In this episode of "Run the Numbers," CJ Gustafson delivers a solo brain dump on sales compensation. He covers key aspects of designing sales rep compensation plans, including the roles of People Operations, FP&A, and RevOps, and getting the base versus variable split right. He discusses quota to on-target earnings (OTE) ratios, baselining achievement, accelerators, and paying sales managers. CJ uses Salesforce's early compensation plans as a case study, addresses what counts as a booking, and points out common compensation plan flaws. He also delves into the art and science of SPIFs (sales performance incentive funds), their potential pitfalls, and effective structures, and benchmarks commission rates for account executives, considering factors like customer lifetime value and cost of goods sold.
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