Brian LaManna argues that job postings use inflated OTE figures assuming 100% quota attainment, when fewer than 30% of reps actually hit it. He proposes MEAN: median earnings reps actually earned last year, broken down by segment. He urges candidates to ask what percentage of reps hit quota and what the median rep actually made.
Chapters
Everyone loves a $350,000+ OTE until they realize it's mostly fiction. I've spent the last year mulling on a solution. Here's the dirty secret with OTE first. OTE means on-track earnings, and it assumes you will hit 100% of your quota. So let's say a company offers you a $300,000 on-track earnings, or OTE. That would mean your base salary is $150,000 and your variable, i.e., your commission, is $150,000. But at this company, let's say less than 28% of reps hit 100% of goal, meaning they don't really see that $150,000 in variable being very likely to achieve. So the average rep at a company like that may take home around $210,000 when they expected to earn their $300,000 OTE. Now here's what SaaS needs to adopt and what I came up with. I call it the median earnings attainment number, or mean. Not what reps could earn if they hit 100%, but what reps actually earned the last year. So you can publish this by segment to say, hey, our SMB AEs, they earned $142,000 in mean. Mid-market, $183,000. Enterprise, $267,000 in mean. This would solve a couple of different things. Number 1, it would end the fake OT inflation game. Number 2, it would give candidates real earning expectations. 3, force companies to be honest about their attainment. And 4, help sellers make informed career decisions. Until then, always ask the following in interviews. First question: What percent of reps hit 100% of quota last year? Another one: Can you show me the attainment distribution? Last one: What did the median rep actually earn? Would love to hear in the comments below who would be on board with MEAN replacing OTE altogether.
