The Right Motivators to Fuel Growth with Jonathan Mahan

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 kd. And today we're gonna talk about money. We're gonna talk about money because salespeople love money, right? Salespeople are motivated by money, right? Salespeople are coin operated, right? Wrong. That is not the truth. Right? And we are gonna be diving into that today because I think people forget how a coin operated machine works. Because if I go up to a vending machine which is coin operated, do I get the bag of chips and then give it money or do I have to give it money first to get a bag of chips? Even the way we describe our salespeople as coin operated is not how we actually pay them. And it actually goes against a lot of the science based research done on motivation and fulfillment. Which is why I'm so excited to have Jonathan Mahan with me today on the show. He's the co founder over at the practice lab.

Right?

Helping people truly improve their skills to make more money. But we're going to be Diving into compensation, motivation and how it ties into culture for a sales or. Jonathan, my man, welcome to the show.

Thanks, man. This is. This is one of those areas where I feel like I'm a lone voice in the wilderness, shouting against the traditional norm and the way things are done. But I know you share a lot of my views on this, so it should be fun to riff on this for a bit.

We're going to get after because we have to shout it. We have to continue to press on this because sales seems to be evolving much slower than it should be. So talk to me first on why this was the topic. I can't remember, like, what triggered this.

Right?

But you're like, yo, Katie, bring me on the show. We need to talk about this. Why did compensation trigger that type of, like, reaction in terms of, hey, we need to talk about this.

It's been on my mind for the last number of years. You know, starting, I don't know, three, four years ago, I really got into diving in, into reading a lot of books on psychology, books that weren't necessarily sales books, but of course, you know, have a lot of impact in the sales world. So we're talking Daniel Kahneman, thinking fast and slow. We're talking Dan Ariely, you know, predictably irrational. We're talking drive by. I think that's Daniel Pink, just about motivation and people's minds and how the human mind works. And I realized, wait a minute. The way salespeople are motivated through these variable heavy compensation packages, where it's like, hey, either you make 100 dials and set a bunch of meetings or you can't pay your mortgage this month. I realize that that's completely out of alignment with what science has found over the last 20 years of studying human motivation. So, like, the more time that's gone by, the more, like, entrenched in this view I've gotten, the more I learned about humans and how they work, the more entrenched this view I've gotten and the more frustrated I've gotten. The fact that everyone around me looks at me like I have three heads when I start talking about this. They're like, what are you talking about? How would we get our salespeople to make more dials if we didn't have high variable? How would we get to work hard if we didn't have high variable? Right. So at one point, I saw you write a post or talk on a podcast or something, and you kind of shared a similar perspective. And I was like, holy crap, there's someone else out there. Who sees this too. So I thought, what the heck, it'd be fun to talk on this or, you know, half hour, 45 minutes, however long we talk on it. But yeah, it's been something that's been on my mind increasingly. Right. The more time goes by. And I guess another thing that's brought it up too is, you know, I founded the, I co founded the practice lab, I don't know, six, eight, maybe eight months ago, maybe a year now. Hard to tell. And like anyone who starts a company, I thought to myself about, well, when this thing starts to grow, how am I going to run the company? How am I going to run this company? Different than others. And I've given thought to when it comes time to bring on our first sales hire, right. How are we going to pay them? So I guess that's also made a top of mind for me recently as I've really thought about how I would do things differently.

No. And I think it's something that I'm not. I understand the resistance, but I don't understand why people aren't actually willing to look at it. Right. Because the premise, right. Is like, well, if we don't do this, they won't do their job. And where I always push back and go, wait, wait, wait, wait, wait. Who else is paid this way? Okay, so nobody. And do they all go do their job? They do. So what are some of the learnings you've had, you know, kind of in your research? It's very similar. I have a lot of those books on the bookshelves behind me here. Like when you get into motivation, talk about how very like large variable compensation actually works against motivation and against like the whole premise based off some of the things you've read and learned.

So I think the first, you know, major split we have to recognize is the difference between intrinsic motivators and extrinsic motivators. Right. And of course, variable compensation is an extrinsic motivator. Anything involving, you know, pay is an extrinsic motivator. Although even things like putting someone on a pip for poor performance is also an extrinsic motivator. Right. Intrinsic motivator is where you do the thing just for the love of doing the thing. Right. The activity itself is enough of a reward for you to do that. There's no need to add something on top, whether it's fear based or gain based. Right. There's no need to add anything on top to motivate someone to do a thing. Just the joy of doing the thing. Is enough. And human beings operate pretty well with both types of motivation, right? We are wired to handle both types. They both work for us. They have different results and different outcomes based on what you're using. But really both elements should be present in any sort of strategy you have to motivate and get the best out of people. And these having the giant lever of this variable compensation that they can pull on. Sales leaders, in my experience tend to ignore the intrinsic motivation and say, well, shit, if I pay enough money, you'll do whatever the fuck I tell you you to do, right? And it's just as simple as that. So that's. That's one of the big, big, big splits is the whole sales industry is focused on extrinsic motivators. Specifically, money is an extrinsic motivator. And it works. It functions right, but it has some serious downsides. It has some serious downsides for customers, for reps, for the company, for the industry. I don't think really anybody wins by this exclusive focus on extrinsic motivators, right? For example, I think it tends to lead to salespeople acting in the way that, well, typically salespeople act, right? While extrinsic motivators do work, right? If you pay me enough money, I will do pretty much anything you ask me to do. There are some real downsides to that. There's downsides to me and my mental health and emotional health, especially when I'm in a situation where I'm kind of in a fear state, where I know if I don't make X sales and I can't pay my bills and my credit card debt is going to go through the roof and my family's not going to be taken care of. Right? There's some real effects on the brain of being in a fear state that we can talk about later. But there's also downsides in how I handle myself, right? As a seller who's entirely extrinsically motivated, you can bet I'm going to focus on just learning how to game the system to get the highest paycheck. And guess what? It's almost impossible to structure incentives that are completely bulletproof to the point where they'll always get the results you want. Any external incentive you use is oftentimes going to lead to counterproductive behavior where reps say, oh, well, if I do this, I get paid more. Great, I'll do that. May not be the best for the company, may not be what you really wanted me to do, but now I know this is the way to get the best paycheck. So this is what I'm going to do. Good example that is, I worked at a company once that wanted us to move to doing all three year agreements instead of one year agreements. So they just put absolutely massive bonuses on the three year agreements that you'd make four, five, six times as much money on a three year agreement as a one year. So guess what? It worked. We all started doing three year agreements at ridiculously low rates, Giving away ridiculously high amounts of product. That really cut off our potential for upsell in the future. Right. Used to be kind of a land and exposure. Expand, buy a few licenses now and grow later. Well, now we would just give people literally every freaking license they could possibly want for a pretty low price because we got a three year deal on it and we made more money that way. And then the upsell team was like, well, now there's nothing left to upsell because everybody already has just massive amounts of licensing and they'll never need any more than this. So the business got what it wanted, more three year agreements, but it didn't really get what it wanted because now our upsell business is killed for the next, you know, 12 to 24 months. So I guess we could go on and on forever. But the point is, when you use extrinsic motivators, there are consequences for using that. Again, salespeople's mental health tends to degrade. Salespeople tend to burn out. So it's not good for your team. It tends to lead salespeople to act in stereotypical salesy ways where they're focused on high pressure, high volume, lazy prospecting. They're focused on, you know, pushing customers, being pushy, being aggressive. Customers don't like that. This pushes salespeople into moral gray area. We don't really like to talk about this, but I don't know a salesperson alive who hasn't given an answer to a customer that they wouldn't have given to a family member. Right. Maybe it wasn't a lie, but also it kind of cloaked the truth a little bit because again, you're like, dude, I have to make this deal close. So let me just fudge it a little bit on the roadmap or let me just overstate what this integration can do just a little bit. Right? Just because I know it'll help close the deal. So that's not good for customers to go through that. In fact, it's so bad that we're seeing this like move to wherever possible customers are Finding ways to avoid salespeople, right? Any company out there who has a way to buy their service without talking to salespeople tends to attract a lot of attention. That tends to work really well for them. Heck, in Colorado Springs, where I live, there's a couple of dealerships who literally have massive banners on the outside of their door that say our salespeople aren't paid commission.

Like I was just going to, just going to jump in and say, like when we think, you know, sales is so funny as an industry man, right? Like sales leaders, sales company sales, everything. Like we say we're buyer focused. We are not. Because if you asked a buyer, would you prefer to deal with a salesperson who's paid commission or not? What would a buyer say?

100% please. Not a commission, paid salesperson, 100%.

I don't want to talk to someone who's paid commission to help me. There's already a conflict of interest and like B2C has figured this out a little bit, right? The fact that it is a competitive advantage to say that our salespeople are non commissioned should be telling us everything that we need to know. Because what's also interesting about extrinsic and intrinsic motivation is by placing an extrinsic motivator, it actually blocks the ability to have an intrinsic motivator. If you are only chasing the dollar, you actually cannot find the small joys, you cannot find the things intrinsically to work through. Right? And now you have that external motivation which again, actually, I want to talk about motivation real quick here because I think people forget what motivation means. Motivation means a change in mindset that leads to a change in behavior. Money does not motivate the vast majority of people, meaning an actually sustained change in behavior.

It does not.

Right. You mentioned like, you know, if I pay you enough to do it, all my sales leaders right now listening, I want you to ask yourself a question. If you doubled commissions, do you think you'd double results? If you went out to your team tomorrow and said, hey everybody, we're doubling commissions, do you think results would double? And you know the answer to that. Because if the answer was yes, you already would have doubled commissions. You know for a fact that would not have changed the actual results. And I've done this, by the way. I've tested, I've doubled commissions, I've tripled commissions. You don't see a 2x3x return on it. So let's flip this though. What's the alternative though, Jonathan? What? Just pay people to do their jobs? What, what would the alternative be? If I'm not doing this massive variable, how should we, or how could we pay salespeople?

So I think. I don't know if there's one specific answer to that. Right. You know, in general, I think the easy answer is more base, less variable. Right. That, that's pretty safe to say. As far as, like, what that ratio is. Do you do 100% base? Do you do 90, 10, 80, 20, 75? 25. Right. What's that look like? I don't know if I have the answer. I can tell you what I would do in my business, but I think the important questions to ask the first one is, is this base large enough that my salespeople won't be operating out of a place of fear? I think that's the most damaging part, right? Because, you know, I mean, keep in mind this does change based on the OTE, right. If you're working with someone who's got a 300k OTE 150 base, it may not be as damaging to have that high variable because their needs are taken care of on 150k for most people, right. That the extra variable goes towards, you know, investments and rental properties and savings and all that stuff. So the most important thing is you ask yourself the question, am I paying people enough base that they can take care of their needs, not have to worry about their family, not operate out of a place of fear? Because when people are operating out of a place of fear, that's when they go into more moral gray areas, right? When people are operating at a place of fear, it actually has an effect physiologically on the brain. People in a fear state have less oxygen, less blood flow to the parts of their brain that handle complex creative thought, right? Less intuition, less empathy, and they have more blood flow and more oxygen going to parts of the brains that handle just, you know, kind of basic default, repetitive tasks. So the most important thing is that you pay enough base that your salespeople don't have to operate out of a place of fear when they're not operating out of a place of fear. Physiologically, the brain can do its best thinking, do its best work. Morally, they're going to stay on the, on the straight and narrow, so to speak. So that's the most important thing. Also, though I would say, you know, to your point, Katie, I also have found that you can't really have full emphasis on internal motivation and big emphasis on external motivation simultaneously. Right. It's kind of an engineering trade off where it's like you can have a little bit of both, but you can't have all of both. The human brain is either going to focus on the intrinsic motivators or it's going to focus on the intrinsic motivators. So you got to ask yourself, is the variable piece so large that it'll kind of overcrowd, overshadow and kind of drown out the internal motivators? And answering those two questions will give you your balance point, right? So for me, honestly, my preference is not to set a specific number and let salespeople choose. Right. When we bring on our first sales hire, the practice lab, we're going to say, okay, as part of your onboarding, you can set your variable to be anywhere from probably 50 to 90% variable, right? Obviously the. I'm sorry, 50 to 90% base. Obviously the. That's the wrong direction. That's the wrong direction, yeah. Let them choose for themselves based on their financial situation, their personality, what motivates them, what they know about themselves. Because some people really do enjoy the, the high stakes aspect of sales, right? Close a big sale, get a huge paycheck, miss the sale, lose the paycheck. That's kind of that emotional up and down. They actually like it. So for them, they might choose to have more variable, but other people wouldn't choose that. So I think each field substitution should choose anywhere between like 50 and 90. You know, if you were to ask me, John, what is like the absolute best for the industry, if we had to pass legislation for the whole industry, 80, 20 seems good, right? 80 20. It'll probably keep people out of the fear response, but it'll still preserve a little bit of that gamification, a little bit of that, you know, more effort equals more outcome. Because that's, that's not a bad thing necessarily, right? To have some element of variable. I honestly would say every department in a company could benefit from having some element of variable, right? Where you get bonuses for performance. But again, it can't be. You can't be operating out of a fear place, right? You need to know that your needs are taken care of just for showing up and doing your job. Because that allows you to take more risks, that allows you to try new things, that allows you to move into long term thinking. That's another thing I think that is really toxic about sales culture is the whole organization from the top town seems to be focused on short term thinking, short term results. You know, people will say they're worried about the long term, but when push comes to shove, very few companies are willing to Take risks that would pay off in the long term if they're going to have a detriment in the short term because we got to hit this quarter's numbers. And again, if you want people to move into more long term thinking, you've got to adjust the comp plans to allow for more long term thinking.

I've lived that 100% where it's like this will work now, but to your point, this is not going to pay off later. And it forces people to be thinking short term.

Right.

Because what's interesting, right, there's the two sides of this. There's the fear side of not making enough money to support. Right? That's one side of it. But even if that idea of like, you know, 300k 50, 50 split, it still means half of my livelihood is dependent upon a external result. Right? And again, that changes the behavior in a way that I don't think people fully grasp. You said it. And I want to make sure people catch this fear. Right. And even not even just the fear, strong variable incentive for knowledge based activities, not physical activities, is where there's a shift. But for knowledge based activities, to your point, decreases empathy, that's pretty important for sales. Decreases problem solving, that's pretty important for sales. Decreases EQ iq, that's pretty important for sales, it decreases all of it. The only place that variable compensation has been shown to increase short term and long term results is physical label. Put more bolts on the tire and I pay you more for every bolt that you put on. Then you see an increase in results. But not for knowledge based activities. That's not how we are wired there.

Right.

And so what, what else are some of the things that you found kind of in the reading around motivation, right. That sales leaders could think, okay, how could I change what I'm doing to actually motivate, meaning change the mindset to change the behavior in the long run.

So glad you underscored that point. Right. That's something I don't remember if it was drive or particularly irrational, but that's something that's covered pretty well in one of those books where yeah, they have done research and found that literally when they put external incentives in place for a creativity complex sort of a task, performance dropped off compared to when they had no incentive whatsoever. Right. Like that's really important. People's ability to think creatively and solve problems diminishes in the presence of external motivation. So you're totally right about that. So yeah, the question is what does intrinsic motivation look like? Right? Like I don't think there's many sales leaders out there who are familiar with how to pull that lever on their sales team and really how to. How to work in that way. So I'm certainly not an expert on this, but I know that there's probably three buckets that I would look. One is, in some cases, some industries, salespeople may actually be really, truly passionate about the product that they sell. Right? Which means every time they make a sale, they actually see the world become a better place. Because now this company is using that. For example, I didn't actually get hired there, but I was applying last time. I was job searching for some companies who are like, in the HR space, who have different programs and software that help minimize bias in recruiting and hiring, which is something I want to be different about the world. Right. So truly, that's an internal motivator in some cases. Now, some products you sell, maybe you're selling copiers. Not a lot of people really want to make the world a better place through better copiers. So another thing is that you can really connect into how success in this role ties into their grander vision for their life. That can be kind of tied to money. Like, if you're successful in this role, you'll make enough money to buy a house. But it can even be bigger than that. One of my biggest motivators in selling, by the way, which not a single manager has ever, ever spoken to me about or uncovered, is that I believe to have the most impact on this world, I need to become a true master of communication, a true master of influence, a true master of understanding people. Because if this world is going to change, it's going to have to be people that change it. And we're going to have to get people off of the track they're on, onto a better track. So I don't really know what my future holds. I don't have specific goals, But I just know that the ability to influence people is going to be massively important if I'm going to have any sort of impact on this planet. And sales is a great place to learn that. Right? Great place to learn that art of influence. So when I approach a sales conversation, I'm not approaching thinking about, can I close these guys? I'm approaching to thinking, how good a job can I do of influence here? What are some specific behaviors that I can focus on that I want to get better at, that I can get better at through this interaction? When I lose a big deal? Yeah, I'm bummed about the commission I lost, but I'm also thinking about, where did I go wrong? Right? Where did the art of influence? Did I not execute well on it? So that's a motivator you could tap into. Is a matter of just how does being an expert seller play into your larger goals, your life, and who you want to be and what you want your future to look like? I would say too, there's even just this intrinsic motivator that all human beings have, which is that we love the feeling of mastery. We love that sensation of getting better and better and looking back at who we were a year ago and going, dang, look how far I've come. It doesn't matter what it is. Could be playing golf or playing piano or cooking or selling. Like, the thrill of mastery is truly motivating to almost all people. And sales is an infinitely complex craft that can never truly be mastered. If you can tap into that thrill of mastery motivator on your sales team, that's an infinite source of motivation that never goes away. Right. And will almost always lead people into positive, productive behaviors. Right. If you have a sales team who's addicted to improvement and improving themselves and becoming better, you don't have to come up with all these crazy, cockamamied, you know, sort of incentive plans and try to get them to do the right things. Just show them how doing this thing will make you a better seller. And again, if you can connect that to the goals and vision for their life, if you can connect that to making the world a better place, those are some three veins I would look at for internal motivation.

Yeah, that's so it's funny enough, man. Next week, if I were still running my team, we would be doing goal setting again. So we did goal setting on my team two times a year, January and June. Right. Two times a year. Full two hour workshop exercise on goals. Right. And there were the two buckets, the professional goals.

Right.

So the professional goals, how much do you want to make this year? Like to the dollar, how much do you want to make this year? Most reps don't even. That's what's also hilarious. We think salespeople are money motivated. Most of them have no idea how much they actually want to make. They just want to make more. That's not a number.

Right?

So the first is, how much do you want to make? Professional goal? Second, where do you want to go and grow? Is there a title you're pursuing? Is there growth that you are looking for? And then the third was skills, which falls into kind of that third bucket for you right, is like, I really want to master communication. I really want to get better at, you know, discovery, whatever. Like, what are your skills? Then? The flip side was the personal goals. Okay? What are your personal goals? What are you trying to do outside of work? What are you saving up for? What are you trying to do? Because although money doesn't motivate most people, you do need money for what motivates most people, whether that's travel, experiences, support, security. Right? And our job as leaders is to connect those dots. Okay, you're saving up for a home. How much of a down payment do you need? Buy when?

Right?

You do proper discovery with your people. Now you can connect the dots between the two, right? Because you need to know those things on your people. I talk about this all the time. If you don't know your people's professional and personal goals, then there is no way to motivate them because you know nothing about what they want out of life, and you need to find those things out. So we would do this every year, two times. January, July, start, January, June, January, June. Because most of us set goals to begin the year, then we never look at them again. Yeah, it's like, no, we're doing it again. We're doing a reset. We got six more months of this year. We're gonna keep the momentum going around this. And so I think that's just a really, really important call out around that mastery. Now talk about that one a little bit, right? Cause I think people get that one, you know, twisted sometimes. Like, all right, well, mastery. But when do we ever master this? So how can mastery actually be motivating if we never actually master it? Because mastery is impossible. How do you actually help someone see that mastery or use mastery to progress?

I think mastery is like, movement, right? You can feel it happening. It's not a destination. So you can feel mastery happening, right? When you do something on a sales call and you're like, dude, I did it last time I tried doing that, I fucked it up. But this time, I did it. Like, the way I handled that objection. The way I asked that question, the way I use silence effectively. Like, in my experience, when folks really tap into that joy of mastery, they stop even thinking about, am I there yet? Because, again, the process of movement feels so good, right? The process of going from where you are to where you want to be just feels amazing. Now, sales leaders can help by, like, really drawing attention to it, right? A lot of times people don't even notice mastery happening just because they're so focused on the day to day. So it's really good for a sales leader to watch a recording and send a link to their rep and be like, hey, did you notice what you did there? I've never seen you do that before. I think it's also important, you know, going into it that people are clear on what exactly they want to get better at. So that again, they'll notice in the moment when they do that thing because their attention has been turned to that thing. Which again, these are all the sales conversations I think sales leaders should be having with their people. What do you want to get better at? You want to get better? Discovery. Let's talk more about that. What parts of discovery do you think you're not good at? Oh, it's the listening you're not good at. Okay. Oh, it's the questions you're not good at. Oh, it's the silence you're not good at. Oh, it's the tone you're not good at. Great. Well, here's some, here's some resources, podcasts, training was whatever, focus on that, learn those things and then send me a recording next week of you attempting one of these behaviors. And that's how you really tune into that mastery piece is by in advance knowing what you want to get better at, knowing what good looks like, and then afterward, in retrospect, looking back in your performance and evaluating, how did I do? To me, that's what sales leaders should be helping their team through, is guiding them through that process. Right. Instead, what do sales leaders do? Follow up on clarity. Ask them about deal review. Ask them, how do we pull this in by end of quarter. Ask them, did you talk to the partner about getting real creative on these terms? Ask them about how many cold calls they're making. Like, sales leaders really just aren't leaders anymore. Right? They're just managers. And they just say, hey, are you doing X, Y and Z? And they're just making sure people do the things they're supposed to do. Because as we know, external incentives aren't always enough to get people to do what you need them to do. Right? Like, that's the other damn thing about external incentives is that once you shift someone's mind into an external incentives paradigm, suddenly everything has to be externally motivated or it doesn't get done. Right? And that's where we are in sales. We've taught people in sales the whole time they've been in the industry. You're a coin operated machine. I'm just going to give you incentives and get you to do what I Want. Sometimes it's deliberately said. I've had managers tell me I was a coin operated machine many times. Sometimes it's just implicit because every time you want the sales team to do something, it comes with a spiff. And people just kind of learn, okay, if they want me to do something, they have to pay me a spiff. And then suddenly it's like, hey, put good notes in Salesforce. And the sales reps like, there's no spiff for notes in Salesforce. Why the fuck would I do that? Right? Or it's like, hey, follow up with your customers afterward to make sure onboarding goes well. And they're like, yeah, I don't think there's a spiff on that either. So no, I'm just gonna go do my calls. And suddenly you get in this terrible place where everything has to be externally motivated. And if you can't externally motivate it with cash, then you have to externally motivate it with negative consequences like pips write ups, or just annoying slack messages from your messenger saying, hey, don't make me chase you. Get Clary done, right? And then sales managers get stuck in this trap, right, of having to do all of this external motivating on things. Because again, the internal motivation option is just not being used. Right?

What's hilarious, and I was hoping you would get here something else that they have studied with external is when there are large external, call it like variables or large external motivators, the ask becomes conditioned. Right? When you put. When the incentive is like, hey, you'll do all this and then you get paid. Well, that actually is saying those. What I'm asking you to do is conditional. It is not perceived as I have to do this. It is perceived as I have to do this to get this thing over here. And if I don't want this thing over here or I don't believe in this thing over here. It's a conditional ask. Where. So here's, here's where it gets a lot of fun, y'.

All.

And I want y' all to think about this. Who do you think is more likely to actually do what they're supposed to do? Someone on a 5050 variable, right? Yeah. You know, 75k base 75k variable. I'll pay you that 75k if you hit the numbers by doing the right things or someone who's paid 150k to do the right things. Who is more likely to actually do the right things? I am paying you to do these things or you have to do these things to get paid as much as we think we, oh, I have to do these things to get paid. It does not work that way. It becomes conditional.

Right.

Their pay is conditional. So so is your ask. It's actually that simple. Whereas if I'm paying you, I'm paying you 200k to fill out Salesforce, I'm paying you 200k to update that clarity. I'm paying you 200k to do these things changes the entire conversation in the entire conversation. So I think that's a huge, huge point that I was hoping we'd get to towards the end here is like external creates conditional on both sides. They only get paid conditionally, which means they only follow through conditionally. And that's one of the bigger gaps I also see in the sales compensation industry. Anything to add on to that one?

No, I. No, I think you hit the nail on the head there, that's for sure. You know, in this compensation heavy environment, maybe, and I don't think it does, but the very best you could expect it to do would be to drive more of the behavior that leads to immediate results, such as more dials. Right? That's about the best you can expect is more dials. All the other stuff that goes into sales success though, keeping your notes updated, helping out other departments to help the whole company grow, treating the customers right, going above and beyond that, investing in your own knowledge in the industry, all these things that have more of an indirect connection to success. You're completely shooting yourself on the foot there and making it much more difficult, if not impossible, for those things to happen by incentivizing through external motivators exclusively.

Shoot. Now I can speak firsthand. I wish dials went up because of commissions. They don't. I think truthfully, if we just took the second. So my, my leadership team, there was a question that I asked them probably on a weekly basis, if not daily. Sometimes it was iiw. IIW is one of my main leadership like mantras and themes and IIW stands for Is it working? Is it working? And taking the second to actually ask that question, is it working the way we are paying salespeople right now, Is it working? Let's look at performance. All right. What percentage of sales people are hitting quota right now? Yeah, let's just start right there. What percentage of people are getting quota? Right. Actually succeeding? Right. Anywhere from 50ish percent. That number varies 50 to maybe 60%. So immediately we got to go, okay, 50% of people, this is not working for. Then let's look at mental health. Is it Working for mental health, then it's even looking at the behaviors. Am I actually getting the behaviors I want from my team? Because funny enough, a lot of those people hitting ote aren't doing the same behaviors that other people are asking for. If we actually asked, is it working? I think a lot of us would be actually have to say, well.

No.

But, but this is what we do, kd. We can't, we can't go through it. And so I just, I wish people would ask this question more. Is it actually working? I don't think it is. And I've had the opportunity to pay salespeople to do their job. And guess what? They did, Jonathan.

Their job.

They did their job. It was weird. I said, here's what you're paid, here's what you need to do. And they did it. That was it. And it took so much of the conversations and so much of the different pressures off to allow them to actually work and improve. Which is the last point is what fear does to learning. So touch on this for me real quick because obviously you run something called practice lab. You run a skill development type company. What does fear and uncertainty do to the ability for someone to learn?

So the piece of this that I've noticed the most, and you can, you know, kind of COVID in any piece I miss, but to me, what I've noticed the most is that fear has an effect not just on the learning up front, but on the implementation part of it. Because physiologically, when your brain is in a fear response, it changes how your brain functions. And your brain has a much harder time trying out new things, running new bits of code that it hasn't run before. Under a fear situation, your brain just defaults to what's most familiar. And for true learning to take place, you have to try new things. You have to run new bits of code and say, hey, I usually handle the situation this way. But I read this book, I attended this training, let me try handling it this way. Physiologically, that's just not how the brain works under fear conditions, right? Under fear conditions, your brain plays it safe and goes with what it knows. So again, if an objection comes up and I'm on high variable and I'm worried about paying my mortgage, my brain's going into fear response when I hear that objection. And I'm not even necessarily physiologically going to have the choice to try implementing that new behavior. I learned last week about objection. I'm just going to have to go with the default because that's what my brain is for versus if I got a 90% base, you know, I want this deal to close, so I'm going to try my best, but it's not really make or break. I may be able to avoid that fear response and my brain may be in a place where it's better able to access what it learned last week and try it on for size. So on the implementation piece, where I've noticed a big difference where fear really hinders implementation of new things.

It'S already enough fear in sales as is. Take variable compensation out of the equation. There is still fear in sales. You're still afraid of that. Objection. You're still afraid of losing the deal, right? Even if the. It's not even the commission, Right. The first sting is you lost a deal that you wanted that is scary enough in its world, and then you double up on that. Well, now I'm not going to get paid. And then you triple up on it. Well, now I got to deal with my manager. And then you quadruple up on it. Now is my job at risk? Like, there's already so much fear built in. In money should be the least of it, right? So I love this topic, man. And I, I would do this in a heartbeat. If, when, if and when I step back into a full leadership role, I'll have two comp plans. Two comp plans. One will be 85, 15. Another one will be 50. 50. Here's what it looks like. Here are the minimum expectations for each role. Here we go. Right? So you can make 200k on a 50, 50. You can make 175k on the other one. The other one, though, it's mostly base quarterly bonuses. But there's a stronger floor for performance. And I want to make sure everyone listening here understands when we're talking about this, this doesn't mean your performance expectations go down. It doesn't mean now I'm just going to pay someone 175k base and let them get away with 50% production. It actually also, I think raises the bar in terms of expectations. Like, I'm paying you 175k. If you're at 50%, just like any other job, you don't get to keep it. But I'm not letting money be the variable here, and we can take that out. And so as we wrap on this, man, I got two questions left for you here, right? So the first one, right, the name of this podcast is Live Better Sell Better, right? Because I have this weird idea, right, that if we took better care of ourselves, we had more fulfillment More joy, more happiness, more energy in our lives, right. That the sales also would improve. What would your live better advice be for people listening?

A nice way to think about this, I think is imagine high performers in other disciplines, right? Whether you're looking at, you know, gymnasts or actors or athletes, part of their performance of working better is taking care of their mind and body, which is very much a live better thing as well as sell better. So my advice would be really focus on the hardware that you've been given, right? Your brain, your body, focus on that because it will help you live better in every imaginable way. But it's not going to stop there. It's very much going to spill over into your work performance too. Like I remember I used to eat a standard American diet and generally by the time 3 o' clock rolled around, my brain was really slowing down. And by the time 4 o' clock was there, I was pretty much useless except for the most simple of tasks because my brain was just. There's so much brain fog and so much exhaustion, I couldn't focus. And then I stopped eating inflammatory foods and started eating a healthy lunch. And suddenly 459 rolls around. I'm like, oh shit, 4:59 already feels like it's still 10am Right? At 10pm I'm still feeling as good as I ever did. Like you can really get more out of your life if you take care of the hardware you have, which is eating healthier, sleeping better, taking care of your mental health. That's the live better piece. But it also does spill into the sell better piece.

Always, always. Right? Energy is, is everything, you know, and like how we look at that, how we sleep. Especially early in Covid man, like I brought in like a sleep expert to talk to my team, you know, like, hey, like let's make sure we're sleeping, let's make sure that we're handling these things well because that sleep drives everything. And so I love this man. So the last question is like where can people find more of you? Where are you putting out content? Like where, where can they learn about what the practice lab is like? Give, give the little mini pitch here at the end for everyone.

Yeah, sure. So, so LinkedIn is the only platform I'm active on. So. Jonathan Mahan on LinkedIn. The practice lab is a business I co founded. In a word, it is a place where sales professionals can come to practice their selling skills using the same sort of approach of focused, deliberate practice that other performance based disciplines use such as actors, performers, musicians, et cetera. And we take that same approach to practice and we apply it to sales skills so salespeople can actually improve their skillset.

Love it. Alright, Practice is everything. Everyone on this podcast knows how I feel about practice and why that is so important. So, Jonathan, my man, thank you so much for the time, the energy, the insights, and also for, you know, working on a tough topic. Right? One that a lot of people are afraid to poke at and afraid to go after, which I am not. I will rip this stuff down all day long. So I really appreciate today, man. Thank you so much.

Hey, thanks for the opportunity to chat. Don't.