WHY SO FEW SALES REPS ARE MAKING THEIR QUOTA

Hey, before we get into the interview, I want to make sure you're aware of our other podcasts, the Sales Questions, Brutally Honest Answers Show, which is a very quick, under 5 minutes in most cases, sometimes just a few minutes where I answer your questions. You can just send me any question to my LinkedIn profile, Brian G. Burns, and I'll put it in the queue to answer. Also, the Sales Leadership Show. If you're looking to get into sales leadership or you want to hear from the world's best sales leaders, that's where I interview them. Check it out, the Sales Leadership Show. Also at b2brevenue.com, you can learn all about all the courses. Links are in the show notes below, as well as our link to our partners over at brevitypitch.com, the fastest, easiest way to become great at sales and practice. Before it's showtime, here we go. It seems like quota attainment has changed a lot, huh? It used to be 80% people made quota. Now it's like 20% of people make quota.

Yeah, I keep seeing stats. There's all kind of different. Sources you can get it from, but everyone I see says something like over 70% of people are not hitting quota or not attaining quota, whatever the term you want to use there. So that's pretty shocking, I guess, if you came from outside the industry or even being in it. It's like, man, that's 3/4 of people are not hitting their numbers, not making the money that they probably wanted to or promised that they had a chance at making. And there's a lot of factors that go into that. There's rep-related things, there's company-related, and then there's obviously the market as well. But it's, you know, where is that coming from? Was it always like that, or has it just gotten harder and now it's like a dumpster fire and no one's, no one's hitting quota?

Well, I, I think what changed is to, to get the base and the OTE attractive enough, on-target earnings, they've basically— it's a shell game. So we can give them the base and the on-target earnings, but we have to do is give them higher quota. So it's like, oh, you want— like you go to buy a car, you want the, the low interest rate. Okay, so we extend the, the loan or we up the loan. It's a shell game and You know, the CFOs and the comp plans have gotten so complicated. It used to be one percentage under quota and a huge uptick after quota. Now it's like, if it's this type of revenue, you get this. If it's this type of revenue, you get that. If they're an existing customer, you get this. If they are in Minnesota, you get this. It's insanely complicated because they're trying to cut costs, not increase revenue. 2 very different things. And they think cutting costs has no impact on increasing revenue. But having sold my whole life, one of my best years, I made quota at the end of June. And I was at 15% money for 6 months. 15%, right? And I was closing a lot of business, millions. That's $150K a million, okay? And I remember, I think I've told this, New Year's Eve, 7:30 at night, December 31st, I'm at my desk, I'm talking to home office. I'm saying, do not go home. I'm calling the CEO. I got one more order because the dip was $150K. So that was like, you know, $20 grand my way. Or if it came in the next day, it would be $3 to $5K. So I'll skip the New Year's Eve party. And my client goes, You know, I've got your number down here. It looks like you've been— you called me 54 times today. I go, is that all? I go, look, you guys need this. It's going to cost this much today and this much tomorrow. And he got his CEO, and we get— this is 7:30 at night, and it was saving them a lot of money. But that's the type of energy you want out of your reps. Today it's like 5:15. Everyone's yabba dabba doo. See you on Monday. Why? There's no difference. Every sales leader wants their people to care. Give them a reason to care. You know, you're not seeing many club trips on LinkedIn, are you?

No, no, that's a great point. I feel like it's Yeah, it's dropped off, but yeah, there's a couple of things there. The more— I can't remember who told me this, but it was so great because the more complicated your commission or comp plan is, the more advantageous it is for the company, not for you. So I've always remembered that. And it's so true because especially the bigger companies or really anybody these days, it's just so many different avenues, all these different splits or commission rates. And then you gotta, you have to have a PhD to decipher it. And that's never a good thing. Yeah. Typically, that's because they don't want people to make more than a certain amount. Unfortunately, maybe not, but that's just how I view it. And then, yeah, you want people to have skin in the game. How can you expect as like a sales leader or CEO, especially maybe smaller companies, they probably have equity of some capacity, and then you're asking salespeople to work as hard as you, but if you're not incentivizing them to get there, like that's just human nature. I mean, you're not. You know, you're gonna get to a certain point and you're just, you might get lucky with some people that are younger and they just wanna get after it regardless. But you can't expect people to work at the same level if they don't have, obviously not the same skin in the game, but something comparable that, that's gonna motivate them. And it's all upside, right? If it's, if it's revenue, increased revenue, then that's upside. So you should wanna incentivize people.

Yeah. And, and I think most companies, they don't mind paying commission, but, but they only wanna pay commission on the thing that would not happen unless you did it. Meaning that you prospected for it, you closed it with no help from the company. Well, come on. And I think it's important for reps, especially at startups, because the math is so simple. You go to a huge company, the math is too complicated. Meaning you go to an Oracle, you can't really determine as your Your quota realistic or not? You can look at the territory. What did it do last year? What's in the pipeline? Pipeline's bullshit. You know that, so you can take that out of it. They're hiring you. They typically big companies don't hire people to handle the best accounts or the best territories. There's people that have been there ten years. trying to claw and scratch and kill to get those or build them. They're not giving them up easily without a fight. So what do you get? You get North Dakota, right, with the population under 3,000, or Montana. That's what the new guy gets. And you might— and a lot of people, the, the OTE, on-target earnings, tricks them. There's a lot of them, and I fell into this once. Went to the startup at the time, in today's dollars would have been a $500K on-target earnings, same base as everybody else though. That sounds enticing, doesn't it? Sure does.

Sure.

Until you look at it and you're like, well, how much was done in the territory last year? None. It's a startup. And you have to sell $3 million, which would be like $6 million today. So there's no real treat in there. They just jimmied the numbers. Not only is it enticing, it's a terrible comp plan because the percentages until you make quota was so low that, you know, like, you know, 2, 3%. close a $100K deal and get $3K? You know how much work that was? You know, they did make one mistake. They paid the same on professional services as they did on software, which is a critical brain-dead mistake. And I stuffed my accounts with professional services. So I'd sell like $1 million, $2 million in software and then $3 million in services. But the margin on services is maybe 40%, not 90% or 100% like it is on software. And they, they try to claw it back, and I'm like, how? Here's the comp plan. Well, we're changing our mind. Well, I'm going to change my mind.

No, there's a lot of nuances in there. You got to be really careful with that OT, and I've made that same mistake. You were talking about, and it sounds great. You get all excited, you hear about other people making all this money, and then it's— but there's a lot that goes into it, especially the startups. If you're creating your own demand and there's not a lot of inbound, it's a whole nother ballgame. So you need to really understand what's the average deal size, how many deals do I have to close, what does this territory look like. Even if they're giving you 10 states, that's overwhelming. So how do you narrow it down? There's, there's so many factors that, that go into that. And It's, yeah, it's, I mean, maybe it's a little challenging for both sides, I guess, in some ways, because, you know, these founders or people maybe don't understand all these nuances too. So it can get, you think everything's a little more equal, but it's a huge part of the motivation for salespeople, right? So you want to try to get it right. There's got to be a somewhere in between type thing. It also comes down to, you know, who you're working for, the culture. I mean, because some of that can help with, with these situations. If you have a great manager that you respect and they're getting their hands dirty with you, that's going to motivate you to work a little bit harder to hit the numbers. If it's the opposite of that, not a good culture and people micromanaging you on top of a complicated comp plan, that's just a recipe for Disaster. So it's, yeah, that's key. But I would say probably the biggest thing is really understanding that, that OT, where, where is it coming from? Doing the math. Is there any inbound? What territory? All the stuff you were saying, like, that's so huge. I don't think anybody's really, maybe they're thinking about it a little bit, but they're not diagnosing it the same way we're talking about.

Yeah. And I used to not take a job that I didn't have a known territory. And a committed comp plan. Because the old trick used to be, hire you, get— they'd use a big base to get you in, but then screw you on the OTE or the commission rate or the territory. Because once you're hired—

They change it, change it after the fact.

Or yeah, or don't tell you what it is.

Nice. Even better.

Well, I mean, they can tell you probably the base and the OTE, but they don't tell you the territory or the quota, so they can just move those around. And unfortunately, most salespeople can't do the math in their head, and they just trust, and they get all excited, and they get bonded to the company, and then they go in and they're like, then what do you do? If you're 2 or 3 months in it, you get a bad territory, a bad comp plan, it's not a great situation, right? You know, today people just quit. They, you know, their LinkedIn profile, you have to scroll 10 times to get down to the bottom because they've been in so many companies. But if you're good, you know, you know, your first job or you're unemployed, get a job. I get it. But if you're employed and you're talented and you're doing well, uh, but the— you're open to looking, get those things on the table before you sign and start. And look for companies that have a strong sales leadership. You know, do they get sales? You know, too many times these companies are started by engineers, product people, people who invented the product, built the product, and they don't understand sales. How could they? They never did it. And they hire a sales leader who does what they're told instead of does what's right. Big difference. So you got a sales leader who's an admin Kind of implementing an engineer's view of the world. And when you make more than the CEO, the CEO gets a little upset. I remember driving my sports car into the office for the first time, and the CEO walked by me and was looking at it, and it was like, it was a nicer car than his. He was pissed. He wasn't happy, right? He, he went out and bought a Dodge Viper the next month, and he's telling everybody, oh, Brian's driving a better car than me. Yeah, because I'm contributing more to the company. Sorry. You go out at 4 in the morning to get on an airplane to fly all over the country to try and get somebody to buy this stuff. What are you doing? You're coming in at 10, lifting weights at 11. going to lunch at 12. You can, you can go in sales. You know how it works. You know, I remember driving another CEO around in the car. He goes, this is nice. I go, come out more. We'll drive around together. You can drive it if you like.

That's a great story. And I think asking those, it depends, you know, startup, you're gonna be more intimately talking to probably the founder, the CEO, depending on how How many people are working there. So, but depending on where you're at in your career and what type of role you're going for, I think you really want to ask the tough questions and you want to get this stuff in writing in some form or fashion. You're going to have to pick and pry to get them to do that. But if you feel confident about whatever you're going after and you understand what you're talking about, then you should be able to navigate that. And some of, if it is negotiable, they're always going to probably put something in there that, hey, this could change with some, you know, legal term at some point.

That's an every comp plan.

Yeah, yeah, unfortunately. So it's like, oh, but you could just change it. Great, that's very comforting. But I think that— but it's, it's more of what you were talking about. Is this person that I'm going to report to, are they, you know, have the right intentions? Or do they know what they're talking about? Did they hire good people around them? What has the previous sales history been? I mean, it— you got to get pretty deep depending on what type of decision you're making, and then ask the uncomfortable questions. I think you'd much rather do that before than after, because I've not done it before and then it's, it's too late after the fact. You're already in that, that, that situation. So, and then, yeah, if you're making more than the CEO, I mean, most the best companies, the best CEOs probably realize that that should be the case. They want to have those salespeople making more than them because they have equity anyway, which is going to be worth. Potentially way more, but it's hard for people to probably see it that way in the moment. And you gotta have a lot of emotional intelligence and self-awareness to probably see that. But that would be the best case scenario. If I was like a CEO of a tech firm and I didn't have to sell anymore, I would, in theory, maybe it would bother me for a day or two, but I would like, okay, I want the salespeople to be making more than me because that means I'm gonna have way more equity in the the payout. But there's a lot that goes into that, obviously.

So yeah. And before you take the job, ask for a copy of the comp plan. Ask if— is it a standard comp plan, or is it based on the territory? If it's standard, how do you come up with the territories? What is it? Can I get that in writing and committed to? They all have the clause that the company can change it from whatever reason without notice. That's to— it's an out, it's a back door. And everyone thinks they can sue the company. You can. Can you win? You know, I think I've seen 2 wins. There was a lady in New York that sued Oracle and won. But I see more of the opposite, where sales reps create fake orders and get commissioned on the fake orders and then leave, than I do sales reps winning it. And you don't want to play that game either. You don't want to play any of the games. What you want to do is have a solid understanding of what you're walking into. No surprises, so that 6 months later you're not crying and blaming and pointing fingers. It's up to you to ask for them. Nobody offers them to you because they don't want to be committed to anything. And how many times have I started and the territories change without notice, without reason? You know, I had one manager who hired his best friend, and all of a sudden he got the best territory. Oh, he got New York City. How, how surprising is that? Oh, he got the best pre-sales engineer. How surprising is that? People say, oh, that stuff doesn't go on. It goes on all the time. And, you know, let's face it, a good manager gives the best territory to the best reps because they want the most revenue out of it. And if you're new, they don't know how good you are. They hope you're good, so they never give you the chance. You have to earn it. You have to build.

That's the key point there, is you, you can negotiate. And obviously, if you have a previous history with that person, you can show stuff. But to a certain And at some point you're gonna have to prove yourself. Like there's only so much you can probably negotiate until you get in the door. And then maybe you can keep, depending on what type of startup it is or where they're at, if you have a good relationship with the founder, whatever, you can probably keep adding stuff once you prove yourself, which, which is good too, to have that in there. But it's all, there's a risk with all that type of stuff. I mean, you gotta, at some point you gotta listen to your gut a little bit and obviously do all the, the logical things too and ask all these hard questions. On the flip side that we were talking about, I guess the reps walking into that, but sometimes the reps, you know, let's, I guess, throw them under the bus a little bit too. They could probably be doing a lot of stuff wrong as well. That's why they're not hitting quota. I mean, you got the reps. I mean, they gotta have some accountability as well, right? So it— I'm not sure. There's a lot that goes into that too, but it seems like there's not many full-cycle salespeople anymore. It's all just— Specialized, at least. I don't know what you're seeing, but I mean, have the days of like someone that has to do everything, like I got to prospect, I got to get new logos, I got to upsell, that doesn't seem to exist as much anymore, at least in certain industries. But, um, so everyone's more specialized, but I guess what, what are the reps not doing to hit quotas is my question. And how much of that is part of it, do you think?

I think that's the other half of it. But I, I bet it's, you know, half the problem. But, you know, if you don't have a good comp plan, you don't feel motivated. If quota isn't real, do you believe it? Do you care about it? Most sales reps are happy to have a job. True. And, and you should look at them. Are they worried about quota? Are they worried about making their number? They worry about making monies. Period. That's why a lot of sales managers would only hire people that had to make money. They had expensive lifestyle, lots of kids, because when you know someone has to make money, you know what to do. And a lot of times I was single, I had no kids. So how do I know how to entice you? Trust me, I could be doing a lot of other things. I'm doing this for a reason, and it's not because I have nothing else to do. But don't you want to know what motivates your people? People are in sales for one of two reasons: they're money motivated, or they can't do anything else. So which are you? Are you money motivated, or is this the only thing you can do? Because sales is kind of like the, the toy box of careers. You know, anyone can do it. Everyone thinks they can do it. Everyone thinks they know how to do it. They think it's just personality and charm or innate magnetism. And sometimes they never give up on that dream.

That's a great point. I mean, the motivation side, and from the, from the manager perspective, you really have to uncover that because that's the type of people you want to be working on your team that are trying to make money, have the expensive lifestyle, all that type of stuff. I mean, that, that's huge for the, the managers to be doing that. The other thing with all the comp plan stuff And it, I guess once you get in, you need to negotiate this stuff as much as you can before, because once you get in there, it's going to be much harder to change stuff. I don't want to say impossible, but it's going to be, it's going to be tough. But I had a time where I worked for a big company and I just started obsessing with some of these things we're talking about. Like, man, this is out of my control. Or I didn't realize it was out of my control, but I was obsessing with other people's territories, why mine wasn't this. And it did distract me when I probably did have More in front of me that I could have been focused on, but I was so worried about this comp plan and how it was unfair and how I'd close the deal. And it was probably all true, like it was unfair in some capacity, but I wasn't focused on the stuff I can control. So I think there is a balance there because if it's really unfair, you need to probably do some work to make a move. But you also need to focus on, okay, where can I make money? Where can I prioritize? Where can I close some deals and really go deep there? And I made that mistake at times where I was a little distracted. Distracted because I was worried about other people making money. And you want to be competitive, but you don't want to be like that full comparison type thing. So it's not an easy thing to balance, I think, with salespeople, with OTs, especially bigger companies, because they're always doing all kinds of crazy stuff with your territories. So.

Yeah. And you can look at it and say, how many people are making money there? How many people have left? Why have they left? Go talk to them. Before you get in, what's the manager like? Does he treat you like a cog in the wheel or you're a person? You know, because you do have control over what you do. And you know, if someone else has a great territory, you know, do you have control over that or influence? I had one rep on the show who asked for the worst territory. Because he just wanted to prove that it wasn't a territory thing. So he got like Alabama, Mississippi, or these states, and he, he became number one. Now that attitude, whether you— that's yours or not, is a good attitude. I wouldn't do it, but I'd have that attitude.

Yeah, a little bit of crazy in there, but I like it.

I like it. Yeah, I'm gonna do this out of spite. Over to spite territory.

Yeah, that's, that's, that's awesome. That's not, not easy to do for sure. Um, yeah, I mean, otherwise you're, if you're not motivated, you're gonna get burnt out. You're gonna just, uh, just is a downward spiral. So it definitely comes to both sides. It's like, how do you give them skin in the game, give them upside, make them feel part of it? You gotta have leaders on the same page as well. And then You know, if you know, if it's very clear, it's not complicated of how you can make money. Usually salespeople that are, they're going to get after it pretty well. Now, whether they're doing the right tactics and all that type of stuff, that's different. But like, if it's clear, not complicated, that's going to motivate people. If it, if you don't know your commission plan until April and they keep changing it all the time for this and that, that doesn't really motivate people because you have to do so much work just to understand it. So, but it's a game, I guess it's always going to be a game that's played and, uh, You just have to know how to play it, I guess, and then pick the right situations and ask as many of these questions on the front end and get it in writing. And then hopefully that diminishes some of the, uh, outliers that could happen.

Yeah. And for sales managers, guess who leaves when the comp plan gets terrible?

Best people.

Right. Why don't the worst people leave?

Because they don't care. They don't understand it anyway.

But they can't get a job.

Oh yeah, there you go.

Yeah, because a lot of people are there for the base and, you know, they think it's all about the territory. Territory makes the man. That used to be the thing, but not always. Get a spike territory, take control, make it happen. Even bigger deals, more deals, faster deals. That's what it's all about. Sign up today. Put the excuses away. Yeah, excuses feel good, but they're expensive. Excuse— you know what the excuses are costing you? Tens, 50, maybe a couple hundred thousand dollars a year in lost income.

Really?

Yeah. The difference between where you are today— let's say you're making $150,000. Decent, decent income. But you know, there's other people in your industry making $300K, $400K, $500K. Well, how are you going to do that? You all think it's just about getting a better job, a better territory, a better manager. They can help. Go do that. Then what happens? It's still you there with those leads trying to close those deals. And do you have the game? Few people do. Everyone thinks they do. Why not prove it? The market tells you what you're worth. Accept it. Now become better. And the way to become better is to improve every day. Really make a daily routine of learning and developing because it's not at the knowledge level. You have to become unconsciously competent at these skills, which takes time, repetition, and emotion. And I show you how to do it, how I did it, how I've taught hundreds of people to do it. But you have to want to because I can't force you. A lot of people wish I could. So do I, but I can't. So sign up today. We'll see you next time.