The 4 Hidden Traps in Early B2B Sales Compensation Plans
How poorly structured commission caps, spiffs, and quota thresholds actively incentivize rep behavior that harms company gross margins and NRR.
Jake Reni
GTM Operating Partner & Executive Coach
Executive Takeaways
- Reps will always optimize for their comp plan, even if it contradicts company health.
- Capping commissions penalizes your highest performers and breeds mediocrity.
- Align incentives with Net Revenue Retention (NRR) and multi-year contract value.
Show me a company's sales compensation plan, and I will show you their customer churn rate six months from today.
Sales reps are rational economic actors. If you pay them on gross contract value without consideration for implementation feasibility or customer fit, they will close bad customers who churn in month three.
We design compensation models that create alignment between founder margin goals and rep earning potential—rewarding contract duration, retention milestones, and healthy payment terms.
Enjoyed this essay?
Every Monday I turn one real executive coaching moment or revenue bottleneck into a 5-minute read. Short enough to finish before your coffee cools.