Your Comp Plan Actually Does Have a Cap
Why are sales organizations touting “uncapped commission plans” these days? Of course it’s not capped. Well at least not technically capped. (And by the way if you run across an org that actually does have a cap, run away, and run away fast).
Unfortunately though, when you hear “Our commission plan is uncapped!”, many sales organizations are still operating with capped plans, it’s just not the kind of cap you are thinking of. While there may not be a specifically defined “cap”, you have to figure out how they are really capping it, because I’ve seen it capped a bunch of different ways, and here are a few common examples:
— The company isn’t investing enough in marketing, so you’re capped based on how much pipeline you can self-generate (i.e your plan is capped based on how many cold calls you can make in a day)
— The product isn’t keeping up with the market or strategically missed the mark on a key function – whoops. So you can sell what you have, but that’s effectively a cap as you’re at a distinct disadvantage in the marketplace.
— The over-investment in sales has resulted in too many reps on the floor and not enough addressable market – there’s your cap.
— Not investing enough in sales professional development, learning, training. You simply won’t be able to reach your full potential without that support. Another form of a cap on your compensation.
So understand there’s more than one way a comp plan is capped, and a truly “uncapped plan” is not just the terms of your incentive agreement, it’s also how the overall organization is managed and the quality of the sales (and company) leadership.
No sales organization is going to be perfect, and so it’s critical that you go into a new role knowing clearly what limitations are in place and what your plan will be to overcome those limitations. If your skillset doesn’t mesh well with those limitations (i.e. you need structured training, or you sometimes struggle with a bunch of cold calling), you could be in for a short tenure.
Oh and if you do happen to find a sales org that’s truly uncapped – take advantage of it!
#leadership #sales #compensation