I've been talking with some peers lately and wanted to get your take—are you seeing this in the market? Our fiscal year started in May, and about a month ago, we received a draft comp plan with some pretty big changes: Quota increased by 55 % Commission rate dropped from 12% to 6% Accelerators reduced from 22% to 14% A few of us raised concerns internally, we haven't received final comp plan. But when I mentioned it to 2 other friends at other companies, they said they’re seeing similar shifts. Is this happening across the board right now? Curious if you’re seeing the same trend with your network or clients.
Here's a point I dont think that we sales professionals make enough when dealing with this (or really any) comp plan changes.... in WHAT OTHER Profession can you do a good to great job, and have your compensation effectively decreased???? A higher quota with smaller commissions is essentially a demotion. And that's on top of the risk you take just by being in Sales...it makes no sense.
I saw this at companies a few years ago, and seems to become increasingly prevalent when tech and sales momentum reaches critical mass. Eg, at my last company, while we were building the US sales motion, we used to start accelerators at 50% of your number with increasing accelerators to 125%. Once we reached PMF and a number of major logo's, they changed the comp plan so you effectively had a decelerator where they wouldn't give you full comp until you hit 50% of your quota, which was crazy. The entire sales team has now turned over every year, for the past few years.
Would love to see what the turnover is after year 1 of this comp plan across sales and across reps who made annual quota 1 year previously. I bet it increases, but not hugely.
100%. Bigger targets, smaller territories, very little adjustment to base or OTE = lower commission rate. Gating accelerators adding more hoops to jump through to qualify.
Yes. Had a few top reps leave this year when comp plan changed. Still a strong plan, but definitely saw changes that would affect top producers (the most).
Yeah, we regularly see comp plan changes and they don't typically benefit the seller, TO SAY THE LEAST! That said, these changes seem borderline ridiculous. If you're going to increase the quota by 55% AND drop the commission rate in half, essentially that means you're reducing the payouts year over year by 75%, which is insane. I'd also comment on the accelerators but frankly nobody will likely need to worry about accelerators with these comp plan changes.