Jeff Kushmerek’s Post

I did an informal poll on CSM vs Sales commission splits. I was pleasantly shocked to see that over 95% of companies do not have Sales take a commission on renewals unless it’s a particularly challenging one; the AE is there to help with it as a “bounty renewal”. in this case, the AE gets a % but is not taken from the CSM. Other interesting data points: "Commission on upsells and renewal made up 30% of the total compensation package. However, the exact commission % was determined by dividing the 30% by $$$ into the total ARR managed by the CSM." What metrics should this be based on? Most followed this model to Typically, companies that are earlier in their CS maturity will base this off a few leading indicators (adoption milestones, EBRs, etc.), and then move to comping on lagging indicators (retention, expansion, NRR, etc.) once their leading indicator activities have been proven. The following are examples of metrics you can use, not an exhaustive list: Leading: QBRs and/or EBRs (attained vs scheduled) Product adoption milestones (product dependent) Lagging: Net Revenue Retention (NRR) - this is likely the most common Retention Expansion Advocacy (hard to make this scale across large teams and mixed portfolios - this is better as a SPIFF or annual metric to Bonus on) From there, you can determine the weight of each metric on the bonus. I'll give an example using a bonus that is achieved by a renewal retention goal and an NRR goal. Criteria for 100% Bonus Attainment: 90% Renewal Retention (50% weight) 125% Net Revenue Retention (50% weight) "This keeps it pretty simple with two priorities. Retain and Expand Revenue. The Retention goal being assessed separately ensures CSMs don't have significant churn masked by massive upsells. In this example, if a CSM had 85% Retention and 115% NRR, they'd end up at 93.22% to goal for their overall commission/variable comp."

I did an informal poll on CSM vs Sales commission splits. I was pleasantly shocked to see over 95% of companies do not have Sales take a commission on renewals unless it’s a particularly challenging one, the AE is there to help with it as a “bounty renewal”. in this case, the AE gets a % but not taken from the CSM. Other interesting data points : "Commission on upsells and renewal made up 30% of the total compensation package. However, the exact commission % was determined by dividing the 30% by $$$ into the total ARR managed by the CSM." What metrics should this be based on? Most followed this model to Typically companies that are earlier in their CS maturity will base this off a few leading indicators(adoption milestones, EBRs, etc.), and then move to comping on lagging indicators(retention, expansion, NRR, etc.) once their leading indicator activities have been proven. The following are examples of metrics you can use, not an exhaustive list: Leading: QBRs and/or EBRs (attained vs scheduled) Product adoption milestones (product dependent) Lagging: Net Revenue Retention(NRR) - this is likely the most common Retention Expansion Advocacy (hard to make this scale across large teams and mixed portfolios - this is better as a SPIFF or annual metric to Bonus on) From there you can determine the weight of each metric on the bonus. I'll give an example using a bonus that is achieved by a renewal retention goal and an NRR goal. Criteria for 100% Bonus Attainment: 90% Renewal Retention (50% weight) 125% Net Revenue Retention (50% weight) "This keeps it pretty simple with two priorities. Retain and Expand Revenue. The Retention goal being assessed separately ensures CSMs don't have significant churn masked by massive upsells. In this example, if a CSM had 85% Retention and 115% NRR, they'd end up at 93.22% to goal for their overall commission/variable comp."

Is it just me, or are more and more sales teams adopting a combination of Command of the Message and MEDDIC / MEDDPICC for discovery?  Is that a good thing?   I don’t have an issue with Command of the Message, per se, it just never struck me as particularly special? But I really don't "get" MEDDPICC, especially for SMB mid-market teams.  Why?  1️⃣ MEDDPICC is not a discovery framework.  It’s a qualifying framework.  It poorly frames what a good buying experience should be for a customer and often shows up as an interrogation.  So, it often leads earlier-career sellers into sounding robotic and scripted, which is the exact opposite of the experience you want to give a would-be buyer.  It takes a pretty high level of skill and practice to follow the “arc” of MEDDPICC without sounding this way.  2️⃣ Most SMB and MM sellers are earlier in their career and it’s tricky to train on MEDDPICC because it requires a fairly high degree of business acumen (which is a whole separate issue), especially understanding the difference between end-user pain and business-level pain, never mind being conversational in those differences. 3️⃣ SMB and MM sellers tend to work a large pipeline, and it should be pretty high velocity (usually 30 day sales cycle or less, maybe a bit longer as the deal size grows)... so, it’s overkill and unrealistic to expect them to fill out (in a quality way). 🤔 So what do I think these sellers should do instead? At least a few options… First, Todd Busler at Champify wrote an awesome post on this topic.  Here's the summary 👉 After reviewing thousands of calls, Todd's takeaway was that all you really need in MEDDIC to assess deal quality and decide to invest or divest your time is >> (1) A really great champion who wants to drive change (I’ll have another post on that), and (2) Quantified business pain (aka – Metrics + Pain). This won't cut it for logging in your CRM 😂 but it'll help you and your manager really assess deal quality. Second, and it’s still kind of wild to me how few sales orgs I’m aware of that use this – the HubSpot sales methodology.  Frankly, I don’t even know if it’s HubSpot’s… but it’s what I was trained to do while I was there and it’s what we trained hundreds of other sellers (and partners) to use as well.  You might see it referred to as “Inbound Selling”, which is a misnomer, because it has nothing to do with demo requests.  If you want to learn how to do it from a practitioner, check out the link in the first comment below. Masterclass coming this Fall. What else would you add? Is MEDDPICC the best? The worst? What are your go-to discovery tools to drive great customer conversation?

It took me losing a team of 3 sales reps to learn to avoid these mistakes: Losing team members is never easy, but sometimes it’s the wake-up call you need to reevaluate and refine your sales strategies. Here are four critical mistakes that led to the departure of three skilled sales reps from my team—and the lessons I learned to prevent this from happening again: 1. Not Taking Notes in the CRM: Your CRM isn't just a tool; it's the lifeline of your sales process. It’s your business’s heart - pumping opportunities everyday. Initially, we underestimated the power of detailed note-taking in our CRM. This oversight meant missing crucial client details and preferences, leading to less personalized follow-ups and ultimately, lost sales opportunities. Now, our team rigorously records every interaction, making sure that no critical information slips through the cracks. 2. Not Calling a Lead Within 5 Minutes of Opting In: The speed of your response can make or break a deal. We learned the hard way that waiting even an hour to reach out to a new lead significantly reduces the likelihood of conversion. Implementing a strict policy to contact leads within five minutes of their opt-in has dramatically increased our engagement rates and conversions. 3. Neglecting Pre-Qualifying Steps or Sending Assets: Skipping the pre-qualification process was a direct path to inefficiency. By not filtering out unqualified leads or failing to provide them with preliminary assets, we burdened our sales reps with low-probability prospects. We've since developed a robust pre-qualifying funnel that includes sending informative assets upfront, setting the stage for more quality discussions and higher conversion rates. 4. Assuming Non-Payers Will Never Convert: One of our most limiting beliefs was that if a prospect didn’t buy immediately, they were a lost cause. This mindset led to missed opportunities with clients who simply weren’t ready to commit in the initial stages but could have been nurtured into valuable customers. We now focus on long-term engagement strategies, recognizing that today’s 'no' could be tomorrow’s 'yes.' These lessons reshaped our approach to sales, turning painful losses into powerful learning opportunities. By addressing these mistakes, we not only improved our processes but also built a stronger, more resilient sales team.

Revenue growth behind plan for the third-quarter – where does the finger typically get pointed? Assuming a sales led motion, it always starts with the sales leader who has missed their number. Reasons include pipeline quality or quantity not quite being there. Team members still in a ramp period. Key opportunities close but buying decisions keep getting pushed out by a quarter. Next is marketing, who aren’t sourcing enough of the “right” type of leads. Lead qualification criteria is clear but pipeline conversion rates remain lower than ideal. Campaigns and channel activities are well thought out but never yield as hoped. And if churn is creeping up, there must also be a problem within customer success – whether it’s people or process. Is there visibility of customer usage? Are users within customers fully enabled? Are we contacting the right people well ahead of their renewal date? These are all valid questions asked in a valid order. But the thing they have in common is they all have very objective measures of success. But there is one function that underpins all of them which is much harder to measure, and tends to get off lightly in these debates. Product. “Product/market fit” is probably the best known start-up term of recent times, but measuring it gets disproportionately overlooked in commercial discussions. Be a fly on the wall of most board meetings and I guarantee sales, marketing and CS are critiqued through multiple KPIs. But aside from a review of the near-term roadmap and engineering efficiency/performance (usually towards the end of the board meeting), how many boards apply the same level of rigor to whether the product remains better than alternatives? I think the main reason is it’s challenging question to objectively answer. You can typically work out ROI cases against the “do nothing” competitor depending on if the product is a revenue driver or cost saving driver, but comparing to other competitors (direct or indirect) is a completely different ball game. Sales teams develop insights over time from prospect feedback, but getting first-hand visibility of a competitor product can be difficult, let alone to then work out and justify the incremental value of yours in a customer setting. And because of this, product and engineering leaders rarely find themselves under pressure for revenue underperformance, despite being responsible for the highest leverage and most fundamental point in the value chain. Every increment of improvement they deliver multiplies performance across all other functions. How do the best companies track product strength relative to competition? NPS, product stickiness ratio, one off competitor reviews are all helpful, but none carry the same weight or finality as revenue does. If anyone has any frameworks or metrics for measuring it (other than revenue growth and sales efficiency), be great to hear about it in the comments! #product #startups #vc

Most Sales-Led companies are not using the Product in their Go-to-Market. Product Managers should be driving this topic but often lack knowledge. Here's my 3 recommendations to help PMs bridge the gap: 1. FORGET about user acquisition or lower subscription values While most of the Product-Led Growth conversation in the past years has focused on this, it's usually not what's top of mind for your sales team. This equates to moving downmarket, while most companies are trying to move upmarket. And it means the average contract value will decrease, which means sales reps need to close more deals to make the same commission. So unless there seems to be interest from your CEO or Sales team already, I would focus on other opportunities where the product can help. Try to improve the system that is already there, for example by qualifying the leads in the product so the sales team can be more efficient. Or by capturing interest in contract expansion within the product, to provide your Account Management team with good leads. 2. ACCEPT that volumes are too low for A/B testing If you have a sales team today without Product support, your ACV is likely $25k or higher. For a business that's growing $1M/month, that means 40 new customers per month. It would take 6 months to reach a few hundred people for just 1 test so A/B testing won't work. Instead, PMs should collect feedback from the Sales and Customer Success team in a similar way they do for new product features. Focus on the Go-to-Market process and understand where the bottlenecks are. Then come up with product improvements to solve that. Try formulating user stories from the perspective of the sales rep and see what ideas come from that. 3. EMBRACE the sales team and become their partner The tension between sales and product is as old as the functions themselves. We need to realize that this is different. We are not talking about a feature request to close a contract. We are talking about systematic improvements to the journey of all customers, to drive business impact. Be curious about the sales process. Read the reports, watch sales demos, and join the meetings. Once you understand where the biggest pain points in the Go-to-Market process are, you can suggest how the product can help improve. And since this will be aligned with the current focus of the business, you are much more likely to get a positive response. (BONUS: Ideas like this also show that a PM understands the business, which is often an important requirement for promotion to senior roles) The time for this is now. The market has changed and even Sales-Led companies will need to leverage the product in their Go-to-Market. PMs who can do this will stand out from their peers.

𝗗𝗼 𝘆𝗼𝘂 𝗵𝗮𝘃𝗲 𝗮 𝗵𝗶𝗴𝗵-𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝘀𝗮𝗹𝗲𝘀 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 𝘁𝗲𝗮𝗺? "By having your SDRs perform their job effectively, you can be confident that your entire pipeline is thoroughly covered." By analyzing data, we have uncovered ten invaluable tips that can help you build and manage a sales development team that performs at the highest level. With these insights, you will be able to unlock the full potential of your team, achieve your sales goals and stay ahead of the competition.  Get the 10 tips now ➡️ https://lnkd.in/e2eBBTjq #SalesDevelopment #SalesLeader #SDRs #SalesPipeline #Revenue

‘Sales Forecast’ track history. Sales Pipeline reports track ‘win rate percentages’ of various deals based on subjective opinions. Most sales reps assign rosy percentages to avoid bashing by the sales manager. Time to junk ‘sales forecast system’ of sales reporting….. ……instead use ‘SALESFORESIGHT’, which is opposite of ‘sales forecast’. Both, Sales Forecast and SalesForesight are two methods of tracking sales quota achievement. Sales Forecast involves analysing trends and extrapolating it to future, while SalesForesight approaches the challenge of tracking sales opportunities from the opposite direction. In SalesForesight, you envision where you want to be in the future in a deal and then you ask yourself- “What do I need to do to reach that envisioned goal”? SalesForesight helps you to develop your ability to 1) Visualise upcoming steps with the customer in every deal, and 2) Proactively prepare to align your value chain with the buyer’s key decision-making points in the buying value chain. SalesForesight enables you to map the entire customer journey with your brand, even for the most complex B2B deals. Knowing the customer journey allows you to ‘create and deliver business value’ for each key buyer decision-making events. SalesForesight enables to you drive the future vs. being one of its passengers in Sales Forecast. Need help to map the entire customer journey? There can be more than 150 distinct customer touchpoints with your brand, offerings and people covering the entire sales funnel from awareness stage to consideration, to evaluations, to legal contract, to commercial, to financial to logistics, to installation, to usage to advocacy to post-sales services, to product end-of-life to repeat sales. DM me OR Write to me at mayank.g@salesforesight.in Hi, I’m Mayank Gupta. I simplify B2B selling. I help to visualise your customer’s unique journey with your brand and offerings, enabling you to build a custom sales value chain that 100% aligns to the buyer’s value chain, thereby enhancing sales win rate to 3x to 5x. DM me to know more

An Innovative Sales Commission Structure For High Performing Salespersons: A Case Study Business Challenge: A leading distribution and wholesale company was facing a paradoxical situation: a decline in overall sales coupled with a rise in commissions paid to sales representatives. Despite the downturn in revenue, the absence of sales targets meant that commission payouts continued to climb, leading to increased operational costs. The company sought a solution that would maintain competitive commission payouts without reducing overall compensation, while also simplifying the administration of these payouts and making the process transparent and easy to understand for sales representatives. Additional Key Issues Identified: Lack of Targets: Sales representatives were not provided with specific sales targets, leading to inefficiencies and lack of accountability. Operational Costs: The company wanted to reduce unnecessary commission payouts without reducing overall compensation. Salesforce Retention: Maintaining a competitive commission structure was essential to prevent the loss of top sales talent who currently perceived biasness with client allocation. Need for Simplification: The existing commission model was complex, making it difficult to manage and understand. Strategic Solution: To address these challenges, the company implemented a two-pronged approach: Geospatial Targeting Model: Optimizing Sales Efforts: A geospatial model was introduced to better and more efficiently target the salesforce, focusing on high-potential regions and customer segments. Driving Customer Spend: By refining the targeting strategy, the company aimed to increase customer spend and enhance market penetration in key areas. Performance-Based Sales Commission Model: Linking Commissions to Targets: A new commission model was developed that linked payouts to specific, measurable sales targets. Tiered Commission Structure: The commission structure was tiered to reward sales representatives for exceeding their targets, incentivizing higher performance. Simplified Administration: The model was designed to be straightforward, enabling sales representatives to easily calculate their earnings potential and understand what they needed to achieve to meet their targets. Performance Monitoring: Dashboards were implemented to allow management to track individual and collective performance, identifying areas of underperformance and making data-driven adjustments. Results Achieved: Cost Efficiency: The company successfully reduced its yearly commission expenses by $200,000 by aligning payouts more closely with performance. Revenue Growth: Customer spend increased by 12%, driven by more targeted and effective sales efforts.

p 3 HOW TOP PERFORMER OUTPACE PEERS IN SALES PRODUCTIVITY Those insights can help with alignment, flagging areas where reps may be spending too much or too little time relative to the size of the opportunity. A life carrier, for example, created a sales steering tool that funnels data on the highest-value opportunities and compares them against current seller time commitments.Teams use the tool in sales meetings to pinpoint which customers to contact with what offer and messaging.Support teams work alongside preparing pitch decks and materials so sellers can be up and running quickly Having a clear expectation for where future growth will come—and where not—helps leaders deprioritize their long tail opportunities and find ways to serve these slower growth accounts more efficiently.Often, these clients are smaller companies with less complex needs that can be met through self-service digital channels or through remote engagement with inside sales, and, in some cases, by engaging with distributors. Service levels such as shipping options and minimum order quantities should also be adjusted to different account types and hardwired into IT systems. Cultivate and motivate high-performing talent Sellers are the productivity engine of any sales organization, and top-performing companies set them up for success—fine-tuning skills development and sales steering and tying incentives to specific seller targets. These leaders invest time up front, identifying the specific skills correlated with high performance in each channel and role. Then they differentiate learning journeys, employing self-paced and asynchronous training so that sellers can acquire the content they need, skip content they don’t, and access it when it suits their schedules. One telco, for instance, designed five new channel-specific learning journeys and rolled them out to roughly 1,000 sellers. The journeys were anchored on 15 skills that the company’s analytics showed led to above-average customer productivity. To encourage engagement, the company created a certification program for direct sellers and external agents that included gamified components and financial and non-financial rewards. The training proved wildly popular—achieving an average net promoter score of 60 and a 10 percent increase in deal size per rep. Performance steering is equally targeted—instead of conventional KPIs, top-quartile B2B sales organizations are more likely to create business-specific guidance to focus and direct seller activities. Examples include dynamic, real-time customer insights, pricing recommendation engines, and systems to predict and prevent customer churn. And rather than simply providing this information passively to sellers, they’re using it in daily or weekly huddles to simulate actual customer conversations, problem solve issues collaboratively, and discuss the best ways to support specific sales actions #africasglobalbank #unilever ,#banks #harvardbusinessschool ,#universityofchicago