Sales Reps slowing down – is your comp plan to blame?
I was recently at a party with a lot of sailors in for a local race. I wonder how these people have the flexibility to travel around the country for sail boat races. At these gatherings I usually spend my time learning about the jobs they hold that allow them the time to sail and the money to travel. It is always interesting to see the diverse work background this group of people have united in their love for the sport of sailboat racing.
This year I was speechless when one person told me his story. You see Mike (not his real name) was a sales rep. He proudly told me he was close to quota and could enjoy the summer sailing. And the year before he reached his quota so he took most of the late summer and fall off to sail, just doing enough work to line stuff up for next year.
Yup, you heard it right – work really hard until you get to your quota and then stop!
Every sales rep I know would be doing exactly the opposite of Mike. They would be pushing hard to exceed their quota and reach accelerators. When a sales compensation plan is designed well, the rep should earn a significantly higher commission rate, the accelerator commission rate for sales above quota.
That wasn’t the philosophy for Mike’s company. This company paid well until the reps hit quota. They had to work hard to reach their quota but Mike was a great sales professional and consistently reached or slightly exceeded quota. In other words, Mike did what was expected of him but nothing more.
Curiosity had me asking a lot of questions about his sales compensation plan design. It didn’t take me long to figure out what was wrong – there was no upside potential in his plan. Stated another way – he did not earn any commissions for sales above his quota. Once he reached quota, he did what any sales professional would do when they no longer get paid for their efforts– STOP SELLING. Why would anyone sell anything if they received $0 commission for the sale? His plan was a highly leveraged plan up until quota – meaning there was a small base salary component. To make ends meet he had to work hard to reach his quota but with no earning opportunity beyond quota, he just sailed!
He didn’t stop working altogether. To help him achieve his quota next year, he’d spend enough time to load his pipeline and blow out his Q1 2019 goal and keep his manager off his back for the rest of this year while ensuring he had enough free time to pursue his dream.
Are your sales reps hitting the breaks too? Look at your sales compensation plan to understand if that is the root of your problem.