Mostly Growth

The Anatomy of a Great Sales Comp Plan

15 snips
Jan 16, 2026
Explore the intricate world of sales compensation plans and discover what makes them effective. From the nuances of OTE to the importance of simplicity, the hosts reveal how incentives shape rep behavior and company economics. Learn about margin-based pay structures and the pitfalls of complex plans. Delve into the role of AI in forecasting and the importance of aligning quotas with achievable goals. They also tackle the evolving landscape of customer success compensation and share practical tips for improved communication and team dynamics.
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ANECDOTE

Margin-Based Car Sales Story

  • CJ describes a Lamborghini dealer who was paid on dealership margin, not list price, which changed negotiation incentives.
  • He contrasts that with realtor commissions to show how payout structure alters seller behavior.
INSIGHT

Pay On Margin Shapes Discounting

  • CJ argues comping reps on margin reduces discounting because reps share the downside of low-margin deals.
  • Kyle notes margin-based pay fits high-margin AI products and discourages destructive price cuts.
ADVICE

Keep Plans Stupid Simple

  • Keep commission plans extremely simple so reps instantly understand how to get paid.
  • Complex plans distract reps and create loopholes they will quickly game.
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