Should I stay or should I go? A sales rep’s guide to pursue greener pastures or not!
February 28, 2017
It’s February now and you just got handed your new sales compensation plan. Yup, they said it started January 1st and all those changes are retroactive. You were doing what you did in December but now it seems like the company has changed direction again as there are big changes to the new commission structure. Those things you’ve been focusing on are no longer that important. Sound familiar?
You are trying to decide if you should stay where you are or start returning those recruiter’s phone calls and emails. Your phone has been ringing off the hook as you are in a hot field. What to do? On the plus side, you’ve been here for a few years now. You know the ropes. You know the products and services you are selling. You like your manager and the rest of the team. But like and comfort don’t pay the bills. You’ve been a top performer making President Club the last two years. But this plan seems ridiculous. To make it worse it’s like you got penalized for being at the top with that big jump in quota! You made a good living these past few years but this year it will be more difficult. Heck, even some of the competitors are offering large sign-on bonuses to make it more enticing. So, what are the things to consider when deciding if you should stay or go?
For each point listed below, if you can live with it then check stay in the below table, if not then check go.
1. Your quota increased without justification
This is far too common! Often it is set based on last year with a growth factor which causes reps to make it one year then miss the next. Your quota needs to be based in reality, aggressive yet realistic. When it is raised beyond that it has a direct impact to your paycheck. If you have tried to renegotiate your quota and failed and management hasn’t giving you any solid data as to how it was calculated, or what new products, marketing efforts, new sales tools will help you get there it might be time to consider a change.
2. You don’t have a clue as to what you should be doing
When your sales compensation plan is confusing or things are competing so that you don’t really know what you should be doing, where you should be focusing your efforts, you are wasting valuable sales minutes which will make it harder for you to achieve your quota.
3. Your sales compensation plan now has a threshold
Talk about demotivating. I just love to work and not get paid for it! How about you? A threshold means just that, you are selling but not making any commissions until you cross over a certain level. If the threshold is reset monthly, it encourages feast or famine if you can postpone closing sales until you are clearly over the threshold.
4. You don’t know where you stand against the goal
This happens in a few ways. It happens when there is no sales tracking data available. I know it is hard to believe that there are companies that still don’t have an up-to-date CRM which the reps have access to. It more frequently happens when the sales credit value is not determined by the event that you, the sales rep controls - the value of the closed sale. Far too often companies use things that you can’t control to determine when you get credit (like cash received) or complex formulas that take a team of accountants to determine the sales value.
5. It doesn’t matter how much you sell, you get the same commission rate
A plan like this reward every sale the same and is often called a flat rate commission plan. Companies like it because it’s easy to forecast and administer. But there are many companies out there that believe the more you sell above goal should be paid at an accelerated rate. You can probably make more elsewhere.
6. Your waiting too long for that commission check
Some companies pay only once a quarter, others take almost a quarter to calculate the commissions. The worse I heard of was a tech company that paid once a quarter but a quarter in arrears. So, if the rep closed a sale in January, they had to wait until July to receive their commission check. Don’t you love being the bank and giving free loans to the company.
7. I can’t understand how that commission check is calculated
When the commission calculation is complicated with fancy formulas, things linked together, events that are hard to determine, it becomes difficult to understand the commission calculation. You will be tempted to create your own commission calculation. That calculation is referred to as shadow accounting. This is a waste of your time and again taking valuable sales minutes away from your selling time.
8. Management keeps telling you what to do but it isn’t how you are getting paid
When there is a mismatch between what the commission plan is telling you to do and management it puts you in a difficult situation. Do you keep your management happy or your paycheck fat? Either way it’s a conflict and you are wasting your energy.
9. My own criteria
Add a point that is important to you but not covered. That way you won’t be in a 4/4 deadlock!
Question Stay Go
Now tally up the number of Stay and Go answers. If you have mostly Go, then it is time to consider a change. I do know there are many aspects to deciding on a career change other than your commission check, but let’s face it, it is an important part of it!