8Motivation through Sales Compensation Plans and Contests
Whether you're a CEO or a VP of sales, the sales compensation plan is probably the most powerful tool in your tool chest. In thinking back to the critical strategic shifts HubSpot made as a business, most of them were executed via changes to the sales compensation plan.
People often ask me, “What is the best sales compensation structure to use?”
That is a very complicated question. The ideal plan is contextual not only to the type of business, but also to the stage of growth that business is in. In the first six years of HubSpot's growth, we utilized three different sales compensation plans, each of which was appropriate for the stage the business was in at the time.
I've provided a description of these plans ahead.
Plan 1: The Hunting Plan
The first compensation plan we ever had at HubSpot was very oriented toward “hunting” new customers. It was the right plan for the time. We had 100 customers. We were at an annual run rate of barely $300K. We needed to acquire customers quickly so that we could accelerate our path toward product/market fit and gain a deeper understanding of what could make our business model sustainable!
The first plan paid each salesperson $2 upfront for every $1 of monthly recurring revenue they brought on. For example, if a salesperson closed a customer on a $500 per month ...
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