Page 79 - The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to go from $0 to $100 Million - PDFDrive.com

8
Motivation through Sales Compensation Plans
and Contests

Whether you're a CEO or a VP of sales, the sales compensation plan is probably
the most powerful tool in your tool chest. In thinking back to the critical
strategic shifts HubSpot made as a business, most of them were executed via
changes to the sales compensation plan.

“The sales compensation plan is one of the most effective tools for the CEO
and VP of sales to drive business strategy.”

People often ask me, “What is the best sales compensation structure to use?”

That is a very complicated question. The ideal plan is contextual not only to the
type of business, but also to the stage of growth that business is in. In the first six
years of HubSpot's growth, we utilized three different sales compensation plans,
each of which was appropriate for the stage the business was in at the time.

I've provided a description of these plans ahead.

Plan 1: The Hunting Plan

The first compensation plan we ever had at HubSpot was very oriented toward
“hunting” new customers. It was the right plan for the time. We had 100
customers. We were at an annual run rate of barely $300K. We needed to acquire
customers quickly so that we could accelerate our path toward product/market fit
and gain a deeper understanding of what could make our business model
sustainable!

The first plan paid each salesperson $2 upfront for every $1 of monthly recurring
revenue they brought on. For example, if a salesperson closed a customer on a
$500 per month subscription, the salesperson earned a one-time $1,000 sales
commission for that deal.

To protect the company from customer churn, we implemented a four-month
claw-back on the commission. This meant that if the customer churned within
the first four months, HubSpot took the entire commission back (deducted from