#67: Listen as Ben Rubin, Senior Business Development Strategist at Remotish, discusses commission versus commission-less sales models. Ben and Tyler examine harnessing motivation, where companies go wrong, and how fostering happiness impacts job performance and recruitment.
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Check out the full transcript of this episode below:
The Sales Lift Podcast
Building a Non-Commission Sales Culture w/ Ben Rubin
Hosted by: Tyler Lindley
[00:00:00] Tyler: Hey, Sales Lift Nation it's your host. Tyler Lindley. Today, I have Ben Rubin on the podcast. Hey Ben, how's it going is going
[00:00:07] Ben Rubin: great.
[00:00:08] Tyler: Oh man. Ben, you're rocking that beard. It's inbound week. It's been a busy week. It's been
[00:00:14] Ben Rubin: so busy, so many sessions, so many great presenters, so much great information. I love it.
It's been awesome. And then the close with Oprah. Oh know, oh my God. That's always a strong,
[00:00:26] Tyler: close with Oprah. Yeah, for sure. So inbound was last week. This will be coming out the week after inbound, but yeah, Ben is a senior business development strategist at Remotive, which is an absolutely fantastic agency and he does sales there.
And that's exactly what we're gonna talk about today is we're going to talk a little bit about sales, specifically commission versus commissionless sales models. I know this is something then that you've been diving into a lot. And this is such a unique topic. When you think sales, you're always thinking quotas or thinking committed.
But you've been looking into the commission plus model. How the heck does that even, and
[00:00:59] Ben Rubin: work? It's interesting to think about right commission as a motivator, as this extrinsic motivation to get you to achieve an objective. And then when we look at it, though, when you've got OTs, everybody's got an OTE, but then you hear you find research that talks around people and sales reps.
On average, we get 50 to 60% of people hitting quotas. People are setting higher OTs. Like their quota seems to be higher so that the company continued to grow, but then you still have this missing alignment between what people are actually hitting and where they're getting to that point. Quick example.
So let's say you've got a. 1.5 mil. Yep. You got 5% commission on that. That's going to get you 75,000 in commission. Okay. Let's say you've got a base of 70. So now your OTE as I would be hiring you, Hey, you've got an OTE opportunity of 1 45. Yep. Cause
[00:01:54] Tyler: you plus 70 plus the 75.
[00:01:56] Ben Rubin: Yeah. So you're at your OTE on target or.
And if you hit that, then you earn 1 45, but then you go back and you read the research where 50 to 60% of people are only hitting quota. So then you have 50 or 40% of people that aren't hitting quota that are down at a price point and an actual earning that's closer to probably. One 20
[00:02:16] Tyler: ish, maybe even that, yeah, one day, 100, 1 20, somewhere in that vicinity.
[00:02:21] Ben Rubin: And then to try and find what's driving the behavior to go from an OTE or a quota earning of 100, 1 10, 1 20. How do you get that person to get to 1 45? Then you have to try and find this intrinsic approach to motivate somebody, to get to a point where they're at an earning an income that satisfies their needs.
Right? So we're looking at it from an approach. Instead of trying to put a quote on you, that's higher than what you can probably achieve. Some will achieve it. We've got the hunters out. Yep. But let's look at it now say I'm going to give you a quarter of a million. You can hit that. I believe that 5% commission.
So now you're looking at 50,000 in commissions on top of again, that 70,000 say based, this is just an example. Now I'm going to pay you. One 20 in salary, instead of saying I'll pay you 70 in salary, and then you've got to earn on top of that. We'll pay you on. That's your salary check coming in. Yeah. Now you hit 1 million and that will start talking about a bonus structure on top to try and still drive towards higher growth.
[00:03:24] Tyler: Interesting. Do you think, it sounds like you have the guarantee, you take the base up to an attainable level to where most people in your example can get to that million mark, and then you still have maybe a commission structure on top of that, for those that overachieve over that million and your.
[00:03:40] Ben Rubin: Yeah.
And the concept, and this is all tons of research and time that I'm trying to spend on this right now to identify what's this good blend of setting a salary point in a quota. And then how do you then continue driving on top of that quota that says, no, that doesn't mean you're only capped at one 20.
Because you hit your quota of a million, but looking at it and how you can then, uh, spare for something on top of it, that would say, as you continue past your quota, there's then now this opportunity, it may not be something that's. So commission-based, or maybe it's a bonus or spiff based on stages on past that.
[00:04:14] Tyler: So it sounds like one thing that you brought up there is do you think that companies are just setting the quotas too high for those that are doing a traditional model where it's half bays, half commission, are the quotas just set too high if only half the reps are hitting them? Or is that actually ideal?
I don't think you want a hundred percent of reps sitting quote in an ideal situation. A certain percentage, but is 50% too low or the quotas too high. Where are companies screwing up? I think
[00:04:39] Ben Rubin: it's different. I think there's going to be a ton of variables involved in each of the companies. The remoters we're a service based company, not software, so very different in our space versus.
Uh, software space where you can sell software over and over and over and over and over again. So then we talk about scalability of setting quotas higher in different spaces, industries, and services. That's what I think is a little bit of a tricky part, because you can find tons of articles, research stuff about there with commission people in the SAS space, but we're service.
So it's trying to figure out a problem inside of our space that everyone might not be going through the same kind of. I do think it's a little challenging to land on one specific thing that says the companies are setting the quotas too high, or the people aren't achieving enough, but you also look at it and you've got to think what drives a behavior.
And then if this company has X revenue goal year over year, how do they get there? Knowing 50 to 60% of their reps are only going to hit
[00:05:35] Tyler: quarter. So does the research show that if we move to a model where there is basically more guaranteed salary and the commission become, maybe there's some extra variable on top of that, but the base basically moves to the majority of someone's salary.
Is the motivation the same? You talked about that intrinsic motivation. I feel like that commission, that variable comp, when it's half yourself, That's a good reason to get out of bed in the morning. It's a good reason to push at the end of the month. It's a good reason to make sure that you're hitting quota most months to make sure you're putting food on the table for you and your families is the intrinsic motivation.
The same if it's guaranteed versus if it's.
[00:06:10] Ben Rubin: That's a great question. And I think, again, it varies, but I come at it and look at it. Okay. So our example, service model company, I wake up and I've got to sell, I go into a selling role, but our role isn't necessarily this hunter like go get. Approach. We're a very consultative, strategic selling process.
So I wake up and that's my job. That's what I get paid to do. And then when you think about it on the other side of where it's like, why would you drive someone's behavior off of just that commission when everyone else in the team, whether it's customer service, if it's management has to wake up and do a job, how do you find the pieces that make it rewarding to still wake up and do what you're supposed to do in your performance?
I'm supposed to say. Why do I need to have this extra piece of motivation that says my job is to sell. We could be getting into some hot topics with some other people, but I think there's a thought here that Nicole and I have chatted Nicole, our CEO, founder, you've had on the show as
[00:07:09] Tyler: well. She's been on the podcast
[00:07:10] Ben Rubin: before.
Yeah. We're just going at this thing trying to figure this out because those are the problems to solve because then as well, you're going to eliminate so much of the talent that you could have by going to this. You think that
[00:07:22] Tyler: it limits the amount of does it, because the reason I feel like that quotas and commissions exist is because that's just how it's always been, but it doesn't necessarily mean it's the best model or the most motivating model for sales reps.
It's just, oh, that's how everybody does it. So that's how we'll do it. It's such an interesting point that isn't the best way who
[00:07:41] Ben Rubin: knows. And then a shout out back to your post. You did the other day about. Sales is about balance. If we can give you the balance that says, we're going to give you a really nice earning potential, you still have performance metrics that we need to go after, because we still have to go.
We have to drive goals in revenue, but if you take away that piece of this heavy stress, doesn't that seem like it would give you back. Yeah, sustainability. I just got to wake up and do my job. Tons of people have a need out there for your service, for our service, for their service for software. So it's aligning on what you're supposed to do and wake up every day and get excited about aligning and finding these really good client fits and these really good relationships and partnerships that then drive you to your end result.
I'm so glad
[00:08:28] Tyler: you brought up balance and stress because. I think that's at the root of this issue. And I think when we think about here, I talked to new sales reps all the time. Why are you getting into sales? I'm getting into sales because I want to control my own income. I want to control my earning potential.
I know that if I just push harder, I can make more. But as we both know, That doesn't always mean you hit quota and you're actually making more, you're going over quota. Yeah. Sometimes that'd be just burning out to make less sometimes, which is a vicious cycle. It's a vicious cycle and it's why mental health and sales it's a hot topic, but it should be a hot topic because it's hard to do that day in and day out and have that quota hanging over your head and know that half of your earning potential is based on, is this person gonna sign this contract or not?
[00:09:12] Ben Rubin: that's stressful. It is. And then the part that's a bummer about this is your customer suffer because you're stressed out now and you're coming to these calls with stress. You're coming to these calls with really good probably sales tactics to try and get someone to close a deal. But you're also driven at this thing at the end of the day, subconsciously you're saying.
I've got a quota to hit. I have to hit this number. It's the end of the quarter. It's the end of the month. And people feel that. And I think back to the balance, back to authenticity and you being yourself and when you relieve and remove those stressors, it feels like you should be set free then. Yeah, exactly.
To bring in the best partnerships to your company.
[00:09:51] Tyler: I totally agree. Even your dogs are getting excited. I can hear them. They're getting, they're getting fired up. You're fired up. They're fired up. Everybody's firing. Yeah. That's
[00:09:57] Ben Rubin: Diego in the background.
[00:09:59] Tyler: What's up Diego? I totally agree. And why is it this discussed more though?
Why is it just a given. That. Oh, we're just going to do the 50, 50 base variable. I don't even think companies are having this discussion internally. Why did that discussion start internally at remote ish? What was that driven by? What was that trigger event that, Hey, we should talk about
[00:10:20] Ben Rubin: this. What's interesting.
I'm on a commission model right now. Okay. And when I was interviewed, we were trying to figure out even how my income and OTE and salary and commission structure would work. And I brought the approach of at least a draw structure. Yeah. So it's like, okay, you can use a draw commission where you still then pay someone what's expected further earnings, then you'd hang off of that.
Right. Where there's a balance of your income that then comes with that. Yep. So inside of all of this, you have Nicole. One of the smartest, most intelligent CEOs founders that I've worked for that is driving a new approach to the work place environment. We're trying to challenge status quo in a way that does make sense and does fit.
We're not just trying to be the spice that's out in the left field that nobody wants to taste. Yeah. We're trying to be the place that. Do want to work and they enjoy working here. It's not to mention. We also have a reduced work program, which is crazy to think about. So it's where you can get paid the same amount, but have reduced working hours.
That's sustainability. Even
[00:11:27] Tyler: for you in sales, that program applies to you and say,
[00:11:30] Ben Rubin: Absolutely everybody in the team, Nicole has a mission to get our entire team on a reduced work program. Cause then you get into two principles, the Pareto principle, if people aren't familiar with that one, the 80 20, and then the Parkinson's law, which is an activity is going to take you as long as the time that you have to fill it.
You'll use that time. If my time is reduced, you have to get creative on saying I've got this much activity to do, but this much time. That's the window we need to use, right?
[00:11:56] Tyler: Exactly. You bring up an interesting point there. We started this conversation talking about commissions and going to a less commission based pay structure for sales reps.
That's not the only thing that's important to sales reps. Everybody says that everybody's oh, I'm financially motivated. I'm driven by. Got to hit the quota, got to get over quota. I want to get promoted, yada, yada, yada, I think a lot of folks this day and age, especially younger generations balance, they want that balance.
They want that flexibility in their schedule. They want to have flexibility in where they work. They don't necessarily want to have to go and commute to an office every day. Those things are becoming attractive for companies to offer sales reps and starting to become almost table stakes, I think in some settings.
But what about everything else? Ben, when we think. Not just the commissions. How else can companies attract good talent with the way that they structure their sales
[00:12:45] Ben Rubin: roles? That's another great question. And I think there's so many dependencies upon it in terms of core things about the business. What are your values?
What do you value? As a person, what does the company value those two and finding alignment in those, the most amazing culture companies that have got the ping pong and the full table and the kegs, it may not be the right fit for everybody. So there's definitely a place where, you know, you've got to create alignment.
You've got to hold true to your vision as well. When you start doing that though, it seems like it attracts more. Nicole is doing a really good job when we're falling behind and it's this steadfast. Dedication to it. When you start putting things out there around this holistic perspective of what you're going to get as a benefit of working here as an employee, then you start thinking about the things that, what do you want, what would make you happy?
Is it money? Is it time off? Is it balanced? Is it flex time? So whatever your CEO, your leader, you're the people that are driving these companies forward. I think it's really to get down inside themselves. And instead of always thinking about it's the whole debate. Quantity versus quality and growing in the right way.
And then being real with what kind of earnings you've got to have tied to that association, maybe a loop around response to the question, but I really do think it depends. And I think it's all about being. With yourself and the people that you would want to work with and bringing together a culture. And then also the Steve jobs approach, hire people that are smarter than you.
Yeah. And let them also start making decisions and driving the company in ways. And then your culture is evolving and it's organic and it's. Instead of bringing in these people and saying, yeah, you've got this great opportunity for an OTE of three 50, probably not going to hit it. This culture is awesome.
I don't want to hear your ideas though. I just need you to sell, right? Exactly. Is that really
[00:14:33] Tyler: for everybody? But those kinds of situations, I think people get blinded. When I first came out of school, I had a few job opportunities coming out of college and I chose the one that had the biggest salary. I didn't choose the one that.
It would make me the happiest or that I thought I'd have good balance. I was just, oh, money. Cause you don't know you're stupid. You're 20. You don't know. And then I quickly realized, oh wow. Money's not the only thing that matters when it comes to your career. It is an important thing. But you know, there's studies that show once you get to this baseline, Happiness doesn't increase when you increase your salary.
I love that you're bringing up flex time and time off and flexible working situations. I think that is what people value and it has to be driven by the culture. And that's why I think when you go in to try to interview for a job like in sales job, you so much need to be interviewing that company just as much as they're interviewing you, because that's what you're getting yourself into.
And that culture is going to be way more impacted. On your life, then the commission structure. That's what's going to drive your happiness. Your unhappiness and your stress and your burnout. And then six months later, you're going to be back to floating your resume around looking for something different.
[00:15:41] Ben Rubin: Exactly. And that's the thing too, is as we're continuing to grow and we just hired another digital project strategist, I'm going to be looking for our. Additional salesperson. And as I'm starting to get involved in these things, I'm seeing now this continuous trend where everybody is like this way more hopping around of jobs.
I'm not that old, but I feel older than the people that are starting to get into the professional workspace. I'm six years, five years, eight years. That's my record. And then you have these people eight months, one and a half years, eight months, six months. And I think it's dead onto your. Be selfish. That was part of the inbound talk to it's just like be a little selfish when you're younger interview, the companies make sure they fit for you to your exact point.
Don't always look for the numbers. It doesn't equal happiness. 2001, I looked this up 2021 medium household income is $79,000. Yup. That's like in a household commissioned. Salary in a sales position, one 20, who wouldn't be happy with that. That's the only one person, two, what's your partner, your spouse. So if you
[00:16:45] Tyler: have the flexibility to live and work where you want to, because then you can choose a city with cost of living.
That's pretty reasonable. And you can choose to live in New York or San Francisco, but you don't have to, you could live in a van. Yeah,
[00:16:57] Ben Rubin: exactly. We just spent three weeks on the road, right. Working
[00:17:00] Tyler: out of a camp. Did you work while you were there while you were on the road?
[00:17:03] Ben Rubin: Every day, Monday through Friday, regular working weeks.
[00:17:06] Tyler: That flexibility. That is what drives our happiness. I think long-term one thing I'm not a huge proponent of is this unlimited vacation policy, because then I feel like nobody takes vacation. Totally. And to me that's frustrating because it sounds great. 150 OTE or 250 OT sounds great. Just like unlimited vacation.
I can take time off whenever you want. But if you know, the culture is well, you better have your button, the seat. If you want to be hitting that quota again, it goes back to. But those are just things that are said, but you have to dig in deep to understand how often do people actually take time off? How often do people actually hit quota?
These are the questions that you should be asking of companies. The answers are going to be illuminating as to whether or not it's the right culture for you as in a sales.
[00:17:50] Ben Rubin: Yeah, big time. That's a huge one. That's coming up. It's getting trendy is unlimited PTO. Yeah. And I think dead onto your point, I can take three months off.
No, you know what I mean? Well, you said unlimited PTO though. Yeah. But you can't, you still have responsibilities and you need to achieve those responsibilities here at remote ish. We don't have any PTO. It's all flex time. We don't take off holidays. We don't get off the bank holidays. Any of these things it's flex time.
You work when it fits for your life. Yep. And then. We have to get all of our HubSpot certifications, 37 of them, and continue with our time management. And then you get enrolled into a qualification period where then you can get into the reduced work. So now you're thinking about, okay, well, we don't have a necessarily PTO program, but what drives the behavior better than this?
I only need you to work 30 hours a week, though. Would you rather have unlimited PTO 10 days, two weeks, whatever of PTO, or would you rather work 30 hours a week?
[00:18:46] Tyler: Every week? I know what I would choose. And I think a lot of people would choose the 30 hours to, it seems like a no brainer. And not only that, but to go back to our original, all of this is to avoid burnout.
People are job hopping. People only stay in sales roles, a very short period of time, whether you're a rep or a sales leader, there's just so much people moving around. People choose the role for the wrong reasons. And I think you've got to figure out what are your reasons? Why are you in sales? It can be about money.
You can be in sales for money. That's okay. It's okay to be in sales for money. We all are in sales for money to a certain extent, but what else there has to be a, what else, what else is on your list? And if it's that cutthroat environment where you want to burn out and try to make Buku bucks, then go and be in that investment.
There's plenty of those out there that. But if it's a more balanced environment, somewhere that balances your mental health, your wellbeing, flexible working schedule, working situations. There's a lot of those opportunities out there too, but you have to do the interviewing and companies have to create those environments for sellers to come in.
[00:19:43] Ben Rubin: Exactly. That's what it's all about. Going back, repeating again, it's the point you made, make sure that you interview the company as well, because you just answered it as well. There's going to be the companies out there that are, you have a real opportunity to earn 3 50, 400 OTE. You got to work hard for it.
Yep. All of these things, but there's also the other places where that doesn't also resonate with a lot of people, find out what you need as an extrinsic and intrinsic, so that you're satisfied on both pieces. I need to go to the workplace. I need to feel good about the work that I'm doing that satisfies me, but I also want to find the external motivations that challenge me to grow, challenge me, to think differently that allow me the opportunity to go from a BD.
To an AA, to a senior AAE, to a VP director. However, that would be, find those challenges that up your game, each step, that doesn't always mean just selling more. It means becoming more intelligent thinking creatively thinking with adventure and curiosity.
[00:20:46] Tyler: I love that. I love adventure. All right. Awesome.
Well, we can keep this adventure going then. Great conversation. If my listeners want to find out more about you online, how can they be?
[00:20:54] Ben Rubin: Well, funny you say so adventure, you can find me on LinkedIn, adventurous thinking, Ben. Oh, nice. It's the in forward slash adventurous thinking, Ben. Okay. On LinkedIn. So that's part of my motto, man.
I love to think through an adventurous thinking path to create these connections, these humanized experiences,
[00:21:13] Tyler: man. I love it. Well link so that in the show notes. So if anybody wants to connect with Ben on. Highly recommend checking out his Friday, jams to Ben is quite the drummer and he does some Friday jams with some new music every week.
I love it. It's a nice pattern interrupt in my LinkedIn feed on Fridays. It's something I look forward to. It's become a ritual for me now. I really appreciate you doing that. Yeah. Follow
[00:21:33] Ben Rubin: that. Hashtag is hashtag Friday jam
[00:21:35] Tyler: hashtag Friday. Jams. Love it. All right, Ben. Thanks so much for coming on. Appreciate you.
Yeah, I really appreciate it. Tyler
[00:21:40] Ben Rubin: had a blast. Thank you. See ya. Bye.
[00:21:45] Tyler: Thank you so much for listening to today's show. You can find all the links discussed and the show firstname.lastname@example.org. That's the T H. Sales S a L E S lift L I F t.com. Have questions for me. Email email@example.com. We look forward to seeing you back here next week, and we hope today's show brings you the sales lift.
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Don’t feel like listening? Read the Episode Cliff Notes instead below:
The Role of Motivation (:28)
It’s interesting to think of commission as extrinsic motivation to get you to achieve an objective.
People are setting higher quotas so that the company grows, but then you still have this missing alignment between what people are hitting and where they’re getting to that point.
You have to find this intrinsic approach to motivate somebody, to get to a point where they’re earning an income that satisfies their needs.
So we’re looking at it from an approach, instead of trying to put a quote on you, that’s higher than what you can probably achieve.
Where the Companies Go Wrong (4:39)
This is all tons of research and time trying to identify what’s this good blend of setting a salary point in a quota and then how do you then continue driving on top of that quota.
There are a ton of variables involved in each of the companies. Then there’s the scalability of setting quotas higher in different spaces, industries, and services.
That’s where the tricky part lies because you can find tons of articles and research about there with commission people in the SAS space, but not necessarily service.
So, it comes down to figuring out a problem inside our space that everyone might not be going through the same kind. The best approach is a consultative, strategic selling process.
Quotas and commissions exist because that’s just how it’s always been, but it doesn’t necessarily mean it’s the best model or the most motivating model for sales reps.
Balancing Stress (8:28)
We naturally think if we push harder, we can make more, but that doesn’t always mean you hit quota. Sometimes, that means burning out and making less, which is a vicious cycle. It’s why mental health and sales it’s a hot topic.
Then there’s the part about your customer suffering because you’re stressed out now, and you’re coming to these calls with stress.
Ben is trying to challenge the status quo in a way that does make sense and does fit. They are trying to be the place where people want to work and enjoy working there.
They also have a reduced work program where you can get paid the same amount but have reduced working hours. It adds sustainability and reduces stress, which increases performance efficiency.
Attracting Quality Talent (12:39)
It’s crucial to hold to your vision. When you start doing that, though, it seems like it attracts more talent.
It’s all about being with yourself, the people you would want to work with, and bringing together a culture.
There’s also the Steve jobs approach of hiring people that are smarter than you.
Many people coming out of school have few job opportunities and choose the one that has the biggest salary. They don’t pay much attention to opportunities that will make them the happiest or give them a good balance. That comes later.
Culture will be way more impactful on life, the commission structure follows, and then flexibility. That’s what’s going to drive your happiness.
Ben is a successful ops, sales, and technology executive that has journeyed life through experiences. He brings a rich enthusiasm for leadership and a focus to put his passions and skills to use.
Ben strives to create new and lasting human connections through adventurous thinking. He also is committed to building solutions that provide humanized experiences that all humans crave.