The Practical Guide to Piss Off Your Best Reps (w/ Antoine Fort, Co-founder & CEO of Qobra)

Want to lose your best sales reps fast? Screw up their comp plan. In this episode, we sit down with Antoine Fort, CEO of Qobra, to dig into the classic mistakes that drive top performers out the door. We talk about why overcomplicated plans kill motivation, how underpaying top reps quietly drains revenue, and why immediacy and trust are non-negotiable if you want comp plans to work.

We also get into clawbacks, the mess of usage-based and outcome-based models, and what really happens when you ignore the value of your top reps. Antoine explains why accelerators, recognition, and clear career paths matter just as much as salary, and why forcing high performers into management usually blows up in your face.

• (00:00) - Introduction
• (00:54) - Antoine's Background and Qobra
• (07:01) - Challenges in Sales Compensation
• (10:49) - Simplicity in Compensation Plans
• (14:16) - Immediacy and Trust in Sales Compensation
• (18:57) - You're Underpaying Top Sales Reps
• (30:31) - How to Keep Your Best Reps Happy
• (39:26) - Commission on Renewing Customers
• (41:18) - Retention Strategies for Sales Reps
• (44:35) - Hiring New Reps: When and How
• (46:02) - AI and Usage-Based Pricing Challenges
• (01:00:39) - Differences in Commission Structures: US vs Europe
• (01:04:32) - Next Week: Health & Mental Health for Founders

Creators and Guests

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

Guest

Antoine Fort

Co-Founder & CEO @Qobra

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.

If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.

The Practical Guide to Piss Off Your Best Reps
===

[00:00:00]

Introduction
---

Toni: Today I'm talking with Antoine. He's the CEO of Qobra. We talk about the terrible details of designing your comp plan for usage based and outcome based models, which I know many of you guys are suffering from. And we talk about how you can make sure to really quickly piss off your best sales reps and drive them away and now enjoy

Antoine Fort: sales compensation is a key motivation driver for sales reps. You want to design a sales compensation program that is really gonna drive motivation and you want them to understand it. And the reality was, when you're running comp in spreadsheets, the reps, they've got high chances that they don't understand well enough.

The complaint, instead of driving motivation, you're creating frustration when you're a sales rep. Money matters a lot. Don't mess with money and, and pay them super well because otherwise every time they're leaving it's a hell lot of lost revenue.

Toni: We have a bunch of things we want to, we want to discuss here today, Anto one.

Antoine's Background and Qobra
---

Toni: Uh, but before we do all of that, what's your story? What's your background? Kind of why build a. I would call [00:01:00] it a commission calculation business. What, what got you there?

Antoine Fort: Yeah. That's a good shortcut. Uh, so, and by the way, thanks very, thank you very much, Tony for, for hosting me. I'm very happy to, to be part of this episode.

The audience should know that, uh, I started as an engineer, so I did not start, uh, neither in sales, nor in rev ops. So I started as an engineer. And the one thing that you usually like when you're an engineer, it's, uh, solving problems and trying to find tech solutions, uh, to solve problems. I think entrepreneurship has always been somewhere in, in me.

So I've always launched, uh, you know, projects when I, when I was at, uh, in engineering schools also, uh, with apps that I was, was trying to, to sell or to get users. So I got into sales training through someone that, uh, was a former sales director at, at SAP. So I met that person. He, he taught [00:02:00] me the basics of sales and I started to spend some time with him thinking about, uh, okay, so what are the problems that salespeople have or sales managers that could be worth solving? That's where engineering and sales met. Uh, when I discovered that sales commissions calculating spreadsheets were just like a mess, a huge hassle for, for everyone. And I also discovered, uh, the relapse function, which at that time, so it was five years ago, uh, in Europe was not that big. So I recall in Paris, uh, because we were based in Paris, uh, there was a very small group of less than a hundred rev ops for start in startups in, in, in France.

And now this group is much bigger. It's like over 3000 people. When I discovered this role, which was much bigger in, in the us and you could read a lot of literature on that role, uh, I thought, okay, a rev is really the engineer of sales organization. It's, uh, the person that, [00:03:00] uh, he is helping implement the right processes, the right tools to increase the productivity, increase the performance of the sales team.

So I really felt like this was a natural place for me to belong to. So I think if I was not a, an entrepreneur, I would probably be working the rev

Toni: ops, the, the engineering background kind of gives a little bit away, right. I think, I think that fits extremely well. How, how does, how does the whole Qobra story fit into this though?

Where you then, you know, he talked to this SAP guy and he was like, oof, Antoine, you know, what this commission thing that really needs solving or kind of, how, how did you, how did you land with that?

Antoine Fort: What happened to me is what happens to a lot of entrepreneurs when they start it's, first you have an idea, which was not really.

Self commission software idea. It was more around, um, performance management, also stuff related to salary management, but it was not commission management. Mm-hmm. Quite far from it at the beginning. And then I discussed with that [00:04:00] guy, uh, I had the curiosity, curiosity to discuss with a ton of different people that were in management position, that were in IC position, that were entrepreneurs.

And that's how you get a sense of if a problem matters or not. And that's how you have your whole pitch and idea changing and converging on something that people need. Because the first idea that I had, nobody needed that. Mm-hmm. In, in the way I was describing it. Mm-hmm. Uh, and that's how this sales commission idea happens.

Um, the, the other thing is when you launch a project, when you launch a company, you don't want to be the only one in your category. At least you don't want to be the only one in no category. Mm-hmm. Because if you are in no category, it probably means that either you're a genius and you found something way before everyone else, and you might make a lot of money, but in most cases it means that [00:05:00] nobody's gonna buy.

So when I was looking at the market, I saw that there was some pri so public companies, uh, like exactly that were, uh, then acquired for, uh, 600 million by a private equity firm. There was other signs that it was an existing market that just needed new solutions because new companies, uh, worked differently. Now, maybe I can just share also a, a, a nice story about commissions because, uh, that's how we got the name, the cover name. Um, so. It happened in, in India, like, uh, 78 years ago, uh, there was a lot of snakes, so cobras in the city of New Delhi, and the government decided to implement a commission, should they say.

Uh, so dead snake brings you money. If you kill snakes, if you keep cobras, you're gonna make money. And that worked well at the beginning. [00:06:00] But, uh, some clever folks decided to raise cobras at home to then kill them massively and make more money. And when the government heard about that, they were like, oh, that's not what we wanted.

So they shut down the incentive program and the people that had dangerous snakes at home released them in the streets, which happened to have more snakes after than before the incentive program. So if you type, uh, Cobra effects on Google, there's a Wiki video page, uh, which describes the Cobra effect as when an incentive program provides the opposite effects of what was or what was originally intended.

Of course, we don't want that for our customers. Uh, we want, uh, exactly the, the effects that they want with their incentive plan. But we like the story. It was fun. So we said, okay, let's bring this into, into

Qobra.

Toni: There's obviously kind of this meta problem of people incentivizing in the wrong way, and I think it, it makes total sense now that you kind of said you wanted to come from more of a performance management [00:07:00] perspective, potentially.

Challenges in Sales Compensation
---

Toni: Um, but then, you know, what, what are the things that then triggered for people when you talked about this that then, you know, resulted in, oh shit, I need a tool. I need a different tool.

Antoine Fort: The two main things that make this topic matter for was everyone that's, uh, is running a sales team is sales compensation is a key motivation driver for sales reps.

So you want to design a sales compensation program that is really gonna. Drive motivation and you want them to understand it. And the reality was, when you're running comp in spreadsheets, the reps, they've got high chances that they don't understand well enough the comp plan. So instead of driving motivation, you're creating frustration.

So that's the first reason. And the other reason is sales compensation. And mostly, it's mostly true in, in, in sales companies, but it's the largest go-to market investment must be to big companies make mm-hmm. Far ahead of marketing, for [00:08:00] example. It means that it, it has a huge impact on the p and l and if you make errors in spreadsheets, if you are almost unable to run, uh, analysis, you understanding, um, the ratio between what you're paying and what you're closing.

In revenue, if you're not able to, to understand the financial impact of sales compensation, you, you are messing up your p and l. So CFOs, they hate that. And that's why we, we, we mostly speak with CFOs, CROs, and, and of course ops, which sits, uh, at the crossroads.

Toni: I mean, I still remember, you know, doing commissions first myself, then handing it to other people in my team.

And at some point we got to the point where we were like, I mean, it's always a hot potato. You never, you, I feel no one actually wants to own commission. It's always being handed around. And we were, we were opening a bottle of champagne, literally, uh, when we were successfully pushing this to finance. And then finance had to do it [00:09:00] because of like, it's not only a mess and a lot of like, you know, work around this, but it's also, we, we always felt a lot of emotional stress getting it right.

You know, the, the backlash from the sales reps when, when we didn't. And, um, and ultimately when everything went smoothly and perfectly, no one was coming over and patting us on the shoulder and like, oh, Tony, well this commission run. Well done. It was always only when something messed up. But, you know, that's, that's I think kind of the, the ugliness around the problem and kind of fixing that.

I think that's, um, absolutely worthwhile. I think though, right? Uh, everyone here probably either has received a commission or has created compliance and structured all of that stuff. I think really, you know, interesting part of the conversation here is actually really about, well, from, from your perspective, from your experience now so far, what is it that most people still simply get wrong about commissions, right?

[00:10:00] What, what, what stuff is still messing up despite this being number one, such a big item on the p and l as you just mentioned, and it's super popular also, right? Kind of what is it that people are getting wrong

Antoine Fort: and, you know, um, we'll maybe start with the, the obvious, uh, few answers to, to that question. So, so the borings boring part of the, of the answer, and then we can switch to something a bit more controversial.

Should I say? I, I'd say the first one is not being interested enough in sales compensation. So if you don't look at it as something which is, um, critical to both the, the top line, because this will be driving motivation, behavior, and the bottom line because as I said just before, it's a big cost. Uh, then you've got no chances to, to.

To be successful at designing competition plans. So that's the first thing.

Simplicity in Compensation Plans
---

Antoine Fort: The second one is don't overcomplicate. So a lot of companies, um, they, they really create too much complexity, [00:11:00] which is not needed. And the consequence is that the reps, they won't be able to figure out easily how much they're gonna make at the end of the month.

It is real problem for, because as I said, sales comp is between sales motivation and cost management. So if you only care about cost management, you lose sales motivation. When I'm speaking with the someone that has a very complex complaint and I'm, I'm trying to maybe give ideas about how they can simplify, they, they, they always tell me yes, but if I, uh, remove that, then uh, the reps won't be incentivized to pay to, to like.

Always ask the customers to pay the invoices on time and we will have cashflow problems. Or if I do this, there will be another consequences out there. Mm-hmm. But the reality is every company has these same issues. You know, you need to close business, you need to renew your customers, you need to [00:12:00] retain people, you need to have good cash flow.

But the solution is not necessarily, and actually in most cases, the solution is not the compliant, it cannot be the same solution to all these problems. So you of course, need to have systems, processes, a way of working that makes you a healthy business on all these aspects. But don't try to incorporate everything.

It's like if you were trained to do a pizza with every ingredient that you have in your, in your fridge, it's not gonna be the Napoli pizza. It's impossible. And that's how you get to Hawaiian pizza and that.

Toni: Yeah, that's, well, and some people like that too. But the, the, the funny thing is, so number one, I've seen this across the board again and again and again.

People think that commissions and the destruction, the scheme behind is the solution to everything, especially comes from like finance people, right? It's almost like, Hey, um, sales reps are donkeys and here's a carrot. Let's just go where the, where the carrot is now, please. Right? So this is one thing. And then the other [00:13:00] thing.

And I've been doing this thing myself, like I, I can't even blame other people, but overcomplicating this stuff. Um, and it took me like two or three years to realize if this thing is not simple enough for these guys to get it, then it will simply have less of an impact. It will just not matter. Right? You will, you pay a lot of money, but the translation between what you have on the piece of paper and what they're doing will just not happen.

So you have a lot of. Loss in the conversion rate, if you will. Um, and basically the team and I, we implemented a super simple rule around this. We basically said when we went out drinking with a sales team, uh, after five beers, sales reps still need to tell us how their comp plan works and what they need to do in order to tie it.

That had to happen. If they couldn't do it, we had to go back to the drawing board and change the commission plans for next quarter. So it's like absolutely valid advice, by the way, on this topic, which, yes, you're right. I think some of those things are the basic pieces.

Antoine Fort: Yeah. And some people don't even know their name after five beers.

[00:14:00] So, but

Toni: yeah, that's true. But still in the end, the commission they knew. They still knew. Yeah. You know? Yeah. Sales people. Yeah, exactly. So what, what else on the, on the boring side, just so we are kind of not forgetting any of the, the basics before we go into some of the other areas.

Immediacy and Trust in Sales Compensation
---

Antoine Fort: So, uh, in terms of basics, there is, uh, wonder important, which is immediacy.

If you are telling a rep, but your close now is gonna bring you money in three months compared to it's gonna bring you money on the next payroll, it makes a difference. And in the end you will be complaining because all deals are closed on the last month of the quarter, for example. Yeah. Uh, if you pay commissions when the client has paid, yes, when the deal will be closed, they will do everything for the customer to pay.

But before the deal closes, there will be less drive for them to close that deal right now. So immediacy [00:15:00] matters a lot and, and maybe the less obvious part is, um, really one error can kill the trust for. An entire period of 12 months from now until you get, again, 12 months without errors. So really be careful about every single error because otherwise you're gonna have the reps always, always, always asking and for good reason because there's been a, an error once.

Toni: Y you just brought up an interesting one and, you know, probably some folks listening are maybe considering this once in a while. Should you be paying on cashflow or should you basically kind of when the invoice is paid or should you not be doing that and you're connected to just, you know, to the immediacy piece specifically, right?

Because you close a deal and maybe you have 30, 60 day terms and you know, then the end of the quarter and suddenly it's half year later that you actually see the cash from that. But, but are there other reasons why you would say like, well, you should or shouldn't do it?

Antoine Fort: So obviously every context is different and um, if there is a very [00:16:00] tight, uh, cash flow context, what I'm gonna say just after, uh, probably needs to be adapted, but.

So, so you understood. I'm mostly in favor of paying commissions and booking as a general rule. And the reason is, if you think about every acquisition cost that you, that you make, you are paying marketing before the customer pays. Of course, like far before, you are paying base, base salary no matter what.

So you are already making so much acquisition investments that you pay ahead, retaining the commission and just the commission, which is significant part of the acquisition cost, doesn't really protect you from a finance perspective or at least very partially. While at the same time, you won't probably be competitive as a sales organization in terms of hiring, and you will be delaying a lot the motivation, uh, because there is no immediacy in the reward for the [00:17:00] reps.

Yeah, so general rule pay commissions on the booking. I totally agree.

Toni: I, I mean. So I tried this out once. Um, and basically what happened to us was, uh, first of all, a bunch of reps complained, right? Obviously. Um, but basically we, we landed at, we need to choose what we want the reps to do because if we want them to do cash collection for us, then, then that's what we are incentivizing.

Basically what what happened is they closed deals and then they were nagging the customers that haven't even gone through onboarding to pay their bills and pay the bills right now. And if they still haven't paid the bills, then call them again and make them, you know, and that wasn't great customer experience, number one, and also wasn't a great use of their time.

We felt. So kind of, we took this away and then in the end, what we really realized is, and this might be true for some folks listening, is you building those rules, you know, to prevent some bad apples from gaming the [00:18:00] system. So we had one or two sales reps over the course of, I dunno, hundreds. Um, they were basically, um, you know, not not doing the right thing and, you know, for the company here and, and doing weird deals or maybe dirty deals or fake deals.

Um, but the way to manage that is not to change the commission plan. The way to manage that is to file those guys. Um, and we, we eventually, we landed at that conclusion basically like, Hey, you know, it's, we're not incentivizing the right behavior by doing it on cash. Um, it happens once in a while that someone is dropping a deal, right?

It, it just happens. Um, but the real thing you wanna watch out for are those, are those bad apples here, right? Um, yeah, absolutely. Okay. So I think we kind of ticked off a bunch of maybe the more standard stuff, but people are definitely sitting out there and, and, and thinking about this a lot. Like what are the, what are the things people don't think about that much, but still play a big role here?

You're Underpaying Top Sales Reps
---

Antoine Fort: One of my like big convictions, uh, [00:19:00] when it comes to sales compensation is, uh, most companies are. Under paying their best reps a lot. Really a lot. And this is a problem because your best reps will eventually be leaving and, and when you lose the top rep, that person is gonna be replaced by a medium rep.

On average. Yeah. On a, an average rep on average, that's normal. So you can lose a lot of, um, a lot of, of revenue in it. And the way I like to think about what's the right first, OTE and then accelerators for, for sales compensation is thinking in terms of acquisition costs. Again, usually we say that, um, the on target earning, so base plus variable, so quota should be five times, uh, base plus, uh, plus variable.

So let's say that you have an an AE 200 KOTE, so it's more US numbers than the European numbers. Uh uh. I know, [00:20:00] but let's make things simple. So 200 KOTE. 1 million quarter, and then you have other acquisition costs. So in the end, if you make the whole acquisition cost calculation, you are supposed to land somewhere between 12 to 18 months payback.

So of course you need, you ideally want to be below 12, but like the reality is it's expensive to, to, to, to close customers these days. When you are thinking in terms of acquisition cost, it can give you really a, a, a good definition, a good calculation of what should be the ot. But then on top of that, when you think about someone that is really performing way above the others, so someone that is doing Triple Co, so I'm exaggerating, but some people just crush the numbers.

Sometimes it's. Way [00:21:00] more, um, profitable, even with super strong accelerators. So like if you are 150% of your targets, you are paid 200% variable. This is, this is very, very strong accelerators, but if you make the calculation, you will see that this rep is much more profitable than the others.

Toni: I think this is something people just generally miss.

Right. I think, you know, there's one way to think about this calculation and say like, okay, wait, if one rep hits a hundred percent, every additional percent that they're closing, like could be actually be closed or should be maybe closed by someone else, right? That's how you think about it. But it does this one rep and you don't need to pay someone else's base salary.

So you kind of have a lot of cash suddenly left in order to incentivize this over performance. Um, I feel like, right. The other thing is actually in reality. Probably most of your reps aren't at a hundred percent, they probably [00:22:00] are 80% or 70% kind of the, the average is actually much smaller, right? So if you have someone hitting 150% and doing that consistently, that person's actually doing the work of two full-time reps like in, you know, base salary and OTE combined.

And in that sense, the cost that you're paying for that revenue for that rep is a lot smaller than if you had two reps hitting 75, 80%. Right? Um, and, and basically that is a way to think about, well, geez, I actually have a lot of, a lot of money left to distribute here. And if you don't think like this, really what you're doing is you're saying, well, let's just have my overperforming reps substitute the cost for my underperforming reps, right?

Because then suddenly everything pans out again. But I think that's silly. I think this is, you know, we're talking about the ways to kind of lose your best reps. I think that's a really great way to lose your best reps [00:23:00] by taking their achievement, being cheap on that, and then using that to subsidize, um, other folks around you.

Right? Yeah. I mean, so this, this was kind of one way, one way to look at this, Antoine. How, what are other ways to, to try and, you know, some people might just not be convinced, right? Yeah. That you and I are making kind of a case for the, for the top rep. What are other ways to think about it?

Antoine Fort: Then, maybe just to add something on this base versus variable calculation.

So actually, if you look at one oh rep, the base area of that rep is not only his or her base area, but it's also all the other costs that you will be having no matter what, such as marketing, sales, tools and so on, that you need to divide between all the reps. So actually the base will be very strong. The variable not that big.

So if you triple variable for someone that is outperforming, in fact, you're not creating [00:24:00] that much additional cost while that person might be going, you know, to double the revenue growth. And, and that's where this, um, profitability of best reps, uh, it restart to kick in. Yeah. So I, I wanted to add this, but one of the other reasons why, uh, that I like to use when, when explaining such is imagine you have your best rep leaving.

What happens again, it's that person is gonna be replaced by, by an average rep. So you have the cost of replacing that person, training that person, that person ramping up where it's only a ramp quota. Uh, so not a normal quota risk of failure. And even if everything goes well with an average rep, you still have lost revenue compared to the [00:25:00] best reps.

Yeah. So you really need to keep your best reps and money is not the only motivator there. There's other things, and you probably come, come to that a bit later, but when you're a sales rep, money matters a lot. That's just how sales reps are. Yeah. And we cannot blame them for that. So don't mess with money and, and pay them super well, because otherwise every time they're leaving it's a hell lot of lost revenue.

Toni: We had one story where I know some rep, and this was really one of the top reps. Um, and they're starting to act and become divas. Right. And, and you sometimes catch yourself trying to please everything because you really don't wanna lose these guys and, and girls actually, um. Basically at one point I said to my CEO, uh, you know what, it would totally make financial sense to us to give this person a new phone and a new laptop every quarter.

It would be absolutely fine. There's like nothing speaking against that at all. And once you [00:26:00] start having this mindset, you need to be careful, obviously, right? Um, but once you start to have this mindset, I think then you're starting to think correctly about those producers, right? Because as you said, um, okay, top rep leaves you need to hire probably, uh, a bunch of people, like three or four people to compensate with the ramp quota.

Then some of those guys will never get out of ramp. And then what are the chances that some of those actually end up being a top rep actually replacing that person? Maybe what, 12 to 18 months later. I mean, it's insane. It's like literally insane. Um, and thinking about all the additional costs and, you know, we haven't even talked about recruitment costs and time.

Yeah. I mean, it's very quickly, like a million or two, uh, trying to replace that person. Um, and that's, that's pretty crazy to think about honestly. And then doing anything you can in order to prevent that from happening. I think that's, um, that [00:27:00] seems to me like a fair gamble. And yes, you need to be at a certain scale.

You know, if two sales reps that you know, these, these numbers don't really make sense to you, but if you have 50 sales reps, a hundred sales reps, like those numbers actually, you know, really work out and not only in a spreadsheet.

Antoine Fort: And yes, like what we are saying here is, is not too. Do everything that divas are asking for far from it.

Because one of the most precious thing you have as a company is your culture. And if someone, even the best one is hurting culture. It's like in a, in a football team, you know, even if your top player is hurting culture, your team might be better without that person. Mm-hmm. But there's really a gap between like, acting in such, um, behaviors.

So opposite to the culture that it hurts it. So of course you're not saying do everything your divas are for, but at least listen and then you can decide what's the right thing [00:28:00] to

Toni: do. And maybe don't send them this podcast because, uh, I feel, I feel they might, they already know they might get even more like that.

Yeah. But, uh, let's, let's up this one more thing. I think you had one more item that you, you were thinking about, um, in terms of. How to, let's just say measure the worth, um, of, of, of a top sales rep.

Antoine Fort: This is the, actually the, the, the, the most important thing, which you don't always think about. And that's the reason why in board meetings, um, investors, they like to see the distribution in attainment in the team, um, is because every dollar of revenue that you bring is, uh, economic value for the company.

Let's say that a company is worth, uh, 10 x their revenue. So, which is maybe slightly more than the current, uh, multipliers that we see. But, but again, let's make things simple. Um, it means that, you know, top performers, they're probably, [00:29:00] if they're doing 2 million instead of 1 million new business, they're not only creating 1 million additional revenue compared to the other ones, they're creating 10 million additional valuation.

For the company.

Toni: And that's, I think that where, where most of these things are a little bit of outta whack, right? And this is where then suddenly the defense mechanism kicks in. It's like, oh, wait, wait, wait, wait, wait. There's also the product team that's helping to achieve that and the marketing team and so forth and so forth.

But yeah, ultimately, I mean, who's, who's converting those opportunities into close bond deals and doing, you know, doing that beyond the expectations, right? We, we, we are not talking about, uh, a sales rep whose job it is to close. I know like their target. That's kind of an expected outcome. We are talking about sales rep consistently, uh, achieve 50 to a hundred percent more than those expectations.

And really, um, you know, I mean you could even make this even more complex and say like, oh, suddenly the company grew X much faster leading to [00:30:00] even a higher multiple than, you know, there's all kinds of ways to complicate this thing. I think at the end of the day, we just wanted to, you know, look at the.

Successful sales rep angle and basically tell everyone you're probably underpaying these, these folks, these ladies. Um, and um, and I hope this landed. I hope this landed right. So now that we know what they're worth, what's your, you know, what, what a what a good solid tips and tricks.

How to Keep Your Best Reps Happy
---

Toni: Um, what can you do as a business to make sure that your best reps are never leaving you?

Antoine Fort: Sales reps, like a lot of, uh, a lot of us like, like, like, like everyone basically can have multiple motivation drivers. So money can be one of them. Recognition can be one of them feeling of progress. Self-development can be one of them. Impact can be one of them. So there's no one size fit all for every team member.

They will be seeking different things [00:31:00] and you need to provide them what they're looking for. So I like to say that, um. Comp healthy competition between the reps and showcasing that to the whole company can be a very good, um, way to get the recognition that people are looking for. Yeah. Um, good sales training should be internal or external, can be a good way to provide the learning, learning curves that those who want to learn to progress are looking for.

Um, so, so these are other things to, to, to keep in mind that are very, very important. It's not only about the money President, president's Club, sorry, can be, uh, a good way of recognition. Uh, so, so that's why they're popular, uh, in, in, in many high growth companies. Uh, and then in terms of compensation, if [00:32:00] we come back to this, there's things that can encourage the right, uh, behavior such as, as I said.

Strong accelerators. So this will be at the top reps. You can also add kickers for multi gls for, um, solid payment terms, um, such as a multi-year upfront payment term. This contract will be more valued by the board than the normal yearly contract paid, maybe, uh, on a monthly basis. So you can provide that to encourage the closing of deals in the right or the best conditions possible.

So this I like, I like to see something that I've also seen working. It's inbound distribution based on attainment. Yeah. Inbounds are your best leads, um, compared to outbound of [00:33:00] course. So why would you be splitting your best. Leads between the non best reps. You want to give the best leads to the best reps.

So it can be self-fulfilling and, and, and you, yeah. And that way you can give not enough chance for the others to, to, to, to grow in the hierarchy. But this is something that can be very, um, motivating. You know, that if you're perform well, there's even more chances for you to perform well. It's a very capitalistic version vision.

Uh, uh I know. But like, and, and then the, the other thing can be, um, um, don't try to grow your best sales reps into managers unless they want. So, if they want, so, and you've got good reasons to believe that they will be good in this role, try it out. And you will see with the right, uh, training the, the, the, the right methodology.

But when they don't want [00:34:00] to become managers, don't force them to be managers because. If you do so, you will lose a top con individual contributor that is no longer going to be individual contributor. You will have maybe someone that is bad at managing because they did not want that or believe they wanted that, but not really.

And you're gonna lose the whole team below because the manager is not, is not good. So build strong carrier paths for engineer contributors with strong base salary evolution because otherwise they will be leaving in the end. Yeah. So all this can

Toni: work. So I like all of these. Right. Um, I really like the inbound distribution piece.

We, we played around with this once. It didn't fully work out 'cause we kind of were struggling on, we kind of, as you said, you're kind of creating a self-fulfilling prophecy by giving inbounds to the same guys and then they just hit higher. So you need to find like a different way to, to do the distribution.

[00:35:00] And we were trying to figure this out with like. How was your outbound conversion? Like, the higher your outbound conversion is, the more inbounds you get, and it got too complicated. So we kind of, you know, stopped this in the end, but I think this can work extremely well. I've seen orgs that figured this out and it worked extremely well.

I think the, the mistake that I've committed probably the most was, um, taking strong performance, making them leaders, uh, or rather managers and them never actually becoming leader. Right. Messed up so, so many times with this thing, but the, what, what do you think is the, the reason for really, the reason for this happening, right?

Is it, is it really the, the, the individual career path or is it, you know, do you have other tricks to kind of think about this? Because it's sometimes also, and you said this yourself, it's um, they think they want to be a manager.

Antoine Fort: Yeah.

Toni: Um. But you know, how, how, how can you push against it? How can you tell someone, you know what I know better than you know, um, and you [00:36:00] should stay in your role.

I mean, how, how do you do that?

Antoine Fort: Hmm. It's very hard. And, and, and, and I was about to, to start answering with, uh, exactly the same question, saying like, why the hell does not everyone, but so, so many people want to be a manager. And, and I, and I think it's maybe becoming less and less because companies understood that it was not the only path.

So they're all, all companies are building strong. Uh, IEC carry paths as well. Everyone can also have seen managers that were, uh, suffering in their role. And, and when you see so, and you're not sure about, if you wanna be a manager, maybe it can be. Um, a good signal to ask re yourself the question and maybe Indian finished by answering No, it, it's not for me.

Or at least not now. Uh, so I, I think it's more that the society rewards, uh, power. And if you manage [00:37:00] people, it's um, something that looks like power from the outside. So everybody, and usually the base comp is also higher. So you are thinking, okay, uh, I want to, I want to hire base comp, so I'm gonna be a manager, but maybe in the end you're gonna make less money than if you were sticking to this, uh, strong top performing individual contributor role.

Um, because when you're a manager, it's very, very hard to go over 150% target achievements. Yeah. Because to get there, you need everyone in the team, in your team to beat at 150. It's very hard. So you cannot. Be an outlier in terms of performance as a manager. It's hard.

Toni: I, I think this is something that, um, engineering developers have figured out.

Yeah. I feel like they're very good individual contributing path ways for, for those in, in those roles. Right. Kind of. There's like, there's like the principal and then they have [00:38:00] director and they have like all kinds of very specific, uh, seniority levels where they actually end up making a higher base salary than, than sometimes their, their managers.

And their managers. Managers, right. Simply because they're so deep in a very specific area and they, they should never leave the organization. I think that's a good tip for folks out there actually kind of create ways where you can give ICS director of VP titles while they're staying ics. Right. Not managing folks.

Because from the outside. They can say, I'm a vp, and I think that's really important. Or they can say, I'm a director, because that's really important. Um, instead of saying I'm an account executive, right? Um, and, um, I think the, the job that they're doing, obviously they need to love this anyway. They need to be into this sales thing.

They need to, you know, want this for a long, long time to be and so forth. But try and figure out how can you create those recognition incentives, [00:39:00] um, uh, that, that basically create reasons for them to stay in the SU role where they're actually most productive probably for you and your organization. And I think that's really difficult to figure out.

The, the other thing I just wanted to maybe ask you a question on, um, because many people have asked me this over the years, uh, you know, sometimes the board ask this, sometimes, you know, friends ask this.

Commission on Renewing Customers
---

Toni: Should you be paying commission to your sales rep based on renewing customers? And, and this now in a sense where you have an AE team that really only does new business deals.

They don't do the account management part or however you structure that. Um, but you basically say, okay, for customers that are renewing, you kind of get a, a get a plus one or whatever, right? It shouldn't be the same commissioner obviously, but there should be maybe a benefit. Um, what's your, what's your thinking about that?

Antoine Fort: My initial thought is, um, quite against it. Um, at least [00:40:00] when we're speaking about someone that's, uh, is responsible for doing new business only and then passes the ball to someone else because it will be a distraction. Um, they will be always asking about, I mean, asking the CS team. What about that customers?

They will maybe be making some calls to that, to that customer, and it might not flow in your customer lifecycle as you would want to do, plus it's time that is taken away from their responsibility for generating new business. So for all these reasons, I, I'm, I'm quite against it again, as a general rule, and I could see the reason behi be, be behind this, it's you want to incentivize reps to close deals that are good deals and that will have higher chances of renewing [00:41:00] 12 months from now.

But again, if you're thinking about immediacy of rewards, if they have the opportunity to close a deal, which is not a so good deal. They won't be saying, oh, I won't get my additional commission 12 months from now, so I'm not gonna close it. No, they're gonna close it no matter what.

Toni: So I, I usually came to the same conclusion here.

Right.

Retention Strategies for Sales Reps
---

Toni: But I was also thinking like, could you create some commission schemes that make it really expensive for sales reps to jump ship? Right. Uh, basically what you wanna create is a way where not a single sales reps ever quit. Uh, they're only being let go. Right? Kind of. That's, that's almost what you want to create here.

And if you have, let's just say you've been a successful rep. Um, you've been in the business now for three years, I don't know, something like that. Um, you have, uh, at least two years of renewal cohorts under your belt. And just by sitting there, you will have a bunch of renewals coming in that will prop your commission up, you know, in some, in some shape or another.

Not by a lot, lot, but, but in, in some meaningful [00:42:00] way. If you now were to jump ship and go to another company. That incentive would just drop away. Right. So kind of, I'm, I'm trying to figure out, are there, are there, you know, tricks here where you can create a scheme that basically creates pain leaving the organization?

Antoine Fort: I, I, I think there's, there's, there's a high risk with this. It's a litigation because when someone is leaving, let's say that you have a general 90%, uh, renewal, uh, rate as a company, that person can be leaving saying, okay, I have 1 million booking. This is going to be, that is gonna renew, uh, in the next 12 months.

So it's probably gonna, gonna renew from 900, 900 K. I'm supposed to get 1% out of it, so you need to pay me an additional nine k on top of everything you'd already owe me for me leaving. Yeah. Um, but thinking about what would be the right way [00:43:00] to. Uh, it is hard. You can't force people to stay at a company if they still, but I, I think the, the, the most, um, efficient way to do so is if they still believe that they can be closing a lot of revenue in the next 12 months because they're good, because the product is good, because they are surrounded by people, by process, by culture, by company that can guarantee them to be successful.

Like they've already, already been so far and they are paid well for doing so. There's no reason for them to leave.

Toni: I, I think actually almost the reverse is true and. Obvious. You know, as we started this episode, we were talking about, hey, you know, commission is not a solve all for everything. Um, and it's also not a solve all for your retention problem with a ease if you have that.

Um, but I think what can create grumpy reps is hiring new reps and then not being able to [00:44:00] support, you know, the, the previous ones or all the reps properly through your pipeline generation, right? Kind of that creates very quickly lots of grumpy reps. Um, and that's also a thing to think about in terms of efficiency, right?

Kind of when, when to actually add another rep. Uh, obviously you need that or to grow, yada, yada, all of those reasons. But you do need to find ways to make sure that, um, you don't suddenly staff the ones that were working out for you, right? Yeah. Because that might create reasons for them to suddenly jump ship, leave you behind, you know, do something else.

Um, and, uh, maybe that's a good retention strategy.

Hiring New Reps: When and How
---

Toni: Like really, really just being clear on, hey, if we. If we over hire, if we don't hit our pipeline goals, we'll probably put our best reps at risk of, of jumping ship because hey, suddenly they can't make the quota anymore.

Antoine Fort: Yeah. And you know, I've done that mistake, uh, we, we've hired a bit too much people, um, once, and this creates just [00:45:00] this situation where the ones that were closing, uh, a lot suddenly starts to close a bit less because they Yeah.

Don't have as much in their, in their territory, in their, in their pipeline. So I think that really one of the good, uh, answers to that question, which I would almost call a universal rule. And there's, and there's few for me, but this one, I, I learned it the hard way. It's, uh, only higher reps when they are not, when your existing team is not able Yeah.

To handle the volume. Of opportunities anymore when you are missing opportunities, not because, um, you, the, the, the, the, the performance of the rep was bad, but because the rep did not have time to spend with that prospect and you're losing that one. So it means that if you have someone else, you would've won it.

Yeah. But [00:46:00] don't do it otherwise.

Toni: So maybe switching gears a little bit.

AI and Usage-Based Pricing Challenges
---

Toni: So one, one topic this, um, that is affecting more and more sales organizations, uh, especially the ones are now doing AI and outcome base and usage base and all of that stuff. I mean, this is just a. Massive headache for people right now.

Drafting and building compliance is a massive headache for paying them in the right way. I mean, how, how is that problem hitting your desk? What, what, what are you seeing, uh, with your customers in this usage space slash credit system slash outcome base system that's coming? Yeah,

Antoine Fort: very interesting topic because, uh, uh, as, uh, everybody knows that there's more and more of these type of companies, more and more of this pricing, especially with the rise of ai.

So we, we have a lot of customers, uh, at Cobra that are in such situation and what I've seen, uh, from them and what I've also seen from leading companies, uh, like, [00:47:00] uh, snowflake or, or open AI Databricks. So there's really first a question which is not about comp, but about the team structure. So are you asking your AEs to disappear after the contract is signed?

And then it's someone else that it's taking the lead deployment and trying to generate usage, or are they staying? Mm-hmm. And, and this is the first question you need to ask yourself. If the reps are staying for, let's say, six months after, after, after the closing, then it's not that much of a question because you can pay them for real revenue generated because they're responsible for it.

So it's just that the sale doesn't happen only at the closing, but for every additional piece of revenue that you are able to bring, [00:48:00] but it's under your responsibility. So that works fine if you have the reps disappearing after the closing of the contract, which again, can be very understood as a strategy.

Why? Because. New business is so hard that you don't want to distract your AEs, focusing solely on new business with other activities that might look easier and you would have them not doing new business anymore, or at least not as you would want them to do. So this creates a problem because when you're closing the contract, you're not bringing any single dollar in revenue.

Of course, you can have a mix between subscription, subscription, sorry, and, um, usage based pricing afterwards. So when, in such case when you close a contract, you have direct revenue that's, that is coming in close to the, [00:49:00] uh, generic SaaS example. But when you have no single revenue on closing, then what we, what you need to do as a company is to choose between two models.

The first model is you forget about the immediacy of the reward, and you're saying to the rep, you are gonna be paid later when revenue is generated from that customer. This usually doesn't really work because again, you have no immediacy to the reward. Plus the rep has almost no control over, over what has, what's happening after.

So you don't want that, but in very specific cultures. And you know, there's also companies that have no variable compensation for sales reps. So you can have a ton of different ways to, to, to, to design comp or design, no comp, but there's, it's, it is gonna be hard. So the other way that we [00:50:00] see as a good practice is when you close the deal, you get a quota credit for, let's say.

50 to 70% of the estimated annual contract value for that customer. So let's say 60%. And then there is a period that goes from either three to 12 months. So let's call it six months, where when the usage reaches what was forecasted as the deal value, you unlock the other part of a credit. So if you were paid six K, you get paid the next 4K for that deal slightly later.

Mm-hmm. So when you hit that, that user threshold, and then for everything that is on top during this six months period, you have a flat rate commission. So I don't know, 10%, for example, on all the additional revenue. [00:51:00] And this revenue is non quota bearing. So it means that it's only the first part that gets counted towards the quota, otherwise it's going to be very, very complex.

So if you, if you do so, you of of course need a very solid sales ops or finance, uh, process to make sure that when a deal is forecasted, it's estimated, it's, it's coherent. It, it, it, there's a, a good logic behind it. So you need that strong process. But over time, this is, uh, a comm scheme that has proven to, to, to work if well executed.

Toni: I was just talking to someone else actually about this and um, and people are really struggling with this, right? Um, the. The obvious question sometimes is, and I think you answered this really well, so we had this conversation and I, I didn't know about this scheme. I think it was really great actually. Um, but the obvious question is always like, ooh, clawback, [00:52:00] should you then do clawback, right?

If, if you don't hit the expected forecasted value and so forth. Um, what's your, maybe maybe we split this. What's your general thinking about C Club X and what's your specific thinking about Club X even in, in this usage based scenario?

Antoine Fort: In this usage based scenario? What I, uh, so I'm generally against clawback, but in this very specific u usage based, uh, I think it's with adding C Club X.

Mm-hmm. And, and to design them, uh, with the following rule. So if there is zero revenue generated with that, uh, customer ever, a hundred percent clawback, if the usage generated is between one and 49%, so up to 5%, uh, 50%, sorry. You call back half of what was paid, as long as there is at least 50% usage. And remember you were paid on 60%.

You don't call back the rest.

Toni: Yeah. [00:53:00]

Antoine Fort: This again is probably something that works. And again, what is the, why do you want to implement the callback? Um, obviously for financial reason, but another good question is why did this deal did not generate revenue as it should have is the responsibility of the rep because the rep closed the, uh, a, a ghost deal?

It can be, but also it can be, everything was on track when the, this deal got signed and then after something happened with the customer, for example, the main owner was leaving the company. So whatever reason. And then the deployment team, your own deployment team could have messed up or did not really mess up.

But for external factors, this deal did not get implemented in the right time window. [00:54:00] But it's the responsibility of the rep, not always. So don't be too hard on callbacks in this very specific use sketch. I, I think the rule I gave is, is, is a good one, a good generic rule, but otherwise, as long as you can avoid clawback, do such,

Toni: I mean, I was just thinking through it.

I was like, ah, damn, maybe, maybe just should forget about claw X to begin with. Um, but then I was like, so, because I always hate, hate clawback. I just hate them. They're, they're just, um, there's so many times I try to claw something back and then eventually the manager, the director, the VP of sales came to me and was like, Hey Tony, we do this now for, you know, Joe.

Like, he will be really demotivated. We're already behind. It's Q3, we're behind, you know, one month to quarter end. Like we, we need him to pull in what he can. If we do this claw back now, he'll be pissed off. So I, I always got this fricking story. Um, and uh, and [00:55:00] basically at some point I gave up and say, you know what, this claw back thing, it doesn't work.

But I think in this regard here, I think you almost have to have some kind of clawback in order to get the reps, you know, some responsibility in their forecasting skills of what the revenue of that deal will be. Right. Because basically if you do the clawback below 50, it could even be below 25%. It doesn't actually matter where they land, but basically then it forces them to not say, yes, every single customer is a million million in, in revenue.

Uh, but be realistic about it. Right? Because they know there's a, there's a downside to it and obviously, you know, some of the more tech enabled, uh, ops guys listening, they will be like, well, you can do some cohorts and some lookalikes and you will see some. Yeah, sure. Um, but I think that will always lead a little bit to, to friction there.

So I think this is, um, I think this is pretty, pretty cool actually. Do you, and maybe this is a bit off topic, but it's a little bit connected to this. [00:56:00] Do you see that in those usage based systems, um, do you see that reps start to. Blend a little bit more into the, well, not the full cycle, but blend it a little bit into the new biz and existing business wrap.

Kind of do, do you see teams doing that rather, or do they keep it still separate despite the usage?

Antoine Fort: Actually most, there's more and more companies in this scenario that's, uh, don't separate between AE and csm. This until a certain threshold in the relationship. The threshold is not anymore contracting nature.

It can be slightly later. Yeah. I, I, at Databricks for example, they, so it's very big and, and maybe not applicable to everyone, but they're the less and less having separate teams. And, and, and just to circle back on, clue back again, um, let's not take the AI or usage based, [00:57:00] um, pricing, but, but as a general rule, what I like to say is, if.

You have less than 8% of your closed one deals that don't convert to real revenue, then what you need to do is avoid clawback and simply adjust the base commission rate accordingly. So you lower it a bit so that on average your remain in your financial forecast, but you don't add this layer of complexity.

The only exception I would, uh, I I I would add to this, and actually it's not a callback, but it's a payment schedule, is when you have this huge deal, like the huge deal, which is bigger than the yearly quarter, and which is 20 times the average deal size that you are expecting. Usually it means that it's a, it's a very enterprise company that will maybe have some [00:58:00] payment, uh, schedule.

Not upfront. So one part of the payment will be due upfront, but another part will be due on delivery and so on. So in this case, you want to have guardrails so that you don't pay the full commission to that rep right now because the revenue is too much tied to delivery and in your revenue reporting. So we are not speaking about commission anymore.

You probably cannot recognize this contract yet as a hundred percent in revenue. It cannot because a part is still tied to delivery. So in this case, I don't recommend to pay upfront. I don't recommend to pay upfront, plus having your callback, uh, later. I just recommend to say, okay, we're gonna pay you a good portion of your commission right now, [00:59:00] but the rest will be unlocked.

Upon, upon, upon delivery thresholds.

Toni: And I think this is also a great way to, if you, if you execute this poorly, it's a great way to piss off your best sales reps too, right? Let's just say you have this 20 XACV deal. Uh, it closes everything this great, you know, hopefully this was a good sales rep and hopefully that deal landing was also due to the sales rep skill and so forth, right?

I think that can also sometimes be just a luck issue. I had that happen to me once, but you know, if those two things are correlated, you really wanna make sure you don't, you don't mess with this, right? I, I've seen several times where CFOs were like, ah, but you know, we, you know, with all of these accelerators and we have unlimited comp, like.

Tony, do you know how much money this would be? And I'm like, yeah, I, I know exactly how much money this would be and we should absolutely pay this because this is actually worse than the clerical error. Right. Kind of you, you kind of mentioned like, oh, you know, uh, [01:00:00] you make a mistake in the spreadsheet and then trust is broken for 12 months and so forth.

I think this is the deliberate, uh, you know, misplay by the company, which then basically tells every single high performing rep like, Hey, if I do hit the jackpot, if I do go all the way, actually I need to be worried that they're then gonna come through and actually pay me. And I think that's, um, that's another way to, to lose and piss off your, your best sales rep.

Before we kind of close this thing out here, um, there are a bunch of people listening here from Europe, a bunch of people listening here from the us. Um.

Differences in Commission Structures: US vs Europe
---

Toni: What would you say the differences are between the two countries in terms of commission and, and comp and OTE and how to think about this? Um, and what do you think?

I'm just assuming, can Europe learn from the us?

Antoine Fort: The first of just difference is, uh, usually the otes are much higher in, uh, in the us uh, [01:01:00] themselves higher than OTs in Europe, from US companies, uh, themselves higher than OTs in Europe, from European companies. So, so that's the, that's the hard reality, which as a European, uh, hurts, uh, sometimes, but, uh, that's how it is.

So in, in terms of comp structure, I think that it's quite homogeneous between, um, tech companies and, and, and we all, uh, have more or less the same good practices. The one thing that I see, uh, in, in US compliance that is, uh, quite, um, not here in European compliance, it's really the. The deal pure deal analysis.

Uh, and it's due to two reasons. The first one is, uh, in the US you have, um, a, an accountant norm called a SC 6 0 6, that's needs that, that requires you to [01:02:00] recognize the cost, the commission cost related to one deal, so to every single deal. Mm-hmm. And amortize it over the duration of the first commitment period.

So that forces them to think about a commission deal per deal. While in Europe it's more like you've closed that much. This is X in, in, in commission, but you have no link on how much you've won on this exact deal. So that's one thing, one of the reasons why they're doing so. And the other reason is I think, uh.

Um, the, the, the, the financial models, financial, um, analysis and the reports are, are go more in, in, in, are more deep in, in the us. So they really want to understand how much every single deal is costing to then run cohorts analysis by, [01:03:00] by segment and so on. So when you manage to go until then in terms of comp analysis, which is a very high level of maturity, and again, not all US companies do it far from Edward, when you manage to go there, um, that's where you have a really deep, uh, understanding of your own.

Sales structure, um, a, a as a, as a as a business. And, and that's where you have the best chances, chances to align it properly with your strategy. Explain to the reps how much you're gonna make on every deal. Uh, and, and, uh, of course it's all like, cowork can help. Uh, but, uh, it's also about the mindset, how much energy you wanna put, uh, in taking care of your com, of your com scheme.

Toni: Antoine, really cool to have you on the show. What would be, what would be good ways for folks to follow you, get in contact with you? Uh, see what's up.

Antoine Fort: Yeah, LinkedIn, I think, uh, Antoine Fort on, [01:04:00] uh, on LinkedIn. Feel free to. To add me and, and send me messages. Uh, we happy to, to, to help you if I can. And, uh, yeah, I think that that's probably the best way.

Toni: Wonderful. Antoine, thank you so much to have you here and everyone else listening. Uh, I hope this was like insightful. We went through a bunch of different topics. Make sure you don't lose those best reps and, and if you have the problem, figure out how to do, uh, usage based, uh, co plans and commissions and so forth.

And otherwise, see all folks next week. Cheers.

Next Week: Health & Mental Health for Founders
---

Toni: Next week, Raul and I are talking about our health. Yes, our actual, physical, and maybe mental health. And we are also gonna talk about what other CROs and founders are doing in order to stay sane despite all the pressure. If you don't wanna miss it, hit subscribe and see you next week.