Why you can't get rid of comp plans

What are the challenges with comp plans, and why can't you just get rid of them? Well, find out in this episode.

Show Notes

It's very compelling to get rid of compensation plans theoretically. There's not a system that can be gamed, and research even show that it might not improve performance - but actually decrease it.

That's why we cover why you can't get rid of compensation plans, what challenges you'll face and how to avoid common pitfalls if you're building compensation plans for the first time.

Creators and Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.

With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.

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[00:00:53] Mikkel: we're gonna talk about comp plans. Yeah. Compensation, commissions. Um, you've done. A post a couple of posts recently hitting on compensation. You know, CRO shouldn't maybe have a comp plan. Yeah. You've talked about the ratio basically for AE that, Sure, you wanna have, you know, this level of ratio, but can the AE actually hit it?
[00:01:19] Yeah. Maybe you need to take a hit on CAC payback. And so this is a big theme. We get a lot of questions about it. a lot of the questions are usually, How do you build it? And we're not gonna do that. Yeah, because you can Google
[00:01:30] Toni: it. No, this is not gonna be a tactical operational, Hey, you know, those three things to remember when building a comp plan kind of set up.
[00:01:38] Yeah. Also, we're not gonna talk about how to automate commission calculation and all of that stuff. Keep doing that in the spreadsheet, by the way. It's the best way to do it.
[00:01:46] Mikkel: But, um, so the, the thing. A couple of years ago, there was a wonderful book that came out called Drive by uh, this gentleman, Dan Pink and this book, really dealt with incentives and what it does to performance.
[00:02:02] And he basically sparked an entire debate in the SAS world around should you have compensation, for sales. And, um, I think the. The immediate response for me also because it's kind of being, you know, reinvigorated that debate again, was, well, sure, let's look at what research says, because I, I don't just wanna take one person's opinion for it.
[00:02:27] And although a lot of the, the studies were really, really compelling in the book, and, we'll, we'll get into that stuff. What I learned is you can, easily find a study showing the exact opposite. Mm-hmm. . So, so there's a bit of confirmation bias happening and what we're gonna talk about. Sure.
[00:02:42] There's a lot of things in, in research, there's a lot of things happening on, on in relation to comp plans, but can you actually get rid of comp plans? That's, that's the key we want to get into. Yeah. And have that conversation. just to have a different perspective on, on this, this issue on a really issue,
[00:02:58] Toni: but No, absolutely. And the, you know, the, the reason why this is interesting obviously is, um, those commissions, those plans that cost a lot of. and are they actually increasing performance? Are they, are they getting you more money back than you're spending? Could you do it differently? Is it maybe incentivizing the wrong behavior?
[00:03:18] Yeah. You know, they, there all kinds of, of those things that are strategically pretty important. and also when you're set up your revenue engine, you wanna think about these things, right? Because, um, You need to be careful what you're wishing for, you know, putting a comp plan in place. Mm. Because you will get exactly that behavior.
[00:03:34] Yeah. Right. And then there might be some, well not black sheep, but white sheep in there that basically like, are smart, you know, not smart, that's probably the wrong word, but are more, thinking holistically and maybe optimizing for the whole thing instead of only for their pocket. But those will be found in between wide sheep and you probably won't be able to scale your organization around those.
[00:03:54] Mm. Um, so really, Being, thoughtful, setting up your comp plan, knowing what you're getting, what you're not getting, and also where the research is going recently. Yeah.
[00:04:04] Mikkel: I mean, let's, let's, let's jump into it, right? Um, so in, in this book, there's a couple of. You know, tests or, you know, So we are talking Daniel Pink, we're talking Dan Pink Drive.
[00:04:16] Yes. by the way, great read. Definitely a good book. Even though you can disprove and he also has reservations that maybe it's not about getting rid of comp plans, by the way, he's, he's set. It is, it's about taking a different look and challenging just how things are established. Right. So it, it's definitely a good book.
[00:04:32] I, regardless, one of the, the great examples in there is called the, I think called the. Problem. Mm. Right. So you have a, a candle, like the one you light with a match or lighter. Right. I think everyone gets a concept of a candle. Yeah. But you know, and then, you have some thumbtacks. So you know, basically the text you can, put into the wall and, they're in a box.
[00:04:55] And then the test is, can you actually, you know, hang the light on the wall, using what you have in front of you? And then the test is, you have two groups. One is, you know, being. A, a compensation to complete it fast. The other is not. And, what the test shows is, if you actually have an incentive, you are slower.
[00:05:16] Toni: Yeah. And really how it goes, right? So you have the scandal, you have the matchbox, and you have those. Those needles tax kind of things. Um, and everyone is like, Okay, cool. Let's try and use those needles with the candle into the wall. Yeah. That doesn't work. So, okay, let's, you know, you know, use the wax to the wall and you know, that doesn't work.
[00:05:35] And the trick obviously is, that the, the matchbox. It's not there for the matches, it's there to be part of the whole setup. So you basically empty the matchbox, you use the needles to connect it to the wall, and then you put the candle on top of it, . And and you know, it sounds pretty funny and, and, and logical once you kind of explain it, right?
[00:05:54] But the trickier is that the obvious choice of trying to just brute force the, the candle against the wall, it's not working out. and really in order to then achieve that, participants needed to show a bit more creativity, bit more, you know, this typical out, you know, thinking outside the box bullshit, in order to actually achieve the task.
[00:06:15] And when someone is being asked to be creative or think in a non-linear path, money actually. Doesn't only not help, it actually makes it slower. Right? Because you're said in this, Hey, there must be a straightforward thing. I'm being timed. Fuck, the time is running out. I need to really, you know, where, you know, how's this gonna work while the, the other side is more relaxed about it and, you know, explores different ways to do it, and then gets to the result much, much quicker than the others.
[00:06:43] Yeah. So in, in this case, you didn't only waste money on incentivizing someone to be, creative. And it also took you longer for them to come up with the right solution. Right? So this is, this is one of those examples where every business leader is like Uhoh. So you know, what are, what are my kind problems in my organization and am I paying people to, to try and figure this out quickly?
[00:07:04] And I think that's a great thing to start thinking about.
[00:07:08] Mikkel: Yeah. And I mean, so there's a lot of examples in the books kind of hammering on this, this point, right? that incentives have the opposite effect of what you would expect. Mm-hmm. Basical. So the, the thing is, he, he lands at a point where, if there's creative work you need to do, then incentives are no good.
[00:07:27] If you have to be just very rudimentary creative, then it's not a great thing. Mm-hmm. versus if it's, you know, you stand on assembly line and you just need to put in the same screw over and over, then it
[00:07:39] does have an effect. Yeah.
[00:07:40] Toni: Repetitive, mundane work. Yeah. You know, incentives. Um, creative, non-linear staff incentives un apparently not only not work, they're potentially even making it worse, right?
[00:07:53] That's kind of the finding there. Um, and again, he's not throwing out all the financial incentives. He's actually saying, Well, if, if you have creatives, it might actually still help to give an incentive, but not to make it an if this than that. Incentive rather make it an after the fact incentive, you know, something that someone might have not, you know, fully expected.
[00:08:16] My immediate question was, Oh, how do you make that scale? I, I don't know how you wanna scale that, but his ideas were like, Hey, let's, you know, we, we figured out a cool thing. Let's all have a summer party, you know, these, these kind of things. And, and there's, there's merit to it obviously. And he even kind of goes into, parenting and raising your kids mm-hmm.
[00:08:33] and, you know, not paying them for bringing out the trash and things like that. Yeah. But, this is how he's differentiating. So really the, the straightforward stuff, and if this and that, you know, if you complete this task, then you will get this money incentive, for the creator staff. Not really an incentive at the end of the line necessarily, but.
[00:08:51] Hey, Oh, now that you have completed it really well, mm, here's an incentive for you. Or in an achievement, a gift. Yeah, something like that.
[00:08:58] Mikkel: Yeah. Right. Yeah. So obviously what I tried to do was, can I find research that looks at sales teams and how compensation works? So there's a lot of research on this, but there's almost no research showing performance without comps, because probably every team has compensation, by the way.
[00:09:18] Yeah. So what I could find. As, as kind of a comparable is, a study around paying students for their academic performance. And it found that yes, it does have an effect and it can be, you know, about the demographic, it can be all kinds of buyers in this study. But it's just to say you can find, you can find the opposite view where confirmation bias comes in, you know, into effect basically.
[00:09:43] Toni: Yeah. So let's maybe jump into the sales side a little bit. Mm. so, Interesting point right there. Couldn't find any re I mean, it's not like you spent weeks and weeks on researching this, right? So there might be stuff out there, but you know, on first or second or third glance you couldn't find anything where there was a piece of research, showing that specifically.
[00:10:03] so that that in itself is already a little bit interesting. I think from a more practical, you know, approach from my side, I'm sometimes just like, okay, which successful SaaS company. Selling software in a competitive market with competitive talents and so forth has done that successfully.
[00:10:22] And I know there are, you know, couple of those companies around, but none of them that I would consider like a breakout mega success. And I hope I'm not, stepping on anyone's toes here. That actually have been able to scale a successful sales organization without relying on commissions. Mm.
[00:10:44] And that in itself is like a very strong signal to me that, hey, there's something happening here that, maybe you and I are trying to explore today. Yeah. Um, that maybe isn't necessarily a academic research thing here. Right. and, and really kind of double tapping on that, it's, taking some of the Dan Pink stuff.
[00:11:01] you. Maybe that's a kind of a cool question actually. do we believe that especially sales, predominantly commissioners sales, and we're gonna talk about some of the other roles in a second. is this a mundane, straightforward task or is it a creative one that you know is actually suffering under commissions?
[00:11:21] Yeah. Right. I would love to hear
[00:11:22] you take 'em.
[00:11:23] Mikkel: I think it. As with anything in life, it's so dependent on the business and how they run the sales process. Right. I think if, if there's a lot of complexity in closing a deal, if there's a lot of interaction with a customer on the other side where you know, you say something and they have a rebuttal and you need to kind of adapt to the conversation, then yes, you actually need to be a bit creative in how you, you choose to tackle fear, uncertainty, doubt, whatever it is, it's certainly not an assembly. You do need to think, you know, tactically, how are you gonna approach a certain account for, for that to close win even? What account should you prioritize? Mm-hmm. , right? So I do think there is a lot of Creativity involved. It's a different kind. Than what I'm used to from a marketing perspective.
[00:12:08] But it's still problem solving with, you know, with a different mindset than just, okay, screw, screw this one in, screw this one in, and, you know, Yeah. So, so yes, I, I do think that you know, logic, reason, and creativity is, is one.
[00:12:21] Toni: Yeah. So the thing though is, everyone out here would probably say like, My product that takes creativity to sell.
[00:12:28] Yeah. Yeah. Right. So what is, you know, where, where, where's the barrier here? And, you know, sometimes I think it's almost, difficult or futile to, you know, have an argument, you know, argument about like what is creative, what isn't.
[00:12:38] I think the other perspective actually is also, you know, not only, hey, is it maybe not helping because it's a creative process, but also are those incentives maybe hurting the organization? number one from a, I'm a sales guy. I get this, you know, opportunity. I can get some money for it. I'll close it.
[00:12:57] Yeah. Do I need to care whether or not that is going to be a great customer? Do I need to care if this customer's gonna churn or cause grief on the, on the customer success side? I kind of don't. Right. I kind of really don't. And you know, a lot of people had that thought before and then they were like, Okay, wow.
[00:13:15] Let's include some kind of churn metrics in your AE comp. maybe it works when you have shorter term contracts. If you have an annual contract. I can, I tried. It doesn't work, you know, because it's, it's too far out. Many AEs will be like, I'm not sure if I'm gonna be in this. Job by in a year from now. So why do I care?
[00:13:36] And then when they are in a job, you know, in a year from now and then get, you know, smacked with that, penalty, then they're basically saying like, Well wait a minute. I think it was a great customer, but, you know, see is messed up. And, and now I get dinged, dinged this favorite word here, by the way.
[00:13:51] Yeah. Now I get D. For, for them having screwed up. No boss, you can't do that now. I'm missing my entire yada yada. Right. So it's, um, it's gonna be very difficult to try and, you know, optimize for that on a, on a, a commission scheme kind of level. Yeah. But you know, once we peel it all back, I think, and, um, you know, having, having read up a little bit and listen to some, some of the thoughts and the space.
[00:14:15] the reason probably isn't the specific makeup of the task or you know, what's good and what's bad for your, for your organization. The reason probably is that you won't be able to hire an account executive right now that is really worth his or her metal. if you are not offering this kind of comp right,
[00:14:35] Mikkel: And you couldn't just have a higher base, so higher.
[00:14:38] Salary
[00:14:39] Toni: you, you could, but what everyone would probably be doing is, instead of, so let's just say we are talking. East Coast and maybe those numbers are even outdated. East Coast US numbers here. So we are really talking about $250,000 a year OT for a mid-market lower enterprise kind of account executive.
[00:14:58] So on target earning, yes on OT is on target Earnings. and, and usually they split 50 50, meaning 1 25 base, 1 25, um, incentives. and here as an organization, because you will still hire some that are good and some that aren't here as an organization and no need to make a decision. Am I gonna pay everyone two 50?
[00:15:19] Or am I gonna pay everyone 1 75 to adjust for the decreased risk, for example. Right. So now using as a great account executive that always hits target and actually exceeds it, gets all the kickers that come with it. And instead of the two 50 usually takes home three or three 50, right? W twos, you know, is kind of the, the US income tax kind of, paper, W two s over 300 K, right?
[00:15:44] Yeah. why. Why would you take the job of 1 75? Yeah. Why would you do that? Right. and you couldn't, you couldn't pay everyone 300 because you would just be paying like wildly above market for everyone. So you're gonna choose something in between. And now, you know, looking at this from an account executive perspective, and then this is a bit economics and maybe it's not fully, you know, the right way to look.
[00:16:11] But from a, from that perspective, everyone that has been hitting below 50% or only has been taking home 1 75 or less, will look at this number and be like, Oh, I like, I like that number. Let's go for that number. which basically means that you're now hiring a bunch of people that are potentially not the strongest sales reps and all the sales reps that at least think of them, you know, honestly of being, you know, better than the 1 75.
[00:16:38] They will probably not go for this and go somewhere else. And those are probably the reps that you actually want to have. Right. So, So I think the, you know, my, my deep belief is I don't think commission is really helping sales reps to sell better or more. It's, I don't think it's better for the organization.
[00:16:54] I just think it's fundamentally difficult to hire these people. Without offering what is currently, sadly, but it is considered market standup. and then getting the right folks in at the right pace, you know, because yes, there will be those folks that are really awesome, and are much happier with a higher base and don't have this whole commission stress hanging over them, and probably will do better work.
[00:17:15] But if you need to hire 20, 30, 50 AEs in a year, Can you find, can you find those specific, unicorns, I dunno, maybe that's a little bit of a, you know, big word here, but those special talent guys and ladies, at that pace, right? I'm not, I don't think so.
[00:17:35] Mikkel: So basically we're saying one of the core reasons you can't get rid of comp plans or choose to ignore it if you're gonna build a team, is you need the talent in place.
[00:17:45] Yeah. And that talent, It's table stakes. It's a common practice for them in order to maximize basically what they take home.
[00:17:54] Toni: Yep. And it's a, it's by now, it's a, it's an expectation set by the market. Mm. It's, I think that's the biggest issue around that. I don't think any kind of research is gonna, you know, suddenly changed the market around.
[00:18:05] I think it's a thing that has been set, and it's gonna be very difficult to get away from that for a while. I'm not sure what the solution. but I think it's gonna be difficult.
[00:18:14] Mikkel: Yeah. And I think to remove a bit of bias, maybe just throwing you a curve ball. You and I spoke, last week as we were preparing for this, this episode, and I said, Are you actually, you know, pro or against comps?
[00:18:27] What, where, where do you stand? I.
[00:18:30] Toni: Well, I think it's a necessity. So, you know, that's, that. I think that, I don't think that commission necessarily drives more better behavior. I don't think so. I think this quarter end piece is good because it basically creates a, truly believe reason for the sales.
[00:18:48] To truly build believed urgency on the customer side. Yeah. You know, that's really helpful. And I think sales is 80% about building urgency, really. It, and I'm an sales guy and someone might disagree and it's, it's about building value Tony and stuff. But at the end of the day, it's kind of, why do they make that decision now versus later?
[00:19:05] Right? And, and you know, coming up with legit ideas around that, that's a lot of time being spent on this. and, you know, having your own comp plan end in two days. You will get really creative really quickly and follow up a lot in order to get someone over the line, right? I think that is extremely helpful.
[00:19:22] I think that, it's fostering a environment of not helping each other, which in sales sometimes is just not helpful. it's creating a lot of friction in terms of. Is it my deal? Is it yours? What do the rules of engagement say? Oh, you know, the manager can solve it. The VP needs to solve it, and so forth.
[00:19:39] I mean, I've been there. Yeah. but it also creates some really nice accountability and you're good and you're bad, which, you know, um, so I think on the AE side, um, I think I'm leaning more against, but I don't think you can actually. Build a large organization without, on the SDR side, so sales development, rep out, outbound mark, sales, basically.
[00:20:01] I'm totally leaning. Like 1000%. Um, and, and the reason is, I think that job is a little bit more mundane. It's a little bit more straightforward. It's a little bit more tough. Yeah. and having, having those, Hey, you know, book this meeting a hundred dollars in my pocket kind of moment. It's good, it's helping.
[00:20:22] And um, and you can also build, and it's terrible to say, but you can build like kickers and spiffs. I think spiff is actually an observation for something. I don't know what it is. Something. Performance Performance improvement initiative. Ff ,
[00:20:37] Mikkel: we really prepare for that one .
[00:20:38] Toni: Um, but the, um, you know, and, and we did this a lot.
[00:20:41] It's like, every meeting that's being booked this week, it's, you know, $50 more, $70 more, and, and you see an increase. Yeah. All of those meetings great. While, I'm not sure, but, but you can see how that is helping, you know, activities to increase in people to get really busy. Right.
[00:21:00] Mikkel: I think also again, it's is important to, to realize even on, on SDR level, you, you still want to go and attract talent and if you high have a high performing sdr, it's a natural progression for him or her.
[00:21:12] To become an account executive, and most likely that's gonna be a really good account exec, by the way. Yep. So, so, you know, again, I, I think it's just important for us to remove kind of our personal opinions and, and just tell you where we actually stand. Mm-hmm. , this is more logic driven. Yeah. At the end of the day, really.
[00:21:28] And that's also how you should approach it.
[00:21:30] Toni: Yes. And then, and I think this is a, I would actually go onto the, the CSM side here for a second. Yeah. You know, this is, I think this is a much more interesting debate. I think all the other stuff is kind of baked, you know, should I give a comp or not? It's like, well, you of course probably can't avoid it.
[00:21:48] I'm sorry. but on the CSM side, the market hasn't been set yet. The market expectation is not to necessarily have commissions. usually the kind of talent you attract there. They sometimes do not like commissions. Maybe this is European thing, maybe it's not so much a US thing. and I actually think that, um, so I did it once, I started paying commission two CSMs, and it, it had all the terrible, results you could wish for
[00:22:18] Mikkel: So what happened?
[00:22:21] Toni: I mean, you know, first of all, and this is good thing, you know, scrutinizing the target. Can I actually even hit 90, 95% GI this quarter? And the things, if you have 90 days cancellation periods, you kind of walk into the quarter and you're like, Well, I couldn't on day one.
[00:22:40] Right. So that was, that was like a, Ah, okay. Yeah. Should we, we should have seen that one coming. Um, you know, you can move around some definitions and so forth, but I think the, the, the bigger issue there then became, CSMs are creating value in all different areas. Yeah. Not only at the stage, also at onboarding and in between.
[00:22:59] and, also, you know about asking for customer case studies. Yeah. Asking for reviews on g2, asking for, you know, maybe snippets that can be used. Asking for, Hey, can you. jump on a call with this prospective customer. They really wanna talk to someone that already is a customer and, you know, figure out how this works.
[00:23:19] there are things about, Hey, do you want to start our webinar series? I mean, there's so many other things that basically the CSM needs to ask for, and very quickly. it became a, Okay, how much money do I get for G2 Review? Yeah. Uh, how much money do I get for this person actually going on to the webinar?
[00:23:39] Yeah. And what if, what if we close a deal from the webinar, and you know, all of those questions and you basically, you know, you basically then start arguing against the VP of that organization because, you know, he or she might see the reason for it, and, and you just get lost in this, you know, endless maze.
[00:23:57] And, um, I can only, I can only recommend everyone listening. Don't do commissions for CSMs. It's a, it's a world of hurt. Now, if your definition of a CSM is more like a, so CSM is customer success manager, If your definition is more like an account manager where the CSM is actually pushing for upsells and asking for signatures and, and it's not this traditional friend of the customer, um, sure.
[00:24:21] Then there's a conversation to be had around commissions, but then, Call that person, account manager, and then you will also get sales people running in those, in those roles. And then it's kind of makes a little bit more sense. But, everything else around the CS MP here, I've been, um, I've been burned by the experience.
[00:24:38] Yeah. They just say it like that and I really wouldn't recommend anyone else to do it.
[00:24:41] It's also a shame to spend more time on the comp plans than initiatives that drive revenue.
[00:24:47] Yeah. And, and sometimes it's healthy. It's good to be double checked. It's good that you know, these folks are asking you as a leader to how are we actually gonna achieve this?
[00:24:58] Because that's a question you get a lot from account executives actually, even in the interviewing process, how many of your folks are at Target? Um, you know, how many are actually have exceeded tied in the last year and so forth. And, and basically that's shorthand for. Um, you know, is the support network around those reps actually working in order to make them successful?
[00:25:18] Yeah. which is obviously super important for the individual account executive. but also for you as a leader, um, hey, is my revenue engine set up in the right way? Yeah. can I ca you know, do I need another? And, you know, once that an AE joins, will that ae get the support in terms of, opportunities or leads or whatever.
[00:25:40] In order to get to Target and so forth. And, you know, that's a, that's a, that's a tricky thing. You need to think through. Yeah. And then if you do feel comfortable, then, then, it's, it's a good, you know, test for you then to also hire mos.
[00:25:53] Mikkel: Yeah. So I'm thinking a bit what would be interesting, So there's a bunch of challenges you're gonna face with plants, and there's no way we can get into all of them because it also depends on how you set them up.
[00:26:06] But what I'm curious to hear is what are some. Watch outs. If you're either either a running comps today or thinking about implementing it, what would you, what, what are some of the pitfalls you would, you know, try and pay attention to in that process?
[00:26:19] Toni: Yeah. so number one, you need to realize that paying your best reps more is the cheapest commission you can ever.
[00:26:29] So what does that actually mean? basically the best reps that are not only going a hundred percent, but maybe 120, 150, 160%, they are kind of paying for, the base salary that all the underperforming reps are, you know, costing you paying that person more commission. It's basically giving you, you know, that performance for 50, 50 cent to the dollar in that sense, right?
[00:26:56] Because base has already been done and the commission skills as it does. so thinking about paying them a lot more for going a lot over, totally do that. Never ever have a cap comp plan. people never achieve any cap you have anyway. Besides. Those one or two times. and, it's, it's gonna be a topic on your sales floor all the time that, ah, you know, plans are capped anyway, so, um, so don't ever do that.
[00:27:27] but also on the opposite end, you do wanna, you know, sometimes I see plans where, hey, this person isn't getting anything until they hit 50% or 70%, you know, basically pay their salary back and stuff. Maybe that works in like SMB motions, where, where that, you know, can, can, you know, fit the, the talent, but especially if you're thinking midmarket and an enterprise.
[00:27:52] You also want to create some incentives for them not to give up on the quarter. Yeah. and you know, you could call it sandbagging. So sandbagging really means, Oh, I have this deal. Maybe it's very, If I were to push, maybe there would, but I don't get any commission for this quarter anyway because I'm failing.
[00:28:10] Yeah. So let's push it over to next. Yeah. Yeah. Right. and, Don't do that. Give, give incentives from the start, you know, get this, get this away. and then the, the other thing is if you're not an enterprise motion, so enterprise mo. So I think what you should consider setting something like that up, and we are getting to some of the tactical stuff here, um, that your sales cycles shouldn't match the cadence.
[00:28:32] So what does that mean? So you're in an smb, you sell something two weeks tops, maybe you have monthly targets, and that's okay. If you're on the mid-market and you have sales cycles that are 30 days, 45 days, 60 days, you know, quarterly target is great. If you're an enterprise and you have six to nine month sales cycles, annual target is the right thing to go for.
[00:28:54] Yeah, right. and. If you, if you're an enterprise guy and have annual targets anyway, then that's what it is. But, um, for a mid-market and below, you know, put things into place that, give them the ability to, you know, catch up. Towards the end of the year, across those quarters, Basic kind of, if they can at the end hit the whole year, even though having not been great, you know, one of those two quarters, they should still be able to get like a massive payout and stuff because fundamentally that aligns them with you as a business, you know?
[00:29:29] Yeah. You want to, you want to have this thing end on the calendar year and the right. so I would kind of, I would think about these things. Yeah. And, and don't be stingy with your best guys. And, and ladies, it's usually those are the cheapest ones.
[00:29:41] Mikkel: I think there was some good, good takeaways. Hopefully also helpful.
[00:29:45] like we said in the beginning, there's a ton of things you can find on Google in terms of how to actually build it. Yeah. This was really intended to give a different perspective. Maybe not get lost in this, Should we even have a conversation? It really depend on, on the business at the end of the day.