Comp Drives Behavior: Motivating teams to sell, no matter what their role - Part 1 in a series
- Robin Seidner
- Mar 26
- 4 min read
For as long as I can remember, I’ve felt like I need a t-shirt, or a coffee mug, or just a sign I can reference, which simply states:
Comp Drives Behavior
This simple phrase has a lot of good applications, from the high-level corporate to the individual contributor, and it should always be considered when thinking about how you want to motivate certain behavior across your team. Whether this is human behavior, or simply a result of living in a capitalist system, I don’t really know. When you are thinking about trying to drive behavior though, it’s important to align the comp with your goals, and you must have skin in the game.
Let’s dive into some examples:
Why commission-only comp does not motivate teams to sell
Motivating sellers with compensation is the most obvious example of what I’m talking about. Sellers typically get paid to sell stuff, so the more they sell, the more they make. But there are nuances here. For example, I’ve been approached before by companies looking for commission-only sales assistance.
In theory, higher commissions feel like a good deal to a company looking to bring on commission-only sellers. You only have to pay for results being the biggest, most obvious benefit. The issue is that the comp doesn’t usually match the effort a seller needs to put in to sell your product or services:
They have to invest a lot of time to get competent on what you sell, and invest time in cycles with potential clients.
You’re asking them to lean on their network without any benefit to them—in fact, I’d argue there are negative consequences to leaning on a personal network, but that’s its own blog topic for another day.
So, in this case, though the promise of comp is there, the opportunity cost and the effort don’t match the gain. Plus, you don’t have any skin in the game—you’re not doing anything that will motivate teams to sell. I have not seen or heard of arrangements like this that work in tech, only in MLM arrangements like Mary Kay or Herbalife.
The fix: Include a base-pay in comp plans and attach higher margins to the product or service areas where you want to see growth. Basically, hire a salesperson, or give a contractor a base!
Ways the wrong comp structure kills seller motivation
I’ve seen plenty of companies fall short of revenue targets because they can’t figure out the right motivation/comp mix for sellers. Here are just a few examples of questionable comp frameworks:
Comp but no quota retirement: Basically, the message to your sellers is “You can sell it but it doesn’t help you get to Club, get to your accelerators or do any of the other things you need to do to achieve quota (which in today’s tech environment is more difficult than ever.) This could incentivize with smaller add-on services or products, BUT they have to be a dirt simple add-on sale. Your sales strategy team might think a comp-only plan is a good approach because they don’t have metrics to base quota targets on. The fix: Guess what? If you design a compelling comp structure for the new business line, you’ll have metrics to base targets on!
Split commissions: When you’ve got co-primes or sellers from an acquisition or other part of the business, they likely work a deal with the account owner. The message here to both sellers is “Hey, work hard on a deal and you get only 50% of the deal value.” Not sure when anyone ever thought this approach would motivate anyone to sell anything. The fix: CROs and sales leaders - if you’re trying to make split commissions sound amazing, stop now. Go to your executive leadership and get them to invest in full commissions to drive a growth area. Sure, double-comp is painful for profits, but it doesn’t have to be forever.
Renewal commissions the same as net-new: Comping sales people the same for a renewal as for net-new business not only reduces your ability to grow accounts, but is a disincentive to expanding a client account footprint. A good example of this: I used to manage a Salesforce Marketing Cloud partner that was part of a much larger marketing services company. This company had major accounts on the print business side, a dying business. But, even if the renewal was a bit smaller than the previous contract, these sellers had no interest in learning something new to sell, or even to partner with the co-prime, because their margins still held with a renewal. They didn’t have to do anything different to get to their quota targets. The fix: Reduce commissions on renewals. Bonus on re-capturing attributing revenue into new areas of the business. Change the comp structure to motivate behavior and get sellers to push for deals in your growth areas, not take the easy button of your dying dinosaurs.
How Partner Diva can help
If you need help developing comp plans for your Go-To-Market strategy, let’s connect. I’ve helped numerous teams find the winning balance. An Executive Advisory engagement is perfect for this kind of strategy work.