George Beal and Everett Rogers at Iowa State U. Original purpose was to track the purchase patterns of hybrid seed corn by farmers.
VP Sales told me find the average comp in your market and add15% to attract high performers.
Low end – retail car sales
In addition to annual upfront value, talk about understanding how to assess the LTV
I'm talking specifically about what to comp on Ltv - avg mrr/churn. ARPU ave rev per user Coca Margin Velocity Stages of funnel
Just announced that we passed our 4,000 th customer Skok is on our board – consider myself a student of his work/blog so you’ll see some repetition
All hunters – no farmers
Sales Comp Plans should not be static – needs to evolve with the organization Needs to match your strategy … may look like we knew what we were doing, but we acted fast when we realized things were wrong and tuned the model regularly
This stage is all about discovering the product market fit – and we did that. But now couldn’t enforce those learnings
Establish Target Pay - Basics Point of Excellence Top 10% of performers Target Total Comp (TTC) Aka: On Target Earnings (OTE) MIX Ratio of base and incentive relative to TTC Base Target Incentive Upside
Comp Philosophy for Target Pay* Lower target pay Higher target pay * Sales Compensation Made Simple World at Work Press P.42 40 th 50 th 60 th 75 th Percentile 1. Degree of industry stability Rock solid High Moderate Low 2. Desired business results Very likely Probable Difficult Unlikely 3. Expected employee performance Low Average Stretch Exceptionally high 4. Productivity level Low Average Above average Very High 5. Talent supply Abundant Adequate Limited Scarce 6. Employee mobility Low Modest Some hiring away by competitors Very Competitive
Excessive Adequate Light Lean
Mix and Upside * Sales Compensation Made Simple World at Work Press P.42 90 80 50
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Sales Model HubSpot http://www.forentrepreneurs.com/sales-complexity/