Evaluating a Sales Role: A Right to Information
The market for sales talent is on fire. The amount of interesting, engaging, & rewarding opportunities for salespeople & sales leaders is truly unprecedented. Hopefully, this is a sign of what’s to come & predicts a quick post-COVID recovery. Nonetheless, many of us are interviewing & beginning the exploration phase of what our next role will be, and it’s important that we remain vigilant in our evaluations of people & companies, even as the market heats up. This will be a four-part post that hopefully helps you along the evaluation process, and will include:
What information you have a right to know
How to evaluate the team
How to evaluate upward mobility
How to evaluate your fit
So, let’s begin with what information you have a right to know before taking any sales role. Unfortunately, most individuals I speak with get caught up by the charisma of a certain leader or connect deeply to a product they will be selling. These can be good surface-level signals but are not really indicative of what your life will be like in a certain job at a certain company. To get to a near accurate prediction, you have to dig into the nitty-gritty and find out some real data on how the team is run & how they are performing. There are three pieces of information have a right to know before signing your offer, they are:
The OTE distribution for reps
This is fairly straightforward, and the subtext is what % of reps beat, hit, & miss quota, and for the folks who beat or miss, what is the magnitude of the deviation. Many people will ask a form of this question which looks like “what is average attainment?”, and although a good question, it lends itself to power-law dynamics where a couple of great reps can skew the average up. It’s important to know what % of the team is below quota, and specifically, how below. A healthy total is 20% missing & 10% missing by more than 20%. If these numbers are higher, it’s a good place to dig in and understand why. There may be some perfectly good reasons such as a high % of the team is ramping or a market change that hasn’t been adjusted for yet, but if there isn’t, and it’s chalked up to the way it is or “the high bar that has been set” (bullshit) I would have my cautionary antennas up.
In addition, there are two ways employers try and get around a bad answer to this question. They will either shrink the time aperture and say something like “everyone hit last month”, or they will shrink the rep aperture and talk about the renegade rep who is at 300% to quota. These are lovely tales but you want to understand what the last 12 months have looked like not just last month, and you want to know about all reps, not just the one superstar.
The number of times quota was changed & by how much
Quotas go up, it’s fairly normal, & should be expected. That being said, quotas being sporadic & ever-changing is not. It’s important to dig into the history of how often quota has changed over the last 12 months, by how much, and what the plans are for the next 6 months. If the quota was changed more than three times, it could be an indicator that the company is disorganized, in a state of flux, or at its worst has a disregard for the mental peace of the team. The size of the changes is also important. If they are going up by more than 10% in single jumps without warning that will meaningfully change earning potential and is something I would be digging into to understand better. The caveat to all of this is to understand the stage of your company, if it’s Series A or before, or recovering from being walloped by COVID, I’d be more forgiving on this point as it’s more normal to still be figuring out where to land on quota.
The turnover rate
You want to understand what % of the team is leaving the team annually. Sales attrition is normal, we all know this, and it will always be higher than other departments (for reasons to be discussed in another post), but there is a line where it becomes unreasonable. That line is 40% annually, and really if it’s over 30% I would be asking a lot of questions as to what is causing attrition. Generally, causes will come in one of four forms:
Performance-based: Reps are missing quota and are either getting fired or leaving on their own due to earning potential.
Culture-based: The environment is rough or unreasonable.
Progression-based: Earnings or role don’t increase over time.
Cohort-based: A group of reps hired under former pretenses, or former leaders, leave at the same time.
You need to dig into which of these is the main driver in why people are leaving. I’m generally OK with cohort-based, as it’s a signal of evolution and that the original thesis on what a rep needed to do at a company changed. I’m less OK with the other three as they can be indicators of larger problems.
To sum this all up, you have a right to know what OTE distribution is, how often quota has been changing, and what % of the team is turning over annually. The numbers I provided in this post are baseline guides & shouldn’t be treated as binary reasons to take or not take a role, but instead as cause for digging deeper on specific topics. I would note that you should ask for this information towards the end of your interview process, not the beginning. Your company may have to do some work to pull or format this information for you, and it’s best to have them do it once they are incentivized by wanting to hire you.
Later this week, I will share how to evaluate the team you will be joining from the board level down to your peer group. If you’re in the process of evaluating a new role, I am happy to help personally - drop me a note at email@example.com