Cut the Check

When I sign a big FAT commission check I’m ECSTATIC.

Why?

It’s the best advertisement money can buy
1. To all our other reps: “You too can make a metric ton of money if you work hard and close game changing deals”
It means the company is more valuable
1. If your company garners a 10x revenue multiple (FANCY!), a $1M ARR deal roughly equates to a $10M bump in valuation.

There’s an archetype of the stingy CFO, angrily staring at a sales rep commission check before they sign it. A miser, counting their pennies and trying to hold a good man down.

But I firmly push back on that old world view. The great CFOs prioritize enterprise value over short term expenses. You’ve got to spend money to make money.

nspiration from RepVue CEO Ryan Walsh: Tweet

Reps Talk

I probably won’t win a Nobel Prize for this theory, but Sales reps talk. They talk a lot.

When someone crushes their quota, the other horses in the stable start doing the mental math on how much they took home. It’s a tale as old as SaaS.

Put simply, a big check helps with both retention and motivation.

Here’s a hypothetical “healthy” distribution of ten reps, from talking to Ryan Walsh, CEO of RepVue (link to pod at bottom):

1 rep totally crushing it (like 200%)
1 rep ahead of plan (like 120%)
4 reps hovering between 85% and 95%
2 reps hovering between 75% and 85%
2 below 75%
- Either ramping or being managed out

At one company I worked at we had this Big Deal guru named Keith. He was a rainmaker in the Enterprise. No lie - the younger SMB reps made a fake shrine to him in the office, made out of empty Starbucks cups and Snus cans (Zyn wasn’t a thing yet). After he closed the biggest deal in the company’s history, they penned poems about his achievemenents. He was a living legend in the bullpen.

Keith made big commissions. Keith was an advertisement to the other reps. Reps wanted to try hard and be like Keith.