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Commission Plans

What An MBA Didn’t Teach You About Sales

The sales profession is challenging. You need to work hard at it to succeed. You need to learn from the best. You need to improve your skills continuously. If you think you can sell since you are a hit at parties and have a lot of friends, you may soon find that you are a failure as a salesperson. Blunt truth:

because the sales profession is so hard, you have to focus on doing everything in sales very well, or you will be considered a failure.

I call this blog, Skinned Knees because I try to relate all of the learning that I have done over the past 4+ decades (while skinning my knees in the learning process).

I hope that you learn from my mistakes so that your business will grow!

Transform Your Sales Team: Strategic Compensation Adjustments for Year-End Momentum

Autumn is the time of year for sales leaders, managers, and CEOs to begin laying the groundwork for next year’s success. Have you considered how your current sales compensation plans impact your team’s motivation and productivity? Now is the ideal moment to evaluate, adjust, and deliver these plans, preferably by December 1st. Doing so can significantly influence your team’s drive to close deals in December and build momentum heading into the next fiscal year.

Sales compensation should be motivating and rewarding for employees. It directly shapes your sales team’s behaviors and priorities. An effective plan incentivizes the right actions and deters the wrong ones.

Consider a common pitfall: salespeople holding back deals to inflate their numbers for the following year. Does your current compensation structure inadvertently reward this practice? If so, you’re unintentionally harming your year-end results.

To counter this, strategically incorporate compensation escalators and cliffs into your plan. Escalators progressively reward increased sales performance throughout the year. Higher performance equals higher commission rates, driving your sales team to push forward continually. 

Commission cliffs reset commission rates at the beginning of each year, creating a sense of urgency to close deals before the end of December. Communicating these compensation details clearly by early December ensures your team understands what’s at stake.

Don’t hold your team back!

Another critical compensation consideration is eliminating commission caps. While some organizations cap commissions to control expenses, this practice can backfire dramatically. Caps tell your top-performing salespeople that their exceptional efforts are neither valued nor rewarded appropriately. This demotivates your top talent and encourages them to seek opportunities elsewhere that offer uncapped rewards. 

Removing commission caps signals that the organization fully supports and rewards outstanding performance. Have you considered how much growth your company might achieve if artificial constraints didn’t limit your sales team?

When evaluating compensation, look beyond simple cost containment. Consider the true profitability of incentivizing increased sales volume. Once salespeople reach their targets and enter accelerators, each additional dollar earned typically comes at a lower incremental cost to your organization. 

Sales transactions earlier in the year have already covered the salesperson’s base salary once they have met their annual quota. In fact, at 100% of quota, the salesperson should have covered all their costs and their share of the overall company’s revenue needs. Thus, every extra sale at escalated commission rates still contributes positively to your overall profitability. 

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Two Tall Guys Talking Sales – How to Define Sales Territories for Maximum Revenue Generation – Episode 154

Sales leaders and sales professionals: are your territories setting you up for sales success or holding your team back? 

In this episode, hosts Kevin Lawson and Sean O’Shaughnessey tackle the critical role of defining territories, commission plans, and account strategies. From building fair but effective territories to creating actionable plans that drive revenue generation, this conversation blends sales management insight with practical sales strategies to help you win more consistently and grow with intention.

Key Topics Discussed

  • Defining Territories with Purpose (00:23) – Why intentional design matters more than “spray and pray” selling.
  • Fairness vs. Evenness in Territories (01:27) – Sean explains why territories don’t need to be identical, but they must be logical and fair to prevent turnover.
  • How Salespeople Should Approach New Territories (04:53) – Kevin outlines the mindset and business acumen required to succeed under a new commission plan.
  • Planning Ahead for Sales Success (08:21) – Sean breaks down how early planning impacts Q1 results, revenue management, and long-term sales processes.
  • The Power of Written Territory and Account Plans (12:23) – Kevin explains how documenting your strategies in a CRM enhances value selling and accountability.

Key Quotes

  • Sean O’Shaughnessey (01:10): “When you’re driving down the road, you’re not driving with the mirrors—you’re driving with the windshield. Defining your territory is incredibly important to know where you’re going.”
  • Kevin Lawson (06:00): “A new commission plan is not an indictment of past performance; it’s your executives telling you how and where they want the company to grow.”
  • Kevin Lawson (12:42): “When a plan is written, it’s real. You win more often when your goals and account strategies are captured, documented, and revisited.”

A Significant Actionable Item from this Podcast

Write down your territory and account growth plan before the new year begins. Identify 20 accounts to expand, document the cast of characters (champions, blockers, decision-makers), and map a path to increase revenue generation. Then, enter this plan into your CRM to hold yourself accountable and align with your company’s sales strategies.

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