Thoughts o...

Question

Thoughts on the commission structure at Qualtrics? Does it help or hinder sales performance?

Current Employee · Accepted Answer

I'm not sure if the commission structure is consistent across the organisation but in EMEA enterprise we see a fairly good 10.5% rate of ACV.

The interesting part is that when selling a multi-year deal (3 years or more) we get a rate of 5.25% on the additional years meaning you can effectively double your commission payout with a 3 year deal over a 1 year.

This conflicts a little with the fact our targets are purely based on ACV as at times its financially beneficial to reduce ACV to sell a multi-year deal but this can mean you're further behind your core KPI.

Current Employee · Answer

It's poor for me.  In the initial interviews, the commission structure was portrayed as a 50/50 split between base and bonus (standard in industry).  My starting salary in 202 was $234,764.00 so you'd assume that the split would be 117,382 for each.  Instead, my base was 113,500 and my bonus was 121,264 with an added kicker that 93,280 of that bonus was for hitting my quota number and the extra 27,984 was a multi year kicker (60% of your contracts had to be multi year to achieve this).

Thus the two frustration points for me were:
--my split wasn't 50/50 but rather 48/52
--I now have a penalty for not doing multi year deals (very challenging in the public sector and a significant amount of extra paperwork for us, with zero benefit to Qualtrics since the government can opt out of option years as they please)

Other notes:
--I'd also highlight that the AE rates are non negotiable to eliminate bias.  Unfortunately, their range is set I presume based on data from Utah and thus if you worked from an office in a higher cost region, you will be underpaid compared to peers at other companies.
--Lack of raises and care about inflation.  As I mentioned, I joined in 2020 and thus witnessed the inflation from COVID firsthand. Despite receiving the highest mark on my annual review, I received a 2.5% raise in 2021.  I had heard that there were no raises given in the initial cycle for 2022 since the PE deal had caused disruption; I'd imagine they offered some type of bonus post closing the deal but cannot confirm.

Current Employee · Answer

Qualtrics is pushing more for additional services that will push more value for clients.  An average contract is typically split between 30%-50% Tech, 40%-50% Services, and the remaining percentage is a support package.

Being a US rep that is paid on the technology contract value and a small percentage of the support package, nothing from services, the incentive structure is problematic. The only part of the contract we have control and can really discount is the technology so to be competitive we have to drop tech and take a hit on our paycheck. Otherwise we are typically pricing ourselves out of a deal.

EX: I have a ~150K deal, 50K is technology, 18K is the support package, and the remaining amount is all services. All profit from services simply goes back to the company

The "cooler" technologies that companies are interested in and are hot items on the market tend to be so services heavy, so complex to sell that majority of reps are simply avoiding selling those products as its just not worth the time and effort.

Current Employee · Answer

Overall percentages are good 10%-15% and high accelerators are above quota. The issue is bags were split previously and it is hard to hit quota by selling one product line. Now after the layoffs this is supposed to be fixed in 2024. However, territories are still very lopsided.

Former Employee · Answer

Commission structure was weak when Q was public. Down to 7% commission in 2022 (10% in 2019/2020, 9.09% in 2021, you see the trend) on ARR which is WELL BELOW the standard for SaaS. It’s unlikely going private reversed the downward trend, however perhaps it’s moving back in the correct direction.

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Thoughts on the commission structure at Qualtrics? Does it help or hinder sales performance?