How Do You Know If It's Your Salesperson or Your Commission Plan?

A client in energy services told me this morning his salesperson isn't producing, and his first instinct was to pull back the production plan to match. Fewer crews, slower ramp, smaller year. Shrink the company to fit the person who isn't selling.

We killed that idea in about four minutes. The product is strong. The install teams are good. Demand is there — booking lead time sits at four to six weeks right now. None of that changed because one person stopped picking up the phone.

Why do owners shrink the plan when sales goes soft?

Because it's the only lever that moves without a conversation.

Firing someone takes weeks. Rebuilding comp takes a Tuesday you don't have. But cutting the third crew from the plan? That happens in your head on the drive home, and nobody argues with you about it.

The problem is the two decisions run on different clocks. Adding a third production team pushes lead times to about eight weeks, which means you need sales capacity months before you need the crew. Shrink the plan today and you've solved a sales problem by capping the company. The salesperson keeps their job. You lose the year.

Keep the plan. Fix the comp.

What's wrong with sliding commission tiers?

His current plan uses sliding revenue-based tiers. More revenue, higher percentage, stepped brackets.

Ask the rep what they'd make on the proposal sitting in their truck and watch what happens. They can't tell you. They'd have to know where they land in the bracket for the month, which depends on deals that haven't closed yet, which depends on things they can't see.

A plan that requires a spreadsheet to interpret doesn't change behavior in the field. It just gets reconciled at month end. The rep learns to treat commission as a surprise that arrives on the 15th instead of a number attached to the thing in front of them.

Complexity in a comp plan is a tax on effort. You're asking someone to do arithmetic before they get excited.

What does a simpler plan look like?

Two shapes worked when we whiteboarded it.

The first: flat commission on every signed deal, same percentage from the first dollar, plus a milestone bonus at every $500k in signed revenue. The flat rate means the rep knows their number before they knock. The milestone gives them a reason to push a deal over the line in the last two weeks instead of parking it in next month's pipeline.

The second: quarterly commission tied to revenue or profit, paid on the whole quarter. Longer cycle, bigger check, better fit if your sales cycle runs past thirty days and you want the rep thinking about pipeline instead of this week's close.

Both beat brackets. Both fit on an index card.

If you go profit-based, be ready to open the books enough that the rep believes the number. A profit commission on financials nobody sees is a discretionary bonus wearing a costume.

Should a new salesperson get a guaranteed period?

We landed on a soft landing of 90 days to six months — some floor while they build pipeline, then full commission.

The case for six months: a real rep needs a quarter to learn your product and a quarter to fill a funnel. Pay them like a beginner for two quarters and the good ones won't take the job.

The case for 90 days: every month of floor is a month you're paying for pipeline you can't inspect. Six months of guarantee against a four-to-six week install cycle means you'll know by month three whether this works, and you'll pay for three more months of knowing.

Most owners I talk to overpay for the ramp and underpay for the win. Shorten the floor. Raise the milestone. Let the person who's good get rich.

Can you actually hire someone with high effort and high skill?

This is where he got stuck, and where most of them get stuck.

You want a rep who works hard and sells well. That person exists and they already have a job. The ones on the market usually bring one or the other, and you're picking which gap you'd rather train.

Effort you can't teach. Skill you can. Product knowledge, discovery structure, follow-up cadence — those are documentable, and if you've got templates and a tracker they transfer in a month or two. What you can't install in someone is the willingness to make the call they don't want to make.

That's also why the comp plan matters more than most owners think. A simple plan pays effort on a short delay. A bracket plan pays effort on a delay long enough that the person stops connecting the two.

The other trap is the hourly-versus-commission argument. Pay hourly and you get someone who's fine either way. Pay commission and you get someone who needs the deal. You already know which one you're building for.

What if the operations side isn't ready?

Then don't hire the rep yet.

Sales capacity is worthless if the schedule can't absorb it. His constraint right now isn't leads — it's whether his ops lead can own the schedule without the founder in every conversation. Until that's true, a great salesperson just builds a backlog and a reputation problem.

So the sequence is: get ops running clean, get the ops lead to full capacity, then hire sales into the room you made. Not the other way around. Hiring a closer into a company that can't install is how you turn a sales problem into a refund problem.

The comp plan gets built now, though. Design it while you're not desperate. The plan you write when you need someone in the seat this month is always worse than the one you write on a Tuesday with a whiteboard and no candidate.

He's got Tuesday blocked. Two hours, no calls. The old tier chart comes down before the new one goes up.