sales-compensation

Installation
Summary

Design sales compensation plans aligned with business goals and customer retention.

  • Starts with the standard 50/50 base-to-variable split, then adjusts based on sales cycle length, customer churn patterns, and business model to avoid misaligned incentives
  • Emphasizes tying compensation to customer outcomes and net dollar retention, not just closed bookings, to reward sticky deals over churny ones
  • Guides ramp structures for new hires (3–6 months for SMB, 6–12 months for enterprise) with guaranteed draws or reduced quotas during onboarding
  • Flags common pitfalls: over-complicated plans that confuse reps, missing churn accountability, and accelerators that kick in at wrong thresholds
SKILL.md

Sales Compensation

Help the user design effective sales compensation plans using frameworks from 2 product leaders.

How to Help

When the user asks for help with sales compensation:

  1. Understand the business model - Ask about their sales cycle, ACV, and customer retention patterns
  2. Identify current problems - Determine if there are misaligned incentives or retention issues
  3. Design aligned incentives - Help them create comp plans that drive the right behaviors
  4. Consider ramp and quotas - Guide them on structuring pay for new hires

Core Principles

The standard 50/50 split is a starting point

Jason M Lemkin: "It's usually 50/50, right? 50% base, 50% bonus for a sales rep." The standard OTE structure is 50% base salary and 50% variable commission. This is a common baseline for quota-carrying roles.

Traditional comp plans are misaligned

Related skills
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First Seen
Jan 29, 2026