Q: How can I better motivate my sales team?
A few thoughts:
First, make sure at least 1 or 2 of your first 5-6 reps are making a lot of money. This sets an example for everyone. Set up a comp plan so the top 10% of your reps make COIN. An oldie but a good on that here:
Your #1 Sales Rep Should Be Driving an M8 Convertible By Month 12. (And Not Buying a Panerai Watch.)
Second, set sane quotas — and make sure most reps are hitting quota. Few things are more demoralizing than when no one is hitting quota. This doesn’t mean lowering quotas (at least, not too much). It does mean setting sane quotas, and having fun when folks exceed them. It also means cutting loose folks who after a sales cycle or two will never hit quota. They will just drag down the team. Remember, it’s almost always better to have fewer good reps than lower the bar. Concentrate your leads in fewer, better reps and you both close more AND your reps make more. Eventually, sales really is a capacity game and you just need heads to hit the plan. But it’s not that simple for quite a long time.
Third, celebrate the wins. Sales is hard. Maybe “ringing the bell” isn’t your thing, but however you do it, make closing customers, especially top logos & record deals — a big deal. Make your reps that close heroes. The best sales teams are a culture of wins and winners.
Fourth, make the OTE (“On Target Earnings”) market correct. Done right, sales reps shouldn’t be that expensive in the early days. First, their bonus is only paid out when revenue closes. And second, if they achieve decent quota attainment (see point #2), they should always bring in 3x+ more than they take home. Since OTE (i.e., base + bonus) is only earned when quota is 100% achieved — there’s no need to be cheap here. If you need to make an adjustment, adjust the quota up a bit. Not the OTE down.
Fifth, and most importantly, make sure your sales leaders can recruit good reps under them. The best sales cultures come from the CEO, yes, but also in very large part from the VP of Sales. If she/he can recruit a few good reps under her, that make good money, and feel good — the team will almost magically scale around that pod of success.
And a few bonus tips:
Six: Don’t Pretend. When times are tough, start-ups often pretend the sales team is doing well. They do this by excusing low quota attainment as “ramping”. Yes, ramping is real, but it has to … end. It has to ramp up. Startups also pretend by setting super-low quotas. They do this by excusing deals closing too slowly as “just pushed out”. By celebrating pipeline as an accomplishment, rather than closed/won. Don’t do this. Because … everyone knows. They know you (and/or your VP of Sales) is pretending. Yes, it may feel like it helps to hold the team together. But anyone that can’t deliver in sales ultimately needs to find a new home. You are better off concentrating your leads and time in fewer reps that can close more, learn more, and make more — than spreading too many leads across too many reps that can’t close.
And if your VP of Sales is pretending? Trust me. It’s time to find a new one. And maybe even just move on for now without her/him.
Seven: Invest More in Training. There are so many benefits in really training your reps, especially making sure they hit the ground running. It decreases churn.
Eight: Promote Faster, and Make At Least Half Your Manager Hires Be from Promotions. Err on the side of promoting SDRs to AEs faster, if you have room. Err on the side of taking some risk on your top AE become a manager, if they want it. Once you hire Directors, Managers, and more — force yourself to source 50% of them from your existing sales team. That will show everyone they have a shot.
(note: an updated SaaStr Classic post)