In this, the first solo episode of Run the Numbers, our host CJ Gustafson gives a crash course in sales compensation. He explains how to go about designing sales rep comp plans, covering who’s involved in this process, getting the base to variable split right, on-target earnings ratios, how to baseline core achievement, the role of accelerators, what actually counts as a booking, and comp plan flaws, referencing Salesforce's early comp plans as a case study. He also delves into the art and science of SPIFs (Sales Performance Incentive Funds), explaining why SPIFs succeed or fail, the best times to run one, and how you should structure them. He finishes the episode talking about paying sales reps, commission rates and benchmarks for account executives, and what the total commission stack should look like after you factor in everybody.

If you're looking for an ERP head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.

—

SPONSORS:

Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.

Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today. 

Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.

Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.

NetSuite provides financial software for all your business needs. More than 37,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 

—

FOLLOW US ON X:

@cjgustafson222 (CJ)

—

TIMESTAMPS:

(00:00) Preview and Intro

(01:44) Sponsor - Maxio | Leapfin

(03:58) Designing Sales Rep Comp Plans

(06:09) Getting the Split Right

(10:41) Baselining Core Achievement

(13:29) Sponsor - Mercury | NetSuite

(15:24) Accelerators

(18:05) Paying Sales Managers

(19:21) Case Study: Salesforce - Cash, Years, and ACV

(22:15) What Counts as a Booking

(23:15) Comp Plan Flaws

(25:31) An Introduction to SPIFs

(26:42) Why SPIFs Fail

(29:25) Where SPIFs Succeed

(30:23) Good Times to Do a SPIF

(33:37) SPIF Structures That You Can Copy

(35:28) Strategy Recap

(37:48) Paying Sales Reps

(40:44) The Total Commission Stack

(43:40) Factors That Can Push the Stack Higher

(45:15) Wrap

Get full access to Mostly metrics at www.mostlymetrics.com/subscribe