep expertise do

become, you know, distinct professions.

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And I think sales compensation as a subset of sales operations is one of those roles that

in a lot of, you know, small to medium sized companies is somebody's left leg on a Friday

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afternoon.

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Whereas, you know, as the companies tend to grow, have bigger sales force, maybe diverse

sales force, then the need to manage that complexity increases.

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And I know you participate now in professional organizations that are basically for people

whose sales compensation is their job.

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Tell us a little bit about that community, you know, and when you tend to see them, you

know, sort of like appear in different sized organizations.

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Excellent question.

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So if I talk a little bit about sort of like how I got more involved, I'm a, I serve on a

faculty position.

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I actually teach a variable pay class for an organization called World at Work that does

certifications for total rewards broadly.

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they, sales comp happens to be one of those areas as well as uh broad based compensation.

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And I kind of really got more heavily involved in that during COVID, as well as sort of

building the

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than my personal brand and doing more like that content.

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In terms of when these jobs show up, is a lot like you said in the sales ops world that

even I would say nearly billion dollar companies have minimal sales comp expertise

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associated with them because you'll have someone who might be the person who's

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accountable for design, but they don't necessarily know what they're doing.

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just know, here's the comp plans we have, and we do a kind of check-in on an annual basis

to see if we want to change anything or not.

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And then finance will set the targets based on whatever the business is telling them to

do, not necessarily whether or not it's capable of being achieved, or it's productively

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meaningful, or anything like that.

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And then you'll have a generalist, sales leader, or CRO type of role.

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where that person may also only have expertise only to the point of the comp plan they

have from their prior company.

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Not necessarily is this good, does this make sense here, is it culturally appropriate, and

is it aligned strategically?

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Like, none of those things necessarily come to light unless you go and intentionally

review it on an annual basis.

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So, I mean, very large companies can have minimal to no

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I would say real attention to something that can have a significant impact to the

organization.

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Yeah, and I think for some of those larger companies, sorry, Bethany, I'll let you go in a

second.

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Some of those larger companies, and you know, what I've observed is they try to design a

vanilla comp plan when they've actually got very varied product oriented sales groups

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inside.

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And actually, the design of that comp plan may be great for a seven-figure target deal,

but actually for a five-figure target deal is completely inappropriate and doesn't

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actually align with the behavior that you're trying to get from the salespeople.

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So even within a single organization, I do think there's this kind of attempt to shoehorn

everything into one comp plan.

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when actually it ends up being neither fit for one or the other because it's a kind of

bastardized thing to try and solve for both.

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Is that something you've seen?

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absolutely.

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And then this is like a gradient of extremes where we have organizations who really only

want to have like one comp plan and everybody gets it, right?

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And then you have the every single person has an individual comp plan, an individual comp

plan.

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And neither one of those are good things.

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And so finding these somewhere on the spectrum of this is ideal.

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And what I sort of line up with is the job content.

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So it's a very HR answer here.

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But really, what are the underlying differentiations?

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These are daily responsibilities that are different from job to job.

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So if we have 15 jobs,

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uh Ideally, we don't have 15 comp plans, right?

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But probably you'd have different aspects of the coverage model that need to be positively

reinforced in a very particular way differently because execution looks differently based

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on the way you have a portfolio of offerings.

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Even if you sold the same thing, as soon as you sell it in different segments,

geographies, customers, you name it, right?

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Price points.

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subscription models, et cetera, et cetera, you're probably gonna have to have something

that's a little different, even if it's as simple as inside sales needs to be paid

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differently than field sales.

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And then we have all these kind of cuts, if you will, that should be something that is

incentivized differently.

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And it does go along with total target cash as well for the job, because not everyone

should be paid the same way either.

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100 % agree.

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I've been at a company before where they were like, don't share your comp plans because

they're all different.

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And then, you you do, you chat with your buddies and they've had with, yeah, everyone

talks, everyone compares.

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And then you look and you're like, yeah, you're getting 7 % for that.

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I'm getting 10%, but we do the same thing in the same territory.

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Okay.

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And then I've been on the flip where I've been paid the exact same amount.

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if I'm selling to a huge seven figure multi-year as the person selling new business tiny

clinics.

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And the only thing that's different is, know, their OTE is this and my OTE is this.

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And I remember even as a young sales professional being like, that doesn't feel like it

should happen.

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Like it's totally different selling strategies and efforts and.

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styles and so I feel very validated that you're saying that it should be different but not

so different that you know it feels like they just threw some numbers out and said well we

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like this person let's give them eight percent we kind of want think this person can sell

more of that

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And I've seen, and I have seen that before where I worked with one organization that was

so very focused on a quality, because it really wasn't equity.

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was equality amongst the sales population that they gave everybody the same comp plan.

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So same base, same variable, same commission rate to the point of it watering down

everything because they had different jobs.

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So it doesn't really make any sense because they're different.

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It's the one thing about like pay is that it's very rare that you'll ever come across two

people that are exactly the same.

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And so the very nature of that means that there's a need to reward for both their prior

efforts as well as the expectations of the work that they're going to be doing.

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These are two things that we account for when we structure compensation in some capacity,

which means we are

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allowing ourselves a reason for differentiation of pay.

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But there's got to be a reason for it, of course, right?

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It's just one of those things.

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An organization has to do its homework in order to justify differentiation.

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Yeah, it's interesting because, you know, oftentimes I used to, you know, when I was

coaching salespeople that worked for me, one of my favorite phrases to all of them was, if

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you don't know what to do on a given day in your job, read your comp plan.

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Because basically that is your set of instructions from the company.

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It defines your territory, defines what you'll get paid on.

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and so on and so forth.

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So I think, you know, I've always tried to argue that the compensation plan should, should

basically be your, your set of marching orders as to what the company is asking you to do.

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Now, sometimes that becomes challenging because that clarity isn't there or there is, you

know, conflicting information there.

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And I think that experienced sales professionals over time,

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developed this kind of sixth sense that when a comp plan is issued for a new fiscal

period, that they read through it and they start the, I call the reading the chickens

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entrails of the chicken.

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Cause the chicken is there, but they're like, okay, now I need to get into this a little

bit and start working out what is really to my advantage here and sorting through.

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to basically parse down what they think is actually very important.

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And I know just from being part of sales communities inside companies that oftentimes a

lot of the discussion between the individual contributors was, all right, what does this

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really mean?

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I know that they're promoting this product, but that's got a lead time of this, means

that's actually, I'm not gonna be able to achieve this wonderful

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you know, bonus that they're going to associate with that because the the sale cycle is

too long.

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And so therefore this comp plan is not going to be meaningful to this brand new product

that has come through because even if I start selling it now, it's probably not going to

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land for 18 months.

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So therefore I can kind of ignore that piece there.

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And I think that's part of what you're saying in terms of in the background.

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So as I and I'm going to

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Let Bethany approach this from the individual contributor perspective, looking at 2026

going forward.

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But for sales leaders who are the CRO and his team who might be advocating for various

adjustments to the compensation plan, as most sales leaders inevitably do to try and

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either retain their people or to support a particular product they think is important.

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What advice do you give to sales leaders as they're contemplating the new fiscal and how

they can try and influence the design of the comp plan for the coming year?

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I tend to be an advocate of making sure that you're doing your homework to start off with,

which in this case means if you have a particular opinion, let's validate that in some

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form or fashion before you take it to the next uh step.

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And so let's say it's a question of, I don't feel like my folks are as motivated as they

could be.

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great one, right?

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I think there's a lot of people that, there's also a lot of people who will say something

to the extent of the, I don't feel like, and we've lost a couple candidates, I'm not sure

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if we're competitive, right?

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Fair enough.

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So those are like two big ones that might come up every, you know, probably may never

stop, likely.

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But there's a little bit of like, okay, let's dig in on this, let's figure out what the

root cause is.

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Now ideally you have some help in the organization, I don't know, maybe you don't.

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But you wanna go and,

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find out.

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like from a competitive perspective, there are resources to go and investigate the total

target cash compensation side of a sales incentive plan.

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And if you're in tech sales, you should you should have heard of something called rep

view.com.

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As an example, now it's just one data source, but it is something that exists that people

know to go to if they're with their wanting

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a sort of point of comparison.

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There's also other, you know, like other things that just by scrolling through LinkedIn or

any of the job postings to kind of get an idea of the ranges of pay.

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Obviously there are some problems with that, as we all know, but there's also very, very,

one of the things I think that are underutilized is call some of your recruiter friends.

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Those people know what's going on at all damn times and they'll be able to speak to

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kind of what it is that those, you know, what is it that's going on?

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Now that's gonna give you like a comp, like maybe the skeleton, right?

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If you want the innards of that, you may wanna look at something, you know, like my book

or like my blog posts.

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Because if you don't wanna pay for my book, you can certainly go through and read the same

thing in so many of the blog posts that really just point out a specific issue related

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to...

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buy Chris's book

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Yeah, I mean, I'm biased.

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I think it's pretty good.

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I sell on Amazon.

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But for all intents and purposes, there's a couple of big things that will go along with

this, which is like payment timing, assessing the appropriateness of a quota.

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How has your coverage model evolved with changes in strategy?

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So we have a sort of internal conflict.

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And I think

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That's probably something we're going to talk a little bit more about in the next few

minutes.

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But there's some of these things that you're needing to make sure you go do, and so that

you can then bring it up to those other decision makers.

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Because every organization is different.

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Because it's always hard to know exactly who can move the organization.

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Sometimes it's finance.

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Sometimes it's just the CEO who just says, this is what I want, period.

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Sometimes sales actually has a seat at the table.

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Sometimes it's HR.

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You know, it all depends.

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But the idea there is that you show up with some of that homework being done so that it

makes it a lot easier for you to kind of make an argument.

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So that's kind of one thing that I would say that all sales leaders need to make sure that

they come equipped with that.

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Now, go ahead.

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an interesting thing about philosophy though.

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I'll speak to two examples that happened to be back to back in my career.

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So I was with one organization that had a culture of that the entire sales organization

was expected based on the revenue targets that were set to be able to achieve on average

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about 50 % of on target earnings.

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And obviously that was a variance across people who had just literally come in the door

and or just starting in their territory, all the way through to people who were multi-year

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achievement award winners, et cetera, et cetera, who were exceeding their quota.

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And I went from that where it was probably about a third of people hit quota and got some

kind of attainment.

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that, you know,

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attainments like President's Clubs and foreign invitations to Golden Circle or whatever

the branding is of your recognition awards inside some companies is an interesting badge

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of honor for a lot of individual contributors because they see that as a cap, like an

achievement cap for them.

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in addition to the cash going into the bank.

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that was one culture where it was about a third of the sales force qualified to be able to

get achievements of different levels.

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And I went to the next organization whereby for two years running, nobody made quota in

the entire sales organization because their culture was they set targets and the

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expectation

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was, yeah, if somebody makes it, then that's going to be extraordinary.

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And I found it very jarring to go from one environment that had a very clear view as to

trying to create uh an incentive culture and another one that just was, in my opinion,

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completely oblivious to that being maybe not the most motivating of environments.

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that you're looking for people with the same behavior.

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Yep, I'll and I think there's more than one way to approach the sort of design that comes

across in these in these worlds and one is an achievable quota with a lower target

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incentive and the other one is an unachievable quota with a unachievable target incentive

so you could have like a 10x quota and you could on paper

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make a ton of money and you may end up with the exact same amount of on-target earnings

delivered, right?

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So you could essentially have those same scenarios and be like, oh, I'm at 50 % of quota

and make the same amount of money for 120 % over here.

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But the problem is there's a psychological sort of side effect that we have with that

second one, like you said, that people learn to sort of cope with.

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the perception of mediocrity in that scenario, in that environment, then it's okay to

achieve what the organization has established because we pay very well for

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underperformance.

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And so there's a clear side effect that you can't unlearn the longer that person is there.

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And so they'll have really significant challenges, sort of,

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moving on to the next place, unless they have the remnants of the first one, if you will,

large enough to kind of like overshadow the, this doesn't seem right, as you said, doesn't

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feel right because it's a bad play if you really want to, if you really wanna behaviorally

reinforce the desired thing that you have a performance management mechanic of some

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capacity says,

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This is what we're willing to pay associated with this level of performance.

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And if no one ever achieves it, by the way, the median of quota attainment is, and it has

been like this for like 20 some odd years, is approximately 50 % of people.

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So when you ever have a scenario where you're not getting in that 50, 60 % of your people

achieving quota, then you are off from what everybody else is doing.

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It's okay to be different, but I don't think that's the brightest.

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approach to accomplish it.

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When I, and I once interviewed for a company that had like 15 salespeople and you know, I

got to the stage where it was like, okay, tell me about the comp and you know, how many

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percent, the normal interview question for salespeople, what percentage of your people

made quota last year?

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And they said, a hundred percent.

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I said, the whole sales team made their number and they said, yeah.

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And we have for six years straight.

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And I went, okay.

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And so I was like, well, what's, you know, could you send me the comp plan?

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And they said, we actually just hired a new CRO and he's rewriting the comp plan right

now.

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I was like, oh, none of you are going to make quota next year.

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And I I said, I was like, I bet you that a hundred percent, no change.

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And they're like, well, why, why would it change?

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And I'm like, because it's not good in a roundabout because the other thing as well in

that particular company, once you hit your hundred percent, it didn't get paid anything

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more.

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And I was like, no, no, thank you.

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So you're capped at 100%.

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do your reps do for the last like two, three months of the year?

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And they were like, they're still working.

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I was like, no, they ain't working.

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They're not working.

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But I mean, in a roundabout way, what a great ride for those five years.

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Yeah.

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They're sliding all of those deals are going over there.

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Bethany, I know you've got experience of this and, know, Chris, we've seen this over the

years is the impact of ramps and staircases when it comes to compensation.

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you know, and I'll let

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Bethany, you can talk about any experiences you've had with that in your compensation

experience.

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And then Chris, talk a little bit about the rationale and incentive and effect of using

those mechanisms.

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I think everybody is kind of used to the idea of if you exceed, well, I've seen it work

both ways with the exceeding quota is either it ratchets down.

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in terms of what happens because they actually don't want you to sell much more.

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then I've also worked in places whereby it actually has multipliers, it increases, it gets

faster because if you're doing well, they want you to keep doing well all the way through

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the end of the year.

342

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So I think that's the odd thing about sales compensation design is it's as much

philosophical as it is.

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economics but Bethany what do you what's your experience with ramps and stairs etc.

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Yeah, I mean, it's a blessing and a curse, right?

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Because I think a ramp is, in my opinion, and you can disagree with me as the sales comp

guy, a ramp is only as good as your sales onboarding.

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If your sales onboarding is effective and you have good sales enablement teams who are

gonna train you up and get you going, great.

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If you are told...

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as I have in the past.

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Well, here's our deck and here's the product, go sell it.

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That ramp can be very, very non-useful depending on what the organization is like.

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I'm...

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They're useful, they're nice, but I'm not blown away by them unless the company itself is

very well organized.

353

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Yeah.

354

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And so when we're talking about a ramp, are we really talking about a proration of quota?

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that just to be in sync on the language?

356

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Is that what we're thinking?

357

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I think I've seen multiple designs of ramps and steps you I've seen them whereby, you

know, basically, it was a literally a different percentage for q1 q2 q3 q4, I mean, the

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bias towards paying out more on q4 deals.

359

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Well, guess what that does incentivizes people to sledge their deals into q4 because

they're going to get paid more on them.

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I've seen it whereby it's like

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until you achieve 25%, you're only getting paid A.

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But as soon as you achieve 25%, you get paid A and a half between 26 and 50.

363

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And all kinds of complicated things that basically mean that your compensation is skewed

towards quota.

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And I think the most egregious I saw of it was that if you sold 80%, you actually only got

50 % of your OTE.

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because of this ridiculous ramp that was there because it was so biased towards a

proportion of the compensation being in that 80 to 100%.

366

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And oftentimes that is done because the company has an experience or whoever is running

the compensation design has an experience of lots of people getting close to their OTE and

367

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going, yeah, that's good enough.

368

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in terms of their lifestyle and what they were looking for and maybe they're not as

motivated by spending a week in Hawaii or whatever the attainment of like your boost is.

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And so that's what I mean by a ramp and it can be designed in different ways as I've

described.

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So I'll use slightly different terminology to kind of try to explain in a couple different

ways.

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Because I think of ramp in a more of, let's say, a new hire scenario as a default, where

I'm kind of thinking of a...

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Because I'll say this, like everything that you describe is kind of modifications to a pay

curve.

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And so there's this x, y axis between pay

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and performance.

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so along that pay curve, you may essentially withhold pay entirely, like a true threshold,

where it's like, well, you don't get paid anything until you get to X percent, right?

376

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Because you're working for the company until we make enough to pay for your salary type of

thing, right?

377

00:34:17,524 --> 00:34:22,846

And that does make a lot of sense in certain organizations, not usually in tech, candidly.

378

00:34:22,846 --> 00:34:25,407

It's not as a common thing.

379

00:34:25,459 --> 00:34:33,167

Um, but there's also the modifications to the pay curve that then involved, um,

withholding of some capacity or step ups.

380

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it's, it's just like the concept of a cap, right?

381

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Ideally best practice in sales comp is not to have a cap, but there are certain scenarios

where it's, it may make sense.

382

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It depends on what you sell.

383

00:34:43,096 --> 00:34:47,102

like, if you have a true capacity issue, like a manufacturing.

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where you genuinely cannot sell, like the company cannot deliver more than a certain

amount, then there are certain times where you need them to stop selling for periods of

385

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time or sell less.

386

00:34:55,889 --> 00:35:02,034

So there's a declining marginal productivity aspect that goes with a declining rate over a

certain amount as well.

387

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We can see that those, depending on the business you're in, sometimes it makes sense,

sometimes it doesn't.

388

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But the usage of a ramp for new hire, as an example,

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Is meaningful only and Bethany I think you said it correctly is the it's meaningful only

in the way that the company can actually support the intent and so if it's like We need

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you to learn how to sell things our way And so what we're gonna do is put you to school

for a couple weeks Well, so what we're gonna do is we're gonna we're gonna prorate your

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quota and we might even prorate your variable side as well And then if you overachieve if

you do it, right?

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If you overachieve, then you actually get this sort of like golden handcuffs type of

thing, because you have a really good experience on your first year of comp, because we

393

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prorated all the things.

394

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If you're successful, win-win, right?

395

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That's how I like to see those sorts of things play out.

396

00:35:53,165 --> 00:35:57,876

It doesn't always work that way, mind you, but that makes a lot of sense.

397

00:35:57,876 --> 00:36:03,383

Now, Stuart, to the sort of rest of what you were also talking about is it's like,

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there are certain sales functions that are so separated from the reality of the act of

selling that, and I mean this from a, let's say a procuring cause of influencing others to

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purchase, right?

400

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And actually having a contract.

401

00:36:20,699 --> 00:36:27,731

So like med device type of areas, pharma, where you really can't even pay people for the

402

00:36:27,731 --> 00:36:31,045

that you need them to do because technically that's illegal.

403

00:36:31,045 --> 00:36:40,793

And we have those sorts of scenarios where it gets a little bit more complicated to uh

figure in these proxies for like, well, how are we gonna pay these people when we

404

00:36:40,793 --> 00:36:44,176

essentially need them to do educational marketing, right?

405

00:36:44,176 --> 00:36:48,360

And so they're selling, but not really selling, but they're our sales force.

406

00:36:48,360 --> 00:36:52,725

And so you do have some of those challenges where you have to construct mechanics.

407

00:36:52,725 --> 00:36:55,576

that are more of like run rate revenue.

408

00:36:55,576 --> 00:37:04,227

And so you have these threshold scenarios where it's super complicated and it's, I'll be

honest, they don't really work.

409

00:37:04,227 --> 00:37:06,427

It's just what people expect.

410

00:37:06,493 --> 00:37:10,693

And sometimes that's just how solid sales comp evolves.

411

00:37:10,693 --> 00:37:15,324

We picked something once upon a time and we're still living with it 20 years later.

412

00:37:15,324 --> 00:37:22,199

And you also get the whole new CRO, well, this worked for me before, so we're gonna

redesign around this.

413

00:37:23,661 --> 00:37:31,398

there's lots of what I call inherited grief that happens when you get married to a new

sales leader.

414

00:37:31,398 --> 00:37:34,841

But I've seen it happen with the new CFO as well.

415

00:37:34,841 --> 00:37:39,758

New CFO comes in and everybody in sales always is paranoid about finance.

416

00:37:39,758 --> 00:37:43,401

because they always think they're trying to take money out of their pocket.

417

00:37:43,401 --> 00:37:44,322

Yeah.

418

00:37:44,522 --> 00:37:45,643

And sometimes they are.

419

00:37:45,643 --> 00:38:01,849

um And so from that perspective, you know, I know we both experienced CFOs in our time

that, you know, we're not even shy about sharing their opinion about that in terms of, you

420

00:38:01,849 --> 00:38:04,101

know, the way that sales were compensated.

421

00:38:04,101 --> 00:38:05,309

422

00:38:05,309 --> 00:38:11,303

Let me ask you, let me pivot that a little bit to another topic that is often comes up.

423

00:38:11,303 --> 00:38:24,173

And sometimes it's announced in the fiscal plan, but oftentimes it's introduced mid-year

or partway through the year when the company suddenly decides either, ooh, we missed

424

00:38:24,173 --> 00:38:26,956

something that we really wanted to focus on or

425

00:38:26,956 --> 00:38:34,200

get a new set of marching orders because maybe revenue trajectory isn't going well in the

first or second quarter or whatever it be.

426

00:38:34,200 --> 00:38:45,994

And that's the horny, horrible tackling thing that I've always struggled a little bit with

psychologically, except when you happen to fall into the positive side of it.

427

00:38:49,276 --> 00:38:53,949

Sales performance incentive schemes, or otherwise known as SPFs.

428

00:38:53,949 --> 00:38:54,786

Yeah.

429

00:38:54,804 --> 00:39:03,238

Spiffs, I've got a love hate relationship because as I say, I've benefited from them,

whereby, you know, I've received some quite nice checks.

430

00:39:03,238 --> 00:39:07,399

Normally it was for a deal that I already had lined up and was closing anyway.

431

00:39:07,399 --> 00:39:11,051

So I always feel a bit ambivalent about Spiffs.

432

00:39:11,051 --> 00:39:18,957

But I do know that they cause quite a bit of discontent among salespeople because they

start the year

433

00:39:18,957 --> 00:39:20,248

They think they know what the plan is.

434

00:39:20,248 --> 00:39:23,060

And then suddenly there's a curveball introduced.

435

00:39:23,060 --> 00:39:26,153

And if it's minor, then that's not too bad.

436

00:39:26,153 --> 00:39:32,711

And you just slap the back of the person who is successful, being able to get paid on it

and go, you're lucky dog.

437

00:39:32,711 --> 00:39:33,823

And on you go.

438

00:39:33,823 --> 00:39:43,241

But when it's suddenly something very significant and you see somebody getting paid for

something that they were probably going to bring in anyway, I think it creates a lot of

439

00:39:43,241 --> 00:39:45,134

discontent around.

440

00:39:45,134 --> 00:39:46,526

that's my ambivalence.

441

00:39:46,526 --> 00:39:55,545

you give me your experience of how those kind of mid-year curveballs affect the sales

compensation professional?

442

00:39:55,545 --> 00:39:59,427

Yeah, so as it relates to SPIFs you're exactly right.

443

00:39:59,427 --> 00:40:02,275

People either tend to love them or hate them.

444

00:40:02,275 --> 00:40:04,281

And they're very, very few in between.

445

00:40:04,281 --> 00:40:10,217

tend to, I I tend to be okay with them if you have a good program to start off with.

446

00:40:10,217 --> 00:40:12,698

And that's kind of like a big question mark.

447

00:40:12,698 --> 00:40:21,106

like if you essentially just have these contests and you layer them on top of this pile of

chicken and

448

00:40:21,106 --> 00:40:31,334

entrails, then you have a problem because all you're doing is just throwing money at

things and hoping that something works.

449

00:40:31,334 --> 00:40:37,477

And I've seen that before, not a big fan, because again, you just come across like you

don't know what the hell you're doing.

450

00:40:37,477 --> 00:40:46,060

Now, if you have a good, if you have a pretty good program and it's sort of in sync and

congruent, and then we have like a bunch of a new product, we have something that was

451

00:40:46,060 --> 00:40:47,192

outside of the

452

00:40:47,192 --> 00:40:53,548

outside of the realm of understanding, you know, like some sort of significant market

shift.

453

00:40:53,548 --> 00:40:57,511

There was an announcement, there's a merger and acquisition, something like that.

454

00:40:57,511 --> 00:41:01,325

Or there's a really like a clear go get, like your competitors doing this.

455

00:41:01,325 --> 00:41:02,707

Okay, we got to pivot quick.

456

00:41:02,707 --> 00:41:10,074

Those sorts of things are good reasons because how we make sure a SPF makes sense is that

it is temporary.

457

00:41:10,074 --> 00:41:16,186

It is not a thing where we train our customers to expect it every quarter at the end of

every quarter.

458

00:41:16,186 --> 00:41:25,219

Kind of like they know that it's coming, which means they're expecting a discount from us

because they know there's going to be a spiff associated with having them sign it on the

459

00:41:25,219 --> 00:41:28,130

last day, the last minute of every quarter, right?

460

00:41:28,130 --> 00:41:35,286

Like we train people to respond in the way that they ideally want to be treated, whether

we're conscious of it or not.

461

00:41:35,286 --> 00:41:40,277

This can be a bit of a problem if you overuse it.

462

00:41:40,277 --> 00:41:46,448

And also, for a good SPF to be good, it also needs to be a reasonable percentage of the

total comp.

463

00:41:46,448 --> 00:41:50,282

So it's kind of like if it's small enough but meaningful enough.

464

00:41:50,282 --> 00:41:52,733

This is a little bit of like Goldilocks here.

465

00:41:52,733 --> 00:41:54,513

We have to find it out.

466

00:41:54,513 --> 00:42:00,944

But that's also why SPFs only work for certain groups in certain ways.

467

00:42:00,944 --> 00:42:11,654

like enterprise field sales should not get the same amount as a lead gen person for their

contribution to maybe even what ultimately becomes the same transaction.

468

00:42:11,654 --> 00:42:12,525

should have it.

469

00:42:12,525 --> 00:42:17,259

should be sized locally to their relative total total comp package.

470

00:42:17,259 --> 00:42:22,802

as well as one of the other reasons like a SPF can work is it's gotta be within your

sphere of control.

471

00:42:23,183 --> 00:42:27,697

So, so ideally when I feel like some things have worked from a

472

00:42:27,697 --> 00:42:37,542

from a SPF perspective, I have done it more of a, I've leaned more towards this the last

few years, is more like a hunting license.

473

00:42:37,542 --> 00:42:49,566

Like let's identify very specific things that need to be accomplished and put money

associated with the accomplishment of those rather than kind of like grandiose, if the

474

00:42:49,566 --> 00:42:54,487

company gets to this, where everybody's gonna get this, I'd rather it be,

475

00:42:54,539 --> 00:42:57,659

Give me the deals that we need in order to make the things happen.

476

00:42:57,659 --> 00:43:04,673

And we have a one-on-one conversation with those people about what is it these needs to be

accomplished and then see if we can even get them to move, right?

477

00:43:04,673 --> 00:43:10,726

Because obviously one of the things, depending on what you're selling and who you're

selling to, it doesn't matter if you throw all the money in the world to something, it

478

00:43:10,726 --> 00:43:11,706

doesn't mean it's gonna move.

479

00:43:11,706 --> 00:43:20,912

So why get ourselves all twisted in with this idea that everything is coin operated when

in fact it isn't?

480

00:43:20,912 --> 00:43:21,391

Hmm.

481

00:43:21,391 --> 00:43:22,473

And that's so true.

482

00:43:22,473 --> 00:43:31,625

I worked for a company where every Q4 there would be a spiff saying everything that's

closed in the last 30 days, you get an extra X percent.

483

00:43:31,625 --> 00:43:34,849

And my first year I got burned on it because I made my quota in Q3.

484

00:43:34,849 --> 00:43:37,642

I was like, look at me, I pulled all my stuff in.

485

00:43:37,642 --> 00:43:38,073

I'm good.

486

00:43:38,073 --> 00:43:38,996

I'm sitting pretty.

487

00:43:38,996 --> 00:43:40,708

you learn the right way of selling.

488

00:43:41,330 --> 00:43:42,331

Exactly.

489

00:43:42,331 --> 00:43:44,874

And then everyone sandbags.

490

00:43:44,874 --> 00:43:45,665

But guess what?

491

00:43:45,665 --> 00:43:54,603

They then did that in, you know, in one year and a lot of the big sandbagged deals for

December didn't come in.

492

00:43:54,603 --> 00:43:56,754

And we as a company did not hit our target.

493

00:43:56,754 --> 00:44:05,428

And it's like, well, these deals might've closed in October, September, earlier in the

year if you hadn't trained your salespeople.

494

00:44:05,428 --> 00:44:06,448

to sandbag crap.

495

00:44:06,448 --> 00:44:10,143

Now I still sell my stuff because I am one of those, I like my 100%.

496

00:44:10,143 --> 00:44:15,879

I like psychologically, I want to know that I have the money coming.

497

00:44:15,879 --> 00:44:18,592

So as soon as I can get it signed, I get it signed.

498

00:44:18,592 --> 00:44:23,318

But there's a lot of salespeople who don't act that way.

499

00:44:23,318 --> 00:44:31,187

And I think when you know there's going to be a Q4, you know, fire sales spiff, it's, I

don't think that's encouraging good behavior.

500

00:44:31,187 --> 00:44:33,709

And that's what a comp plan is supposed to do.

501

00:44:33,709 --> 00:44:35,741

It's supposed to drive the best behavior.

502

00:44:35,741 --> 00:44:40,525

So if you're just going to blow it up at the end of the year, now unless you're desperate,

right?

503

00:44:40,525 --> 00:44:44,378

If you're desperate and you just need money, throw money at your sales people.

504

00:44:57,275 --> 00:44:59,746

And I think there are a lot of companies that do have that.

505

00:44:59,746 --> 00:45:03,806

They some almost a reek of desperation because they don't know what they're doing.

506

00:45:03,806 --> 00:45:06,017

They haven't solidified their strategy.

507

00:45:06,017 --> 00:45:16,388

And so they select the thing that they think might be the most accessible for everyone

instead of doing enough of the work behind the scenes.

508

00:45:16,388 --> 00:45:25,779

So one of the things that I cover and I would say, and I think I reiterated many of my

books is that you, as an organization, you need to go and spend the time to know what you

509

00:45:25,779 --> 00:45:26,253

can.

510

00:45:26,253 --> 00:45:32,728

you can actually afford to do before you go and hire people to do it.

511

00:45:32,728 --> 00:45:36,989

So this is a ready, you know, ready aim shoot rather than the reverse.

512

00:45:36,989 --> 00:45:41,431

And a lot of organizations kind of do the shoot ready aim and hire a salesperson.

513

00:45:41,431 --> 00:45:46,965

Then they were like, okay, we don't know what you're going to sell, but we knew we needed

to hire good talent.

514

00:45:46,965 --> 00:45:50,588

And then both fail miserably because

515

00:45:50,588 --> 00:45:53,160

you know, the salesperson doesn't know what they're supposed to be doing.

516

00:45:53,160 --> 00:45:55,081

They don't know how they're going to be successful.

517

00:45:55,081 --> 00:45:58,843

And it's not like the product's ready or the marketing is ready or any of that sort of

stuff.

518

00:45:58,843 --> 00:46:00,135

Cause no one knows anything.

519

00:46:00,135 --> 00:46:03,214

You know, they just, they were just told they need a salesperson, you know?

520

00:46:03,214 --> 00:46:12,573

there are so many, I mean, there's always been startups, there's always been small

companies emerging in health tech, but I think especially in the last two, three years,

521

00:46:12,573 --> 00:46:18,987

there's a new AI company that I see hiring on LinkedIn like every other day, every other

day.

522

00:46:18,987 --> 00:46:29,267

And a lot of them, it's sub 50 people, maybe the founder has been the one selling so far,

or they've had one sales guy who's like a buddy from that founders.

523

00:46:29,267 --> 00:46:38,586

old world, how, and you know, and they move forward and they get to a point where they go,

okay, we need to build a sales team when we need to build a comp plan to support them.

524

00:46:38,586 --> 00:46:48,116

Obviously, I know you've done a lot of work directly for some of the bigger companies

where there are a lot more complex sales organizations, but what is maybe your advice to

525

00:46:48,116 --> 00:46:52,269

some of those smaller companies where they're just starting to hire people

526

00:46:52,269 --> 00:46:54,360

It's a lot of outsourced and partnerships.

527

00:46:54,360 --> 00:47:02,591

How do you recommend they approach trying to figure out a solid comp plan so that as you

say, both sides succeed?

528

00:47:02,591 --> 00:47:09,044

Mm Well, I think the the one that acronym of the keep it simple, stupid is always a great

is a great place to start.

529

00:47:09,044 --> 00:47:09,416

Right.

530

00:47:09,416 --> 00:47:20,604

What I what I see most common is that the smaller the organization where there's less

clarity on the performance side in terms of an understanding of of of the magnitude of

531

00:47:20,604 --> 00:47:27,340

performance or what's what's a good quota look like because they don't have enough history

is to establish more of a commission rate plan.

532

00:47:27,340 --> 00:47:27,740

you

533

00:47:27,740 --> 00:47:34,545

they understand what it is that they can afford from an ongoing cost of sale perspective,

right?

534

00:47:34,545 --> 00:47:47,210

And then as you learn more things, then you can start coaching and developing more of a

plan of understanding and ultimately shift to maybe more of that bonus style where there's

535

00:47:47,210 --> 00:47:48,250

differing levels of payout.

536

00:47:48,250 --> 00:47:51,483

So I think the simplest one usually is figuring out

537

00:47:51,483 --> 00:47:55,476

a commission rate that is acceptable for you to be able to afford.

538

00:47:55,476 --> 00:48:08,264

And then what you have to do is also do enough of the math to figure out your personal

cash flow of the revenue associated with those contracts so that you can establish enough

539

00:48:08,264 --> 00:48:11,168

of a sustainable organization to kind of...

540

00:48:11,168 --> 00:48:17,091

The thing is, what you don't want to do is have somebody wildly successful selling things

and then not have the cash to pay them.

541

00:48:17,182 --> 00:48:29,659

So in the getting it going phase, I personally think it's better to be very blunt and

honest with what effectively will be like a partner inside of your organization.

542

00:48:29,659 --> 00:48:38,384

I kind of think you treat your salespeople, especially those early years, as more of a

partner and be very frank with them about the situation of the organization.

543

00:48:38,384 --> 00:48:41,266

this is what we need in order for it keep our doors open, right?

544

00:48:41,266 --> 00:48:47,752

I need you to sell more than that in order for us to make a profit because all of that

money, nobody's getting paid really anything in those early days.

545

00:48:47,752 --> 00:48:52,256

All this money needs to go into the development of the product for the next year and the

year after that.

546

00:48:52,256 --> 00:48:56,490

And in that world, there's genuinely a true cashflow issue.

547

00:48:56,490 --> 00:49:05,319

And so figuring out how the organization can be comfortable enough to be able to pay that

person while at the same time,

548

00:49:05,319 --> 00:49:08,715

making sure that they don't get themselves into a situation where they go belly up.

549

00:49:08,715 --> 00:49:12,882

And in some cases, that means delaying the comp to be able to account for that.

550

00:49:12,882 --> 00:49:16,746

I do think this all involves a point of transparency, right?

551

00:49:16,746 --> 00:49:27,333

it's interesting because, you know, I think that your approach is the right one for that

smaller company hiring their first one or two salespeople, i.e.

552

00:49:27,333 --> 00:49:31,977

sales professionals as opposed to the founder going and being the pitchman.

553

00:49:31,977 --> 00:49:38,127

you know, just going with a straightforward 2 % of...

554

00:49:38,127 --> 00:49:47,642

of first year sales, 5%, 8%, whatever the number is that makes sense from a cost of sale

perspective to be able to offset against that.

555

00:49:47,642 --> 00:49:58,210

The thing that I see that often happens though is that they reach that mid-size where

they're going to scale up now to having 10 to a dozen salespeople.

556

00:49:58,210 --> 00:50:04,585

So therefore, we need a sales leader, we need a CRO, and they hire somebody and they

immediately

557

00:50:04,585 --> 00:50:16,636

that person comes in normally from a much larger organization and drops their sales

compensation structure in, which is designed for several hundred, maybe thousands of

558

00:50:16,636 --> 00:50:18,136

salespeople in the organization.

559

00:50:18,136 --> 00:50:23,907

And they just go, we're going to have this complexity and go, boom, drop the mic.

560

00:50:23,907 --> 00:50:30,567

And I think that kills a lot of those kind of entrepreneurial organizations for a couple

of reasons.

561

00:50:30,567 --> 00:50:30,890

One,

562

00:50:30,890 --> 00:50:38,952

It's so complicated that people can't get their head around what the heck am I actually

trying to sell and how can I be successful here?

563

00:50:38,952 --> 00:50:54,696

And then secondly, it becomes impossible to administer because there are so many variables

involved in the design of it that it becomes a weekly eight hour analysis exercise.

564

00:50:54,696 --> 00:50:59,601

And then lots and lots of contention and disagreement about, was that threshold met?

565

00:50:59,601 --> 00:51:01,023

Did they cross this trigger?

566

00:51:01,023 --> 00:51:04,258

And it just becomes very, very difficult to administer.

567

00:51:04,258 --> 00:51:09,003

But let me pivot so that we can bring things to a close.

568

00:51:09,003 --> 00:51:09,691

Obviously.

569

00:51:09,691 --> 00:51:11,849

There's so many things I'd want to comment on that.

570

00:51:11,849 --> 00:51:22,960

Well, maybe we'll record that on a follow up with you in terms of like, you know, over

design and then, you know, how the heck do you administer plans eventually?

571

00:51:22,960 --> 00:51:29,811

But where I wanted to take things to bring us towards the close was 2026 is coming.

572

00:51:29,811 --> 00:51:44,299

Can you think of advice that you would give executive leaders that in terms of trends that

you see occurring now from either your own direct experience or the networks you're part

573

00:51:44,299 --> 00:51:47,201

of, what is the new hotness?

574

00:51:47,201 --> 00:51:52,004

What are the trends that are starting to happen in and around sales compensation?

575

00:51:52,004 --> 00:51:56,523

And then for individual contributors, from Bethany's perspective,

576

00:51:56,523 --> 00:52:10,109

thinking about what should I expect to see with that and basically how do you respond and

react if you're an individual contributor and suddenly there's a radical redesign of what

577

00:52:10,109 --> 00:52:13,633

you've been used to based on those emerging trends.

578

00:52:13,764 --> 00:52:25,443

So I think if I if I think about the what's going on in the world I think that there's a

couple of a couple of things that come to mind number one at least on the the tech side

579

00:52:25,443 --> 00:52:36,067

there's an ongoing movement from and I think for many of us that lived through this the

that initial license fee to the subscription model type type of thing and now subscription

580

00:52:36,067 --> 00:52:39,450

model to consumption base being that sort of next phase

581

00:52:39,498 --> 00:52:52,065

And so there's lots and lots of talk of that as well as AI, course, but AI has still got a

long way, I think, my opinion, before it gets to really be the thing that necessitates a

582

00:52:52,065 --> 00:52:53,676

modification of the clock.

583

00:52:53,676 --> 00:52:54,195

Yeah.

584

00:52:54,195 --> 00:52:56,815

bots are gonna be answering the phone to everybody.

585

00:52:57,255 --> 00:52:58,475

Yeah, sorry.

586

00:52:59,687 --> 00:53:13,799

And so I think the consumption model is a little bit of a shift for tech in the way that

it's almost, this is the part where I say it's almost a lot like actual revenue for so

587

00:53:13,799 --> 00:53:16,461

many companies that have always lived that way.

588

00:53:16,461 --> 00:53:21,825

And so they ask the question, well, what's the difference between the way we've always

paid, right?

589

00:53:21,825 --> 00:53:24,999

But it's the nature of having to reassess

590

00:53:24,999 --> 00:53:32,571

the points of engagement between the different sales functions because of the nature of

consumption, right?

591

00:53:32,571 --> 00:53:45,226

You still need a lot of that new business, client sales, customer success, handoff part

that requires really reassessing the who does what and how to improve the channel

592

00:53:45,226 --> 00:53:48,317

conflicts that may arise in your coverage model.

593

00:53:48,317 --> 00:53:50,699

That is what I'd say is the bigger part.

594

00:53:50,699 --> 00:53:51,980

And this is how I look at things.

595

00:53:51,980 --> 00:53:55,894

It's gotta be, it's gotta be strategy first, org, then comp.

596

00:53:55,894 --> 00:53:57,516

Comp is the last, right?

597

00:53:57,516 --> 00:54:04,332

So don't try to, don't try to say, want to pay these people this way without us knowing

the jobs and the who does what.

598

00:54:04,332 --> 00:54:09,676

And the, is this, is this sort of like aligned and positively reinforcing your strategy?

599

00:54:09,676 --> 00:54:15,783

And so some of that is making sure that we can't sort of, you know, ride two horses with

one ass here.

600

00:54:15,783 --> 00:54:23,537

on the way of pursuing, well, we're gonna do a little bit of this, gonna do a little bit

that, do a little bit of this, and then expect we're gonna execute effectively.

601

00:54:23,537 --> 00:54:25,268

Not gonna happen, right?

602

00:54:25,268 --> 00:54:26,128

So there is that.

603

00:54:26,128 --> 00:54:32,582

And I would say that's the thing for the executives is pick your strategy so that it can

be executed upon, right?

604

00:54:32,582 --> 00:54:35,764

Because people can then really follow through on it more effectively.

605

00:54:35,764 --> 00:54:40,466

So if you're kinda like a little bit in, well then you're probably not gonna get there,

right?

606

00:54:40,466 --> 00:54:41,027

If that's it.

607

00:54:41,027 --> 00:54:41,620

And then,

608

00:54:41,620 --> 00:54:51,249

The thing that we see in sales comp is so many things change, but so many of them stay the

same, which would be go and look at your comp plan every year.

609

00:54:51,249 --> 00:54:53,601

Really, take the time to assess it.

610

00:54:53,601 --> 00:54:56,693

And if you don't know what you're doing, then ask around.

611

00:54:56,693 --> 00:55:00,486

Because I'm the sales comp guy, you now know a guy, you can reach out to me.

612

00:55:00,486 --> 00:55:01,357

There's always that.

613

00:55:01,357 --> 00:55:07,192

But that's part of really the need is every year you should at least go and ask.

614

00:55:07,192 --> 00:55:17,882

Ask some people, ask people you know about this, how, you know, like just shed some light

on it because part of the problem, Stuart, and you said was that CRO coming in, they

615

00:55:17,882 --> 00:55:20,058

pulled the comp plan from their prior organization.

616

00:55:20,058 --> 00:55:21,175

It doesn't mean it's any good.

617

00:55:21,175 --> 00:55:23,228

It just means that's what they're accustomed to.

618

00:55:23,228 --> 00:55:23,709

Yeah.

619

00:55:23,709 --> 00:55:25,010

Now I think that's so important.

620

00:55:25,010 --> 00:55:34,981

I've been lucky enough to mentor a lot of young sales professionals and you know, and some

of them will be so, you know, especially if they, if they rose through the ranks, right?

621

00:55:34,981 --> 00:55:44,709

If they were an intern, if they were a BDR, if they were an inside sales, and now they're

kind of, they're kind of at the big table and they've got rules, some big accounts where

622

00:55:44,709 --> 00:55:46,211

they can sell some big things.

623

00:55:46,211 --> 00:55:47,603

If you're still stuck on

624

00:55:47,603 --> 00:55:50,996

but I want to have this many calls a month.

625

00:55:50,996 --> 00:55:53,118

It's like, you're not getting paid for that.

626

00:55:53,118 --> 00:55:53,758

Stop it.

627

00:55:53,758 --> 00:55:54,910

Like it doesn't matter.

628

00:55:54,910 --> 00:55:57,672

You need to look at what your comp plan is.

629

00:55:57,672 --> 00:56:01,685

Now, if you need to do 50 calls to get to your comp plan, sure, that's fine.

630

00:56:01,685 --> 00:56:03,067

That makes sense.

631

00:56:03,228 --> 00:56:11,666

But if you're not being paid for it, and this is where I love the human psychology and

behavior side of comp plans.

632

00:56:11,666 --> 00:56:18,412

Cause I love like if you're an account manager and your comp plan is just pure, you know,

dollar renewal in, okay, fine.

633

00:56:18,412 --> 00:56:22,546

I love when a comp plan has that you have to do QBRs.

634

00:56:22,546 --> 00:56:26,868

You have to document them and you have to have this and you have to have relationship.

635

00:56:26,868 --> 00:56:35,938

I love when you're, you're explicitly telling the people, look, yes, you need to get this

many dollars in, but this is what you need to do in order to achieve it.

636

00:56:35,938 --> 00:56:37,289

I enjoy comp plan like that.

637

00:56:37,289 --> 00:56:37,820

Cause it's.

638

00:56:37,820 --> 00:56:39,740

I think it's easier to achieve.

639

00:56:39,740 --> 00:56:41,200

like, I can do QPRs.

640

00:56:41,200 --> 00:56:43,111

Left all day, easy.

641

00:56:43,111 --> 00:56:44,662

But it's behavior.

642

00:56:44,662 --> 00:56:45,962

You have to look at the behavior.

643

00:56:45,962 --> 00:56:55,835

And if you don't understand it, go to your trusted peers, go to the people that made their

number last year and be like, hey, could we just get on a Teams meeting and you talk me

644

00:56:55,835 --> 00:56:57,926

through how you're understanding this?

645

00:56:57,926 --> 00:57:00,448

Talk to your manager, talk to another manager.

646

00:57:00,448 --> 00:57:02,219

It really is.

647

00:57:02,219 --> 00:57:11,172

You your CRO is not gonna sit on that call when they announce the comp plans and be like,

this is what we need you to do and what we want you to do and what we're really saying

648

00:57:11,172 --> 00:57:11,773

here.

649

00:57:11,773 --> 00:57:20,060

No, they're gonna just read through line by line and, you know, they're gonna remove some

of the detail and the narrative behind it.

650

00:57:20,060 --> 00:57:29,948

think it is an important thing for people to figure out the path that translates into

their greatest level of success.

651

00:57:29,948 --> 00:57:34,201

And there's more than one path to be able to do that, right?

652

00:57:34,201 --> 00:57:40,083

I mean, if I'll use baseball, there are home run hitters, and then there are singles and

doubles hitters.

653

00:57:40,083 --> 00:57:43,415

There are people that steal bases and on and on and on, right?

654

00:57:43,415 --> 00:57:46,637

And your combination of how you make money can be

655

00:57:46,637 --> 00:57:59,808

uh limitless, but sometimes it is as simple as you got to do these things and and there

That probably is something that many many folks Who might ultimately be B and C players?

656

00:57:59,948 --> 00:58:07,023

Don't ask enough of the questions of the people that are making the big money on A regular

basis.

657

00:58:07,023 --> 00:58:09,735

Tell me how you do this every year.

658

00:58:09,735 --> 00:58:13,178

Tell me what you're doing so then I can go and you know

659

00:58:13,178 --> 00:58:16,321

participate in the secret sauce is as it were.

660

00:58:16,321 --> 00:58:25,351

that's because ultimately coming from a comp sales compensation professional, I would

prefer more people make lots of money because I set up a comp plan where if you're

661

00:58:25,351 --> 00:58:27,353

successful, the company is successful.

662

00:58:27,353 --> 00:58:30,447

We don't, actually don't want you to underperform.

663

00:58:30,447 --> 00:58:32,769

I want more people to overperform.

664

00:58:32,769 --> 00:58:37,278

And I think that there may be, you know, maybe finance doesn't always agree with that, but

665

00:58:37,278 --> 00:58:38,109

exactly.

666

00:58:38,109 --> 00:58:48,917

think the folks that sit long enough in that game realize that if they do it right,

they're setting up so that everybody can participate in the point of success and it not be

667

00:58:48,917 --> 00:58:50,969

like a detriment to the organization.

668

00:58:50,969 --> 00:58:55,194

Both things can happen and it's a good thing if it does.

669

00:58:55,194 --> 00:59:09,420

I think that it's kind of interesting because this is where the sales leaders role becomes

very important in terms of matching the personalities and competencies of the individual

670

00:59:09,420 --> 00:59:18,590

characters they have and which roles they're playing and what triggers them because you

know like Bethany described there are some people who do

671

00:59:18,590 --> 00:59:20,092

like a grind.

672

00:59:20,092 --> 00:59:23,776

They don't like having going whale hunting.

673

00:59:23,776 --> 00:59:29,269

You know, they don't like I've got two chances to make my quota all year.

674

00:59:30,210 --> 00:59:31,990

And there are others.

675

00:59:32,591 --> 00:59:37,374

Yeah, that there are others who that's what they live for.

676

00:59:37,374 --> 00:59:42,498

They get a visceral high from the anxiety.

677

00:59:42,498 --> 00:59:50,089

of navigating those deals to maturity with lots of risk normally associated with them.

678

00:59:50,089 --> 01:00:06,060

And then the exquisite high of closing those deals and, you know, and then, you know,

like, you know, a single deal blowing them to 180, 200 % of quota and so on and so forth.

679

01:00:06,060 --> 01:00:09,540

And that's, those are very different personalities.

680

01:00:09,540 --> 01:00:11,211

And I think as a sales leader,

681

01:00:11,211 --> 01:00:21,988

Finding those characters and matching them appropriately against the function that you're

wanting them to perform and the territory and the product mix and so on and so forth is

682

01:00:21,988 --> 01:00:26,081

another part of the dark art of sales compensation.

683

01:00:26,081 --> 01:00:30,934

typically I always used to say to people, the comp plan is what the comp plan is.

684

01:00:30,934 --> 01:00:34,157

Read it, understand it, because it's your instruction manual.

685

01:00:34,157 --> 01:00:35,050

But also...

686

01:00:35,050 --> 01:00:36,471

you're not negotiating it.

687

01:00:36,471 --> 01:00:44,035

It's not like you have a lot of opportunity to influence it because it's been designed for

a company's purpose.

688

01:00:44,035 --> 01:00:52,217

And you're just trying to sort of like interpret it to say, okay, so now from a selfish

perspective, how can I get the most out of this?

689

01:00:52,217 --> 01:01:01,308

So I think what comes to mind for me when you were just saying that is I think we almost

need to come up with like a sales pamphlet, like a sales coaching pamphlet that says, take

690

01:01:01,308 --> 01:01:17,248

all of your folks to a casino and what kind of games do they line themselves up with and

probably will tell you a lot of things as to their scale of risk aversion and or drive for

691

01:01:17,248 --> 01:01:19,871

the high associated with the, you know,

692

01:01:19,871 --> 01:01:23,419

craps table versus the one-armed bandit type of type of games

693

01:01:23,419 --> 01:01:24,031

Yeah.

694

01:01:24,031 --> 01:01:31,368

And if they're single number betters on a roulette wheel, then maybe return them to the

community.

695

01:01:31,368 --> 01:01:34,978

There's a balanced strategy associated with that.

696

01:01:34,978 --> 01:01:36,707

Yeah, exactly.

697

01:01:36,707 --> 01:01:44,513

say though, I did enjoy one time I was at a sales kickoff and you know, they did the big

presentation of the new comp plan and the leaders are up there.

698

01:01:44,513 --> 01:01:50,837

And we had this guy that would have had just graduated like six months ago from business

school or whatever.

699

01:01:50,837 --> 01:01:52,447

He was very, very young.

700

01:01:52,447 --> 01:01:55,230

He'd gotten very drunk the night before and they announced it.

701

01:01:55,230 --> 01:01:57,571

We're all, know, sales people, we always grumble, right?

702

01:01:57,571 --> 01:02:00,691

Well, it should have been this percentage, that percentage, whatever.

703

01:02:01,182 --> 01:02:00,443

enough.

704

01:02:00,443 --> 01:02:01,675

So we were all grumbling.

705

01:02:01,675 --> 01:02:02,685

He was so inspired.

706

01:02:02,685 --> 01:02:04,596

He was like, we need to revolt.

707

01:02:04,596 --> 01:02:05,857

We need to go up there.

708

01:02:05,857 --> 01:02:08,719

We need to give them a piece of our mind so they change it.

709

01:02:08,719 --> 01:02:15,840

And if we all get to get, and we were like, oh no, we're not actually gonna do any of this

or tell anybody any of this.

710

01:02:15,840 --> 01:02:19,220

yes, yes, yes, yes.

711

01:02:19,220 --> 01:02:19,500

Right.

712

01:02:19,500 --> 01:02:20,520

Harumph, harumph.

713

01:02:20,520 --> 01:02:22,735

And no, we're not gonna actually like do anything now.

714

01:02:22,735 --> 01:02:28,425

but the dude was ready to like storm the C-suite and we were all like, no dude, calm down.

715

01:02:28,425 --> 01:02:28,672

Okay.

716

01:02:28,672 --> 01:02:29,532

Okay.

717

01:02:29,918 --> 01:02:34,102

Sticking with your musical theater sort of introduction Bethany.

718

01:02:34,102 --> 01:02:42,239

Well Chris, you know, I feel like we could talk for at least another hour on these topics

and maybe we will.

719

01:02:42,239 --> 01:02:47,119

Maybe we'll find an opportunity to have you back and talk about other topics.

720

01:02:47,119 --> 01:02:50,800

the stupidest comp plan they've ever had to work against.

721

01:02:50,923 --> 01:02:52,608

Or that you've been told to create.

722

01:02:52,608 --> 01:03:04,095

Yeah, in the comments, please, if anybody has got the, my God type examples of

compensation plans that they have had to suffer through, or if you want some advice from

723

01:03:04,095 --> 01:03:11,010

Chris, obviously we're gonna put his details uh up and you can also pose some questions in

the comments here as well.

724

01:03:11,010 --> 01:03:16,574

uh or email Haverin about and we'll be delighted to pass those on to Chris.

725

01:03:16,574 --> 01:03:22,718

But for now, Chris, I just want to thank you so much for agreeing to come and share your

wisdom with us.

726

01:03:22,718 --> 01:03:25,431

And, you know, it's been terrific.

727

01:03:25,207 --> 01:03:29,487

Well, I hope you all really enjoyed listening to that conversation with Chris Goff.

728

01:03:29,487 --> 01:03:35,569

He is such a intelligent resource for all things, sales comp and salary.

729

01:03:35,569 --> 01:03:38,209

And it was interesting to learn some of the inner workings.

730

01:03:38,209 --> 01:03:48,201

I've got to remind myself not to play that podcast in the car when PJ is listening, cause

she is gonna, she will negotiate a hard bargain.

731

01:03:48,201 --> 01:03:49,185

I, whew.

732

01:03:49,185 --> 01:03:49,958

the lessons.

733

01:03:49,958 --> 01:03:54,538

be like, so I am my understanding is that it should be $10 for my first tooth.

734

01:03:54,538 --> 01:03:56,200

I'm like, whoa, whoa.

735

01:03:56,402 --> 01:03:58,015

Let's negotiate down.

736

01:03:58,015 --> 01:03:58,916

exactly.

737

01:03:58,916 --> 01:04:04,216

And if you need help, then please, ah we've got Chris's details.

738

01:04:04,216 --> 01:04:07,149

And remember, it's the Sales Comp guy.

739

01:04:07,149 --> 01:04:09,641

And you can find him on LinkedIn.

740

01:04:09,641 --> 01:04:13,455

He's got his own website, and we'll put those links in the description.

741

01:04:13,455 --> 01:04:22,415

But Chris is very open to helping anybody understand more about the structure of sales

compensation, whether you are...

742

01:04:22,415 --> 01:04:34,152

a company leader trying to work out how do you try and best incentivize your sales teams

or you're an individual contributor trying to work out how you decipher some of the

743

01:04:34,152 --> 01:04:38,473

complexities that exist in the sales compensation plan.

744

01:04:38,473 --> 01:04:43,005

But for now until our next episode, keep Haverin

745

01:04:43,116 --> 01:04:43,757

Bye.