A Simple Comp Plan Makes Everyone Profit with Dan Goodman
6 Jan 2023 · 38 min
Dan Goodman, founder of TruCommission, explains why simple compensation plans work better than complex ones. Reps should see transparent, per-deal reporting so they can verify their pay, and companies should offer plan choices that let salespeople pick their preferred base-to-variable mix. A straightforward plan tied to recurring revenue and quota beats complicated rate matrices that confuse everyone.
Chapters
Every company has breakdowns in their revenue process. Sure thing. Deals slip into next quarter, competitors creep in and swipe deals away at the last minute, and deals getting single threaded that don't get to power. These are just a few examples of revenue leak, but there are a ton more and they're preventing your team from reaching their sales targets. That's why I'm such a big fan of Clary's Revenue platform is the only tool that actually helps leaders take control of their revenue and thrive through any market conditions. Especially when things get tough. You can't afford to miss a single detail, but you also can't be leading by gut. Clary combines the science and the art of sales and sales leadership. So go to clary.com if you want to answer the most important question in your business. Are you going to meet, beat or Miss on revenue? Welcome to the live Better Sell Better podcast with your host Kevin Dorsey of Inside Sales Excellence, the number one Patreon group and YouTube channel for tech sellers and tech sales leaders, where we dive in deep for tactical advice on how to book more meetings, close more deals faster, and lead sales teams to success. But we don't stop there. We also focus on the person in salesperson. We talk about mindset goals, time management and so much more. So thank you for listening and if you're interested, head on over to patreon.com InsideSalesExcellence now with that, grab a notepad, get ready and let's dive into the good stuff. What up everybody? Welcome to another episode of the live Better Sell Better podcast. This is your host, Kevin Dorsey, AKA and today it's all about the money. We'll go Jerry Maguire with this in terms of Show Me the Money because what's so interesting is in the sales world, everyone believes that salespeople are money motivated, right? You pay a certain way, you're going to get the behaviors that you want. Yet none of us in leadership have ever been taught how to build compensation plans the right way. How do you actually put a commission plan in place that actually allows for the performance you're looking for? And how do you put a commission plan in place that actually motivates your people versus demotivating but also sales reps understanding how to work the commission plan to make the amount of money that you deserve? That is why I'm so excited to have Dan Goodman on the show today. He might be the only person out there more passionate about compensation plans than I am. He's the founder and CEO of trucommish and truly it's his mission right now, to make sure that not only reps are paid fairly, but they get every dollar that they deserve. And we're gonna be diving in how to do commission and comp plans right today. Dan, welcome to the show.
Thank you, Kevin. It's a pleasure to be here. Great to see you, man.
Yeah, this is gonna be a good one. Because it is. It's one of those things especially you get into leadership and they go, okay, go build a comp plan. I didn't take comp plan 301 in college. There was no incentive to behavioral theory 412. Like we're all winging this. So let's talk about this from a high level first, right? Elements of a good comp plan for a sales order. Let's start there, then start to get more narrow.
So if I were to consult with an organization about how to put together a comp plan, the first thing I would do is I would sit down and I would interview the executive team and the sales leadership. I would ask, what type of behavior are you looking to drive from this comp plan? Do you have sort of a legacy product line that's low margin, more commodity based, easy to sell? Well, you might want to incent the salesforce to sell that differently than sort of a newer project product line that's higher margin, not commodity, and sort of more challenging to sell. So you don't want to have a flat organization. You want to align the compensation structure with the goals of the organization. So that would be the first step. The second step is that you want to make it simple. You want to make it easy to understand. You want the reps to be able to understand what type of behavior you're trying to drive by putting together the comp plan. You'd be shocked, Kevin, on how often reps come to me and they have no idea how they're even paid on their comp plan. I've had reps come with a 40 page comp plan recently and asked me to review it. And there's no commission rates in it. So the other thing that's important is I would build it out in such a way that it's not complex for the sake of complexity that will drive that behavior, but not make it so that it's difficult to understand. I just work with about a half a dozen reps for a publicly traded marketing automation company. And they work in a high transaction volume, low transaction value value setting. So tons of deals every month they get paid a different commission rate on every deal they sell. There are five different variables that impact the rate up or down. 19 sub variables underneath those five for a total combination of over 500 unique commission rates that can be applied per deal in a high transaction volume setting. It's insane. Both the company and the reps are running blind because all the back end calculations are happening in the back end and they are sort of just trusting that it was all built up properly by their commission software company. So this is just examples of building a monster that's so complex that it's running away from them. And both the company and the reps are finding potentially five figures errors going in both directions.
And so let's keep going down that. Right. Because I think conceptually a lot of leaders are trying to do what your first point was. Right. What behaviors do I want to incentivize and building a comp plan around it. But then to your point, that's where the multi variables are coming in. Where? All right, well I've got three different products. All right, well that's three variables. And then I need to add in some rates on that. Well, that's now five more variables. And then I need to throw something in about like. And so like how do you I guess prioritize where you are driving the behavior without potentially ignoring something else? I think that's the driver of it for a lot of leaders is they're not trying to be complicated. They're saying, well I want to drive this behavior and this behavior and this behavior and this behavior. So now here's your comp plan to do it. How do you work with teams to I guess prioritize it or to pick what matters versus what doesn't?
Yeah. So I think what's going on with these complicated comp plans and this tweaking, it's really driving down, attempting to drive down the cost of sales. So that's really sort of the goal each year is to minimize the cost of sales, but do it in sort of a tactful way that the sales force doesn't revolt, but also that it's fair and equitable to them. So I think that if it were really just for the purposes of driving certain behaviors, you can keep that simple. You know, a comp plan shouldn't be more than say two or three pages. You don't need to have 30 pages of exclusions or come up with these one off scenarios that may or may not ever happen. The other thing that's really important about a comp plan is that it should be based on trust. Right. So if you're going to sign A have a comp plan, you should stand by it and honor it, even if it means you have to pay out a really large commission to a rep for one month. Because if you go and you break those promises, you break that agreement, you're breaking trust not just with that rep, but with the entire sales force. And that can really end up costing you a lot more than than having to overpay on a commission that you have to honor for the comp plan that you laid out. So that would be another thing that I would mention right there as well.
Yeah, and I think that's key because it does like, you know, people say, don't talk, you know, money one, you should talk about money with your coworkers. I have no problem with that. I want my team knowing what they make and all that so that they understand the good, make good money. The rest you need to level up. There's full pay transparency in my orgs, right?
Kevin, you talk in my language here. I was about to get. That's the next thing. It's. I am all about pay transparency. That is my mission. That is my passion. I have been helping Reps for over 25 years identify and recover hundreds of thousands of earned but unpaid commissions and resulting bonuses. And this is all about pay transparency. Pay transparency benefits everybody. It benefits the rep in their personal lives and wondering whether they're paid right or not and all the human emotions that touches. It benefits the organization to provide transparency. It gets the whole team aligned. It builds trust, it improves productivity and motivation and key employee retention and benefits corporate culture. It's the right thing to do. People shouldn't have to worry if they're paid fully or accurately. It should be easy to check. It should be right there. In fact, Kevin, you know what I believe? I believe that there's a law right now that says employers must pay employees fully and accurately or they're exposing themselves to triple damages and employment litigation. But I believe that the laws failed and only doing half of fixing half of the problem. I believe the company should have a legal obligation to provide any rep who they pay commission to a full reconciliation and explanation of variances about what the rep expected to earn on that deal when they initially booked it and marked it as closed one. And then compare that to when the customer is invoiced and the rep is paid on this months and months later. If they provided that level of reporting and variance and explanation, no rep would ever have to spend five minutes checking. They'd never have to worry if they're paid fully or Accurately. And they could focus all their time and efforts selling more and earning more for themselves and the company. And yet it's the right thing to do. Yeah.
It's funny because, you know, people ask me about this and reps that are interviewing, right, they're like, oh, well, you know, I have more experience. And my response back always, always is, how much experience do you have with me?
Right.
I understand you are a top performer at another company. That's great. And if you're a top performer here, that's great. But that doesn't carry weight here. In terms of pay, your base is the same as the person next to you. And if you are a top performer, you're variable will adjust for it. It's that simple. I'll negotiate on variable. I do not negotiate on bases with my teams. These are the levels you come in. Yeah. You're getting paid somewhat. You have eight years. They have three years. You're being paid the same. The expectation is you're better. So you're going to make it up on the variable side. I'll negotiate on variable comp. Bases are what they are.
One thing I like to see sometimes, and I've seen it in different organizations, I'd like to see two different plans and let the rep choose, offer a higher base salary with less commission upside, and offer a lower base salary with more commission upside. So if you want to bet on yourself, then you have the opportunity to really make a lot of money.
Now you're speaking my language. I've been talking about this for years. My dream scenario is three comp plans, three complaints, 80% base with a lower overall OTE, the classic 50, 50 or 60, 40 split, and then a, you know, 2080 split where you're like, look, you know this, and you can do it. And you're allowed one switch a year, meaning you pick the heavy bass. But you're like, halfway through the year, you're like, dude, like, I'm killing it. Like, I want to switch. Love it. Switch. Bet on yourself, Go for it. Right? Because people are motivated different ways. And I. I firmly believe having those as options is so important. So, so important to do so. No, I love that, man. Absolutely.
I mean, based on different levels of experience, your own personal situation, you know, how many bills, you have, family, so on and so forth, one scenario might be much better for the other. And why not provide that rep, that flexibility to choose? And with solutions like we have with true commission, for example, I mean, you can build out as many comp plans as you want. You can Provide them to reps at various levels of seniority and the whole thing will be automated so you don't need to deal with sort of juggling all these multiple things happening simultaneously.
Yeah, so then let's keep going down this path. Right, so the first overall theme. Right. Is ease simple. So like short and punchy. How many elements do you believe should be in a comp plan? Like how many things should reps be paid out on to keep it simple? Because like you say simple and easy and someone in finance goes, oh yeah, there's only 10 things. That's super simple. How many variables do you like to see in a comp plan?
Yeah, I mean it's not so much the variables, obviously, the fewer the better and the more simplistic it will be. But as long as you have the reporting and it's easy to understand and access and the calculations are at the forefront or easy to back up, then I'm okay with somewhat complicated comp plans to drive certain behaviors and incent reps in a certain way. Obviously the fewer the better. I mean 10 is sort of unrealistic. It really depends, you know, how many different products are you selling? You know, I mean, if you're working for a value added reseller and you're selling a dozen different manufacturer products in different categories, then maybe the company wants to incent you in a certain way to drive certain behaviors based on the financial situation with those vendors. So there are some instances where it makes sense. But you know, if you're copying reps based on whether the company that you're selling to is publicly traded or whether the number of employees it has or, or other, you know, crazy one off things that just don't have, that doesn't have anything to do with the sale itself. That just is minutia and it just causes more complexity and it makes it more difficult to track.
You know, it's so true because it is like, and people do this or I guess seem to forget that one of the first things reps do after closing a deal is look at their comp plan. If they have it, if they can access it. It's like how much I just make on this deal. So let's talk about reporting, because I do, I think this is something that just blows my mind on how many companies and truthfully how many reps out there are closing deals and have zero idea how much they just made or zero idea on how they're pacing. So then the end of the month comes, the end of the quarter comes and then the back and Forth game comes right that Friday comes, the check hits, ooh, that's less than I thought it was going to be. And now the games begin. So what type of reporting should companies have in place to prevent some of that?
First of all, Kevin, the games start even before that. The games really start when the rep is given a draft commission statement a couple of days before commission statements come out and your manager says, hey KD, here's your draft commission statement. You've got 24 to 48 hours to check it. They give you nothing to check it against. You may be in the middle of closing some big deal right now that you really can't take time away from. And oh, by the way, there is no limit on a timeframe to find a pay error. It's a legal obligation of your employer to pay you fully and accurately. It's not your obligation to find accounting's errors. So there is no timeframe associated with it. And it's more of these sort of bullying and intimidation tactics that employers use to put these false deadlines on reps to stress them out more. So that's the first thing. The second thing is that again, I believe that it's critical to show how the calculations are done up front, especially when it's really complicated. That's one of the unique things that true commission does, is that we'll actually show you how much you should have been paid on a deal, how much you actually were paid on the deal. And for example, if you have a variable rate by deal where there could be so many different commission rates applied, we'll actually show you on a per deal basis how that rate is derived right up front so you don't have to guess or wonder. We'll show you the base rate, we'll show you the five variables that impact it up and down, and then we'll show you what the rate should have been, and then we'll compare it to the rate that we actually pull right off of your commission statement, either it's listed there or derived. So it's all about reporting, ease of use, sharing the data. I mean, one of my biggest frustrations that I have, which just shocks me is some companies, not a lot that I've run into, lock down access to the data. So you're a sales rep, you're entering information in your CRM every single day, you're putting in the deal information, marking it one last. And now when you want to export it, so you can actually manipulate it into an Excel file and check it yourself or use a third party service like True Commission to help you check it. You don't have access to it. I actually got got a DM from a rep last week. This is a fantastic story, Kevin. Or not really, depending on how you look at it.
Right.
So he was inspired by my post telling folks to check their pay. He went ahead and did it. His company locked down his CRM, so he had to work off of a screen. Okay. And then he worked off of his commission information. He took literally three full days off from work, 24 hours of selling time, which if you're a million dollar rep in this, 50 weeks in a year, two weeks vacation, 40 hours in a week, that's $500 an hour his time is worth in selling time that he just took 24 of those hours to check his pay, which is worth $12,000 in selling time. He found $8,000 in errors that he had already earned that money and he wouldn't have gotten if he hadn't checked it. The company didn't want him to check it. They locked down the systems. He said, the heck with this. I'm going to go and do it because I want to verify my pay. He found all the money. The company agreed with the errors and he said that they'll be available in the next paycheck. By the way, the company has just committed a significant employment litigation issue. They have acknowledged the ERA and the rep. They did not make the rep whole immediately. They have literally exposed themselves to triple damages in employment litigation by not giving him that check to go home that day. So the rep is kind of cool about it. I told him about his rights. He's going to wait to see if it all gets paid out the next bit. But he also is looking to change the way that that company looks at things and locks down the data. It is going to make an introduction for us to go in and talk to them and see if we can help the situation.
So let's pivot the combo that direction for a second. What rights do I have as an employee, right? Because I flip this right, I put myself into an IC shoe and I go, all right, well, let me go back and check. And I go back and check. And it's like, yeah, like I'm short, right? I'm short 5,000 bucks, I'm short 10,000 bucks. But I can imagine a lot of reps being a. Afraid to bring that up, right? Of like, okay, you bring that to accounting, say, you haven't paid me enough. Like, how. How do I have that conversation? Or what rights do I have? There, because I can imagine reps being afraid to do that, like, well, but I could lose my job.
Well, I'll give you a great reason why reps potentially might feel that way. I put a post about this several months ago in August. The rep's name was Josh. We find him $36,000. He wanted to come in and check his pay. It was something that I advocate for all the time with reps. And he asked for the data to do so. They didn't make it available. He didn't get commission statements, didn't get real good access to the CRM, so he asked the manager for it. He received these types of words back. Hey, Kevin, don't you trust us? Hey, Kevin, how come there's nobody else on the team that has asked for this data? Hey, Kevin, do you plan on being here a long time? Are you part of the team? I mean, now you're going to start really questioning yourself, geez, what am I doing here? I mean, if I put a spotlight on myself, are they going to. Am I rocking the boat? Do they look at me as a troublemaker? This is your right to check. You make sacrifices every day for your employer against your family and your hobbies and your personal life so that you can sell more and earn more for yourself and the company. The company keeps Anywhere between 85 and 90% of everything you sell. You get maybe 10 or 15% on a deal. Sorry about that. So you know, it's your right to check. It's your legal right to check. The company has a legal obligation to pay you fully and accurately. Any company that discourages from doing it or doesn't give you access to it. I may want to question what's going on here. That company that I gave you a description of before, do you know what was going on there? I am 99% convinced that they were running two sets of books and that they were locking down the data and that they didn't want to expose some potential bad behaviors. They were doing it at a corporate level. And I have. I get calls all the time. I'm out there on social media talking about comp plans and severance and pips. I'm getting a dozen DMS every day from reps looking for advice and help about how to deal with situations. I've heard another three or four scenarios just in the last couple of weeks about things that looked like companies were running double books and not giving reps access to what's going on. And it's their own data.
So let's go through this Process, right? So the first step is like, I need to verify, right? So if I don't have a true commission, like, how do I verify? Like, how do I know if I'm short? Because this is, you know, it doesn't. And it's funny, some people listening might think like, how does this even happen? But like 1200 bucks missing out of a commission check, like, is easy to miss. And you take that across a year, that like, that adds up because you don't know the tax rates and all this, like, what's the first step? How do I check? And then once I found a discrepancy, how would you recommend having that conversation? So it's kind of a two part question. How do I check? Right? And then how do I actually have that conversation? Because I will, I'll take a seat on the other side of the table here. I have had reps my entire career come and say, hey, it should have been more. And I sit down and walk them through and they go, oh wait, no, you're right. Like it's happened hundreds of times, right? So there's always, you know, some call it gray area there of understanding. So let's go through one, how do I check? And then two, how do I have the conversation with leadership once I feel like I found something missing?
Absolutely. So I sort of developed this methodology going back 25 years when I was manually doing this for friends and family. And the first thing I do is I look at how much did you expect to make when you close that deal? Your customer did a virtual. And back then it wasn't virtual, it was real, but a virtual handshake agreeing to certain price terms. And to me it only makes sense that when it's time for me to get paid, I want to compare it to what the customer initially agreed to. And you know, you can book a deal. And depending on what industry you're in and implementation time frames, it could literally. And how often you get paid. I mean, some reps get paid quarterly instead of monthly. It could literally be four or five months from the time that that deal closes to the time that you're paid on it. And nobody reports on what you initially expect to be paid on, just whatever happens to be invoiced to the customer. So we go back and we look at the entire history of the deal, from inception, when it was closed, through implementation, through invoicing, and then finally to commission payout, and we compare what you expected to have happened to what actually happened. And then our system will highlight those deals. That doesn't appear that you were paid what you expected, and then you'll do a first pass through the data. So you may have 250 deals that you've loaded up. We may identify 20 that there are issues with. So those 20, you can now go look through a unique identifier that you have, go look into your system and say, hey, maybe that deal was canceled altogether. Maybe it was downsized. Maybe everything that was supposed to happen to that deal did happen, and it doesn't appear that I was paid right? So we're basically taking large amounts of data, shrinking them down to smaller data sets, and then doing a preliminary pass to identify if there are payers or not. So once you've done that pass and found that there are payers, then you submit them back to your accounting department. You provide them the deal number, the customer name, how much you expected to be paid. And really, you can just take a snapshot of our screen at true commission, because we track it at the deal level and even at the line item level within the deal to go and look at what you expected and what actually happened. And then you can use that as sort of your basis point to do so. So what that conversation should look like is just like, hey, you know, I've checked my pay. I've identified some errors. I'd first start with the accounting department and have them confirm whether it's an issue or not. Most times they will, because you've already done that first pass, and now the accounting department will then kick it up to maybe the VP of finance, or maybe you'll get your sales manager involved, and you might want to nudge the process along because maybe they might not be as motivated to take care of this, or there are other things that are going on in the company. But eventually, if you don't get satisfaction within a couple of weeks, then I would start pressing on your manager, get time frames from him on when he'll get this resolved. And then I wouldn't wait more than, say, three or four weeks and then escalated above him. And if you need to go to the CEO level, go there, go as high as you need, depending on what the dollar value is. Now, I wouldn't go rocking the boat over, you know, 500 or $1,000. You know, if. If you're making, you know, ote. But, you know, if you're looking at a 5 or 10 or 15 or $20,000, which I've seen, and I've got reps reaching out to me with six figures in commission errors, that's absolutely something that's worth pursuing. In fact, I'm in the process of putting out a post in the next week or two. And these are steps that salespeople, employees in general, should take when entering a new company so that they set themselves up for success and don't get burnt on the way out. Go and download all of your data every single month so you have access to it. Have your comp plan available and ready and understand it from the inside out. Document all adverse conversations with your management. Okay. Or any promises that are made, or any time that they're telling you that you're doing a great job on something, keep a little journal for yourself and have that. And then also if it's something adverse and it's a conversation with your manager, write a little summary of the conversation back via an email. Don't even ask for a response back. But now you have a documented trail of communication with your management about things people are being put on pips left and right. All this bad behavior that I'm seeing from companies, make sure that you set yourself up and put yourself in a position where you can respond to this and not be a victim and being taken advantage of.
So one quick note on this, simply because I know this, in the legal setting, you actually do need to get an answer back to that email acknowledgement is not agreement. And so like this, there's a case actually no in LA that went through this. Just because I sent the email doesn't mean there was agreement that that's what occurred. And so that paper trail actually does not hold up in court because it was acknowledgement, it was not agreement. So you actually do need that response back. Hey, Dan, just to recap our conversation today, can you confirm this is what we discussed? Like, you actually do need that back. Because otherwise I could just send you an email right now that says, hey, you showed me $5,000 good chat. That actually won't hold up.
You actually do need the. No, I agree with you 100%, Kevin. The purposes of what I was saying to document this back is so that you have a paper trail of what happened. Not necessarily that they've agreed with it, but you can simply say, you know, we just got off the phone from a great conversation from an hour ago. This is what we covered, this is what we discussed, and these are next steps you don't need. So it's to show a pattern of behavior and documented intent of conversations, not necessarily to use as evidence and litigation, but more to offset claim false claims that may be made against you.
Perfect. Yes. There we go, it's like, I know someone personally that like kind of went through this and they're like, look, I have the recap emails. But the lawyers were like, but they never responded. It doesn't mean this is what actually occurred. This was just your perception of that conversation. So, man, it's ugly out there.
Do you like what it really is, dude, it really is. Because this is.
As a leader, I, I struggle to understand how leaders allow this to happen. Like, the moment you start messing with people's money, like the, the trust that, that these are people's livelihoods, right? Like, and I've had a company that I worked for and it was just the one of the bane of my existence where, you know, my, my team was compensated on quality, you know, qualified pipeline. And at the end of every single month, I'd watch, you know, AES flip things to disqualified, right? So it didn't hurt their clothes, right? I was like, you're stealing from my. You're literally going into their wallet and pulling money out. Like you're stealing from them. This is not okay, right? So I think as we start getting closer to the end of this, right, Like, I want to make sure we take a solution mindset. So we've talked about. One, as a leader, build simple plans, think about the behavior, tie it to it. Two, as a leader and as an individual, have clear reporting so everyone knows right to the minute, to the dollar where they are at. You know, the third step was, you know, do. Do a little, you know, do a little recon, make sure you've been paid what you need to be paid and have those conversations. What if it's not the case, Dan? What if I'm at a company that is not transparent with these things? They don't allow these things. Do I just leave? Like, how do I make sure I get my money? Or is it just, hey, you need to kind of call your losses and find a better company to go work for.
I mean, it really depends on your own personality and your own personal situation. I've got sort of a hardened shell, so I would never sort of shoot myself in the foot from that perspective. I would never recommend anyone leaving a job without already having something lined up. I would never recommend putting yourself in a position of financial duress, although there are situations where it's such a toxic environment that it so negatively impacts your mental health that you have to get out and that you need to do that. You know, what I would do is, like I said earlier, I would document everything. I would gather all of your data, I would check all of your pay. I would make sure that you've been treated properly. If you feel like it's just not a good situation, it's not a good environment, but they haven't really done anything wrong to you, they haven't discriminated against you, or they haven't treated you misfairly or misled you or lied to you about promises that you took action on, then maybe it's just time to separate. There's nothing wrong with that. Not all employers do bad things and not all reasons for departure needs to be as a result of that. You asked about how can we fix this? What can leadership do? You know, what I would really recommend to leadership is to take more of a longer view. I mean, there's so much pressure on the month to month and quarter to quarter performance. And I think that's what's driving a lot of this really bad behavior by leadership. They're trying to earn their bonuses, they're trying to keep their investors happy, they're trying to pump up their sales and the perception of what things look like. And you need to take a longer view. You should never mess with your salespeople's money. I mean, they're the ones that are driving the revenue and helping to make the company profitable. So, I mean, if you're going to start stealing money or going back on comp plans or invoking clauses to not pay out reps what they deserve, or firing reps after closing huge quota making deals because they don't want to pay out the bonuses that I've had five different calls in the last month about a loan. I mean, the problem is that employers are acting badly because oftentimes they can get away with it, because nobody wants to sue somebody. No one wants to hire an expensive attorney. No one maybe has the data to go and fight the claim. And the only way that this is going to change is if people collectively stand up. They get angry about what's going on. They demand change, just like we've demanded change in society around the Black Lives Matter movement, around the MeToo movement, with the bullying and the mentality and the shifts that have been happening between the employer and the employee with the great resignation, the demand for remote work and the quiet quitting, and that shift of the power dynamic from the employer to the employee. I mean, people aren't going to be able to find employees to work from if they don't start treating them with mutual respect and have empathy and understand their own personal lives and challenges and work with them to help them overcome those, rather than holding them against them and penalizing them for them.
No, it's true. And it's like my hope is that that shift, you know, occurs.
Right.
Like, I've got my own thoughts on what may end up happening with, with all of this over the next, you know, five to seven years. But these are the things to ask for when you're interviewing. These are the things to ask for when you're backshelling a company is what is the pay transparency? How do I know what I'm getting paid, Right? Like my, my comp plans, man, are simple. They are maybe four elements, maybe, right? Like two to three is generally it. And there's a calculator you can punch in every single time, you know, to the dollar where you're supposed to be on a regular basis, right? My personal favorite comp plan was actually the second one I ever built. And I don't know if I'll ever get to do this again, but I think it was my favorite comp plan. Right? There was literally one element. You got a percentage of your recurring revenue, and the percentage you got was based off your quota attainment. That was it. That was it. And so early on you weren't making a ton of money, but later on you were making a ton, but also incentivized closing new deals. But also incentivize closing good deals. Because if you're closing deals that are all leaving well, you're going to be capped in your recurring revenue, right? 10% churn is 10% churn. So all that's going to leave. You're going to be capped at a certain point. And reps loved that comp plan was so simple. Every dollar in you made more of a percentage. And that was. That was it. Right? But companies don't love that one anymore. It's like, oh, well, we want to pay them once and then let that recurring.
Like what you did was a nice big sliding scale. You didn't have to worry about starting ends from different tiers. You didn't have to worry about different rates per tier. It was just tied to your ote. And then as you got closer to that, the payout was greater. So, yeah, that makes perfect sense.
And what was nice about it too, right, is it you went into a month basically knowing, right, you were gonna make a little something like, no matter what, because you already had your recurring revenue, it turned into like a secondary base, which I get, I truly believe, actually allows people to sell better when they are not worried about what they're going to make, they can actually sell. Whereas if they're trying to make money, it changes how we sell. Weird how that works, right?
You're exactly right, Kevin. And that's one of the things that we provide reps as well. We track all the recurring revenue. You know when new deals that you're forecasting are going to come on, you know when existing deals are going to expire, and you know when existing deals are going to continue to recur until they expire. So if you never sell another thing that month, you've already got a certain amount of performance in the kitty. It's like a safety net right now. You're not having that stress as you're out there interacting with your customers to try to pressure them into getting that deal in sooner.
Exactly, exactly. So as we wrap on this man, right, like, you know, I'll take it a different direction because the name of this podcast is Live Better Sell Better. Because I have this weird idea, right, like if we lived better, if we had more energy, more joy, more happiness, more fulfillment, more confidence, whatever, that the selling improves as well. What would your Live better advice be for people listening?
I mean, me personally, I went through a radical life change about four years ago. I had life saving emergency surgery. I was two hours away from death. I was 30 pounds overweight that then turned into 50 pounds overweight. You know, I was focused on myself and wasn't focused on giving to others. I was someone who sort of measured things in life and wanted to be treated fairly. And my entire life has done a complete 180. I'm focused about giving and helping others. It's the most gratifying thing that I've ever experienced in my life. I'm helping dozens and dozens and dozens of people with comp plans, with questions about pay and fairness and really any topic that they come to me, they're very appreciative. It really has impacted my life. I think it's important to have a balance in life. I exercise every day. I'm out in the woods with my dog. If I didn't have my chocolate lab Sawyer, I probably wouldn't have lost those £50 that I did. I have a ton of energy now. I'm focused, I'm passionate. I bring that energy out every day and every day is a great day right now. Helping people, interacting with people. I'm on a mission to change the way things are around compensation and to be that advocate for reps. I think it's really unfair that they are not able to validate their pay that this impacts personal lives. The money that we're finding for reps is potentially life changing. We're finding 10, 15, 20, $25,000. It can mean the difference of putting down a down payment on a home or sending a kid to college or buying a new car. It's life changing money. And it's really gratifying what I'm doing. And I'm just having the time of my life right now. It feels like my calling.
I love it. I love it. And that is live. Better advice is find that passion project. Find that thing that believe you believe and find that lights you up, right? And being able to do that. And the theme, if you all caught it there was giving. Giving is living better. When you give without expectation, it's amazing how the world changes. There's a lot of people that give, but they give with an expectation and they wonder why it doesn't make them happy. You're giving to get back, it's different. That's now a transaction. Whereas if you give to give, it's amazing how that can transform your life. So, Dan, this was amazing, dude. Where can people find you? Where are you putting out content? Where can they learn more about what you're doing?
Right now I'm putting out helpful content three or four times a week on LinkedIn. You can visit our website at www.truchommish. there's no E in true T R U C o m m I S h. You can find me on LinkedIn as well. I'm very active now. I'm having a blast on LinkedIn and we have a free app right now for reps to be able to go update their information and find and identify payers. And if you need any help, reach out to me. I'm happy to jump on a call. You can find the app@app truecommission. So that's app.trucommish.com check it out. Give me some feedback on your thoughts of it. Again, if you need help, I am there for you. I am the advocate for the individual rep and it's my passion to do so.
I love it. I love it. Like was said in the intro, y', all, true commission will show you your money, right? We'll show you where it's at and what's missing. So go get it. So, Dan, appreciate you, my man. This is amazing. Thanks for all the insight.
Thank you, Kevin. It's a pleasure, man.
You.
More from Kevin


E74: Your Agent Isn't Broken. Its Foundation Is. | Jonathan Moss, EVP Growth & Partnerships @ Experity


E73: The AI Enabling 600 Customer-Facing Reps | Lauren Hughes, VP Revenue Effectiveness @ Justworks
E68: Are You UNINVESTABLE? The New GTM Reality | Cassie Young, General Partner @ Primary Venture Partners
E67: Your Buyer's AI Is Pitching YOUR Product (Badly) | Adrian Rosenkranz, CRO @ Webflow
E64: My Team Drives 4x Revenue Per AE vs Competitors | Aviv Canaani, CRO @ Datarails
E64: My Team Drives 4x Revenue Per AE vs Competitors | Aviv Canaani, CRO @ Datarails
E63: A Product-Informed Approach for Go-To-Market (Usha Iyer: Chief Customer & Growth Officer @ Hivebright)
E62: CRO Life: from a $20B Exit, to a Hyper-Growth AI Org (Michelle Donnelly, CRO @ Crescendo)
