Did you miss last week's Vitally webinar, “Building Out a Compelling Commission Structure for Post-Sales Teams”? This blog is here to cure any FOMO you may be feeling and provide you with the biggest takeaways. This informative webinar brought industry leaders from Electric, Symplicity, Betts, and Spiff to discuss customer success teams' compensation plans. These expert panelists included:
- Christopher Kong, Manager of Account Management @ Electric.ai
- Christopher Guzek, Senior Director of Global Client Success @ Symplicity
- Maxwell Sadler, Senior Solutions Architect @ Spiff
- Lamar Nava, Director of Customer Success @ Betts
Throughout the webinar, they shared nuggets of wisdom on how to set up commission structures that get Customer Success teams excited. They provided nuggets of wisdom on setting up commission structures that get the customer success teams excited. They also broke down the pros and cons of different bonuses vs. paying out commissions, plus how to balance limited resources when designing a post-sales commission structure - a topic that can be tough for tech startups to navigate. All in all, this webinar was essential for anyone interested in figuring out customer success teams' incentive plans. Let’s dive in!
Question 1: What factors should you consider when deciding on a post-sales commission model?
When it's time to reward post-sales staff, companies have plenty of compensation models to choose from. Base Only is the standard issue; for those who like a little extra motivation, there's the classic combo of Base + Bonus - and if you're looking for something more advanced, try out Base+ Variable. Your choice comes down to your company’s maturity level – just make sure that whatever model you go with provides enough incentive!
Lamar: “The biggest thing, I think, when you're considering a base-only package is there's no incentive to over perform. So your team isn't incentivized to go above and beyond. And there's really no repercussion to underperforming as well. So typically, you know, and this is not for every company. But though the companies I usually work with that I have a basic package, the CSMs are usually incentivized to do kind of just the status quo or the bare minimum.”
Chris: “So the difficulty of creating inequity for somebody with a large book of business versus somebody from a scaled perspective, the [base + bonus model] was easier. I think some companies looking at developing a commission plan should think about that kind of that makeup, right? When [the company is] scaling, [the company needs to] make sure that the equity between the book of business for each CM can allow for that attainment so that one person is not getting the same opportunity.”
Question 2: Compensation plans for CSMs vs. AMs vs. Implementation/Onboarding vs. Solutions Architects – How should they overlap and how should they differ, given both have responsibility for the renewals of the same customers?
When piecing together commission structures, the biggest core values are gaining the customer’s value quickly, developing customer advocacy for your product during the implementation process, and ensuring the customer is satisfied with onboarding. The post-sales experience should be made as smooth as possible, and client satisfaction is key because if we make our customers happy during onboarding, retention can take care of itself.
Chris G: When building a CSM vs. Account Manager “commission structure for implementation and onboarding, I was focused on time to value, time to advocacy, and customer satisfaction during the onboarding process. That then fed into, from a client management perspective, what they were measured on by customer satisfaction, [which is] growth and retention. So, I looked at them equally [because] they are bringing the client through that post-sales experience. [I was] incentivizing based on where the implementation manager/onboarding individual could impact client health and the overall relationship.”
Chris G (with another great quote): “When I started to develop a process for looking at client health, I realized there was a component of client health that started at [the beginning of] implementation. To ensure that [our] clients come through the onboarding process healthy, I looked at the time to advocacy [metric]. So, once the [client] comes out of the implementation process, are they advocates for our software? Are they referenceable? [Another metric was] the time to adoption. Once we've sold them and identified pain points, have we addressed them [with the implementation process]?”
Question #3: How do you determine or select the right metrics to track for post-sales commission?
It's not always obvious metrics are the right metrics to use when it comes to commission-tracking. For them to be effective, it is critical to reflect on the business’s goals at both a high and departmental level. Also, remember that these metrics must be measurable - whether objectively or subjectively determined. Sounds like a lot of work...but at least it's not rocket science right?!
Max: It’s common for departments not to know “what the correct metric is to apply to a team. And often, it's not necessarily the most intuitive one that aligns with your business goals. The metrics have to align with what the business goals are at a high level as well as within this particular department.” In other words, “what does the department need to solve as a whole? And how can we implement a metric that will help to impact that problem? [Additionally,] the metric also has to be measurable. So is it objective? Or is it subjective? I think it's fine that it's subjective. But you have to be very clear and [there must be a] concise understanding between the people that are actually measuring it and the people that are trying to achieve it.”
Max (& his hot take on using the “Customer Satisfaction” metric): The metric “has to be achievable, and the team that you're measuring [can] actually [make an] impact here. I like to call out customer satisfaction here. I'm not a huge of using the [customer satisfaction] metric. That's because there's always going to be that one outlier, right? If you have a relatively small sample size for the people you're measuring, there could be just one customer that had one issue, and that can throw off the whole thing. So if you are going to do something like CSAT, maybe consider polling between the whole group measurement.”
Question #4: What commission structures generally do not work well for post-sales teams? Which factors could lead to a commission structure not working well for post-sales teams?
Customers come in all shapes and sizes, as do post-sales teams. It's an age-old conundrum; crafting a commission structure that works for everyone involved is no easy feat. The key to success? Tailoring your plan around each team's unique needs and ensuring every team member feels their best work is rewarded in whatever way motivates them.
Chris K: “I think it really depends on the type, the size of the business, and also, if it's a commercial or support/success role. Because each role, if it's commercial or support/success, they're gonna have different objectives. I saw someone in a chat say, ‘Well, my team isn't really financially motivated.’ [In my opinion], they might care a little bit more about helping customers and feeling a little bit more valued, while maybe someone that's generating revenue cares more about how much they're getting paid out towards the end of the quarter in commission.”
Max: “Regardless of where these teams sit, it's absolutely essential that you have open lines of communication between them. Really clear paths for knowledge transfer and overall alignment on the objectives. There's a really interesting interplay between the original rep who sold the deal [and the CSM]. [For instance], what was the original objective there? Was it simply like, we're selling all the business upfront? Or was there a planned upsell in the future? Was it a ‘land and expand’ kind of model? [These answers are] going to carry on to your renewal teams, whether that be customer success, [and your] farmer teams responsible for upsells.”
Question #5: Suggestions on ensuring that all CSMs (regardless of customer tier/Customer Success model) have a similar opportunity to gain commission?
CSMS must have an equal opportunity to gain commission, no matter the tier or model of the company. But how can that be ensured? One way to do that is by finding or implementing common team goals. That way, everyone is marching towards the same goal, and commission opportunities are equal across the board.
Max: “Renewals and growth are increasingly becoming an all-hands-on-deck kind of approach. So it's important to find the ways that these [two are] related. For example, customer success might be focused on renewals, and professional services might be focused on throughput. But there is a link there that you can definitely focus on. It might be something like time to value, [that way if professional services are incentivized to provide value and finish that implementation sooner [rather] than later, then that's going to set up customer success better when it does come time for renewal.”
Max (short, sweet, and to the point!): “I believe there are ways you can find those linkages between teams to all be marching towards the same goal”
Question #6: What are some creative SPIFF (Sales Performance Incentive Fund) ideas to incentive post-sales teams?
Money isn't the only way to reward hard-working post-sales teams! At Spiff, they get creative with incentives. From fully expensed trips and recognizing top performers each quarter—like those who score high in NPS scores—this company knows how to show appreciation for their staff's commitment and dedication!
Lamar: “This question has two parts. What can you incentivize people with and then what can you incentivize people on? We looped our customer success team into our President's Club, really fun trip that a lot of companies take and usually is for mainly revenue producers. [Another thing we did was] the highest performer on every team takes a trip out to Red Rocks Amphitheater So [incentivizing] trips is a good idea if you have people on the team that like to travel.”
Lamar (focusing the spotlight on Spiff’s CS team): “For our CS team, we do a couple of different things. For someone just starting out in the organization, we give them a prize for their first upsell and their first renewal. [We also do] quarterly awards for the highest adoption on the team, the quickest time to adoption, the quickest time to value, the highest NPS on the team, and like little mini awards for the top producer in each of those categories at the end of the quarter.”
That's a wrap, readers!
Was this blog not enough to satisfy your curiosity? Learn more than what you read in our blog post with the on-demand recording of this webinar. You’ll hear more expert advice on compensation models that aren't available anywhere else, and we guarantee knowledge growth with each viewing! And if you really need closure on your curiosity journey - schedule a demo with Vitally today!